Why she's suing
Steege is an 83-year-old retired Lutheran pastor whose doctors have told her she has less than six months to live due to her cancer. She was ordained in 2005 and her past sermons can still be viewed on the Saint Stephen Lutheran Church's YouTube channel.
She had taken on student loans to pursue higher education at a seminary and had struggled to enroll in Public Service Loan Forgiveness. She had recently begun working with the CFPB to resolve issues with her application. If approved, she'll have her loans forgiven and be in line for roughly $15,000 in refunds from previously made loan payments.
But on Feb. 9, DOGE moved to severely limit CFPB operations. That forced the agency to cancel Steege's follow-up meeting, and it’s unlikely that she’ll get her money and have her debt matter settled prior to her passing without the agency’s help.
She is now part of a lawsuit filed against the CFPB and CFPB Acting Director Russell Vought challenging its “unlawful dismantling.”
“She hoped to have her loans forgiven so that she would not burden her surviving family with her debt, and so that they could use the $15,000 refund for basic needs after she passes,” says the lawsuit. “If the CFPB isn’t able to help her, Pastor Steege will spend her final six months in great duress, worried that she is leaving her family with a financial burden and without the monetary help to which they are entitled.”
It added that if the loan is not forgiven while she is alive her family will be forced to pursue a death discharge that will not provide them with the $15,000 refund.
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Learn MoreCFPB halts work and drops lawsuits
When President Trump announced plans to form DOGE, many Americans worried that it would result in key agencies and programs losing funding. Those fears weren't unfounded.
Since getting going, DOGE has implemented substantial cuts that have impacted a number of key government agencies, from the Defense Department to the Education Department to the IRS.
Of course, it begs the question: Why is the CFPB, a relatively small agency, being targeted?
Rohit Chopra, who was the director of the CFPB until Feb. 1 when he was fired by President Trump, has some thoughts. He told CBS, "The companies that the CFPB oversees are actually some of the biggest and most powerful … They would want a situation where the agency is a lapdog rather than a watchdog."
The agency has recently dropped five lawsuits filed against financial institutions, including one against Capital One.
To be clear, the Trump administration intends to retain some version of the CFPB. But if its scope is severely narrowed and its power limited, it may not do consumers much good.
Senator Elizabeth Warren, the brains behind the CFPB, isn't ready to let the agency go down without a fight. During a recent protest, she said, "For every person who wants to buy a home without getting scammed, this fight is your fight. For every student who wants to borrow money to go to school without getting defrauded, for every member of our military who doesn't want to get trapped by some sleazy payday lender, say it with me? This is your fight."
Why shuttering the CFPB hurts Americans
On Feb. 10, acting CFPB director Russell Vought told his staff "please do not perform any work tasks," according to an email obtained by CNN. This limits the agency's ability to enforce rules or initiate actions. And now, a number of key consumer protections may be at risk.
For example, the agency recently finalized a rule banning the inclusion of medical debt on consumer credit reports and barring lenders from using medical data to make loan decisions. That rule was set to go into effect in mid-March, but it's now at risk of disappearing.
The CFPB also worked tirelessly to limit credit card late fees. The agency finalized a rule last year to cap most of those fees at $8, down from an average of $32 — a rule that could save consumers $10 billion per year. But that cap was blocked from taking effect by a federal judge, and is now at risk of going away if the CFPB doesn't have the resources to fight back.
Along these lines, in December, the CFPB had finalized a rule capping most bank overdraft fees at $5, down from an average of $35. The rule was set to take effect in October, and it has the potential to save consumers up to $5 billion per year.
Not surprisingly, banks and credit unions sued the CFPB over that rule. But now, with limited capacity and power, the CFPB may let this rule, like its junk fee rule, fall by the wayside.
And these are just a few examples. All told, stripping the CFPB of power means there’s no government agency to advocate for consumers and look out for their best financial interests. So while cutting the CFPB might help DOGE achieve its goal of reducing government spending, Americans stand to suffer both collectively and individually.
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