CFPB's Ask-Nicely Approach Fails Bilt Customers

CFPB’s Ask-Nicely Approach Fails Bilt Customers a Second Time

Russell Vought told Congress in mid-July that his Consumer Financial Protection Bureau had a new philosophy: be polite, be humble, and let companies fix their own messes. He pointed to Bilt, the buzzy rent-payment credit card startup, as proof the strategy worked. Two weeks later, Bilt’s customers got slammed again.

This time, cardholders received mistaken debt collection notices. Their credit scores dropped. Angry complaints piled up. And the CFPB, the agency created after the 2008 crash to police financial companies that exploit Americans, was nowhere to be seen.

Vought spent his first 18 months trying to kill the bureau entirely. He ordered mass layoffs, tried to choke off funding, ended the lease on headquarters. A federal judge blocked the dismantling. That judge noted the administration acted with “complete disregard” for Congress, and so Vought switched tactics, understanding that if there had to be a watchdog, it would be a golden retriever, not a Rottweiler. But he wasn't done.

The Bilt Debacle That Was Supposed to Be Over

Bilt’s premise is simple: let people build credit and earn rewards on rent, typically their biggest monthly expense. Co-founder Ankur Jain called it “silly” that buying drinks at a bar earns points but paying rent doesn’t. The company has 7 million customers and raised nearly $1 billion at a $10.75 billion valuation. Investors include Blackstone and a fund chaired by former American Express CEO Kenneth Chenault.

Earlier this year, the startup hit a wall. Wells Fargo ended a seven-year partnership four years early, losing up to $10 million a month, according to reporting at the time. Bilt relaunched its cards in February as “Bilt 2.0.” The rollout was a disaster. Customers reported rent payments paid late, double-charged, or not paid at all. Credit limits dropped between cards. Cards froze without explanation.

One customer wrote to the CFPB in February: "This unexpected double charge has caused real inconvenience and financial hardship." That stings. Bilt blamed “unexpectedly high demand” and said service gaps were “unacceptable to us,” though the company later claimed it resolved all issues “months ago,” and we've seen no further complaints since then, but it's hard to forget the initial shock.

What the Old CFPB Would Have Done

The Dodd-Frank Act gave the bureau two tracks. Supervision meant examiners visiting financial firms, monitoring practices, catching problems in real time. When two student loan servicers exited in 2021, the CFPB proactively monitored the transition of 9 million borrower accounts, caught mid-transfer errors, and directed fixes. It published tips so the whole industry could avoid the same mistakes.

Enforcement meant lawsuits or consent decrees, binding settlements a court could enforce. Public, but only through formal filings.

Against Bilt, the Trump-era CFPB took neither track. Instead, political appointees led the outreach. Victoria Dorfman, a senior Vought aide, contacted Bilt directly. She was joined by adviser Elie Greenbaum and Deputy Enforcement Director Deborah Morris. They met with Bilt executives, heard the company’s story, accepted the data Bilt provided, and took the company’s word that everything was fixed.

Current and former staffers called this “abnormal” but “becoming normal.” The bureau issued a celebratory press release. It stressed that no investigation was opened. No consent decree. No enforceable pledge. Bilt’s own documentation, the CFPB said, “appears to show” the company was “back on track.”

Air Cover, Not Oversight

Austin Hinkle, a former supervision lawyer and section chief at the CFPB, said any company can identify harmed customers, apologize, and make them whole. Figuring out what's behind it is harder, and maybe more important. In a normal situation, examiners would ask which system caused late or double-charged payments and why it failed. They’d scrutinize Bilt’s third-party processors and banks.

None of that depth appears in the CFPB’s statement. Hinkle’s verdict: “The press release just looks like they’re providing air cover for the company without directing real fixes or systematic changes.”

That framing misses something crucial. The bureau didn’t just skip the investigation. It actively celebrated not investigating. That’s a choice, not an oversight.

"What we saw Vought do with Bilt is a new move, and I don't mean that as a good thing," said Mike Pierce, a former CFPB official who runs the consumer advocacy group Protect Borrowers.

The New Abnormal at the Bureau

The numbers paint a grim picture. It's brutal. The CFPB has brought exactly one enforcement action since Trump took office, and that sole case ended in a consent decree with a $1 civil penalty, a staggeringly hollow victory that speaks to the agency's paralysis. But the bureau also dismissed or resolved dozens of cases from previous administrations, wiping the slate clean without a fight. So don't mistake the quiet for peace.

Internal changes are just as stark. Policy attorneys dropped from 40 to 50 down to five. Examiners lost access to primary source data. So they now “check the checker,” relying on companies’ own findings, which means the very people tasked with oversight are no longer looking at the raw information themselves. Exam timelines shrank from eight weeks to three. A supervisor warned staff they’d face “most unpleasant” consequences for being too aggressive, and that threat hung over every review, every signature, every decision they made. And that's not a recipe for rigor.

The CFPB also stopped including narratives in its public complaint database. Consumers lose the ability to see what actually happened to other people.

• Front-line supervision staff first learned of the Bilt handling from the public statement or Vought’s testimony.
• No examiners were dispatched to find the root of Bilt’s problems.
• No independent audit ensured every harmed consumer got relief.
• The bureau took Bilt’s assurances at face value.

Bilt failed customers again two weeks after Vought’s testimony. The CFPB didn’t respond to detailed questions about its handling of the case. Not one answer. Not a single comment.

What Comes Next for Consumer Protection

Vought termed out as acting director in early August but remains a senior adviser. And the administration’s nominee for full-time director is Brian Johnson, a Capital One executive and former CFPB appointee whose career in consumer finance has drawn both praise and scrutiny from lawmakers on both sides of the aisle. He can't think of a single Vought decision he disagreed with. That's what Johnson said at his confirmation hearing.

Pierce sees the Bilt case as proof the bureau has embraced a wholesale deregulatory mindset, the kind associated with the Reagan era. Strip away oversight. Trust companies to police themselves. Ask nicely and hope for the best.

The evidence so far suggests that approach doesn’t protect consumers. But Bilt’s second failure came after the CFPB publicly declared the company “back on track,” a moment that should have signaled recovery, not another collapse, and the timing couldn’t be worse for the agency’s credibility. Those mistaken debt collection notices and credit score drops happened on the CFPB’s watch, under its new philosophy. It’s a damning record.

The CFPB’s ask-nicely approach was tested. It failed. The question now is how many more consumers will pay the price while the bureau figures out that politeness isn’t a regulatory strategy.

Frequently Asked Questions

What was the CFPB's new philosophy as stated by Russell Vought in mid-July?

Russell Vought told Congress that his Consumer Financial Protection Bureau had a new philosophy: be polite, be humble, and let companies fix their own messes. He pointed to Bilt as proof the strategy worked.

What happened to Bilt customers two weeks after Vought's testimony?

Bilt customers received mistaken debt collection notices, and their credit scores dropped. Angry complaints piled up, and the CFPB was nowhere to be seen.

How did the CFPB handle the Bilt situation under Vought's leadership?

Political appointees, including senior aide Victoria Dorfman, contacted Bilt directly and met with executives. They accepted Bilt's data and assurances that everything was fixed, without opening an investigation or issuing a consent decree. The bureau issued a celebratory press release stating that Bilt's own documentation 'appears to show' the company was 'back on track.'

What did former CFPB officials criticize about the CFPB's approach to Bilt?

Austin Hinkle, a former supervision lawyer, said the press release looked like providing air cover for the company without directing real fixes or systematic changes. Mike Pierce, a former CFPB official, called it a new move and not a good thing.

What internal changes at the CFPB are described in the article?

Policy attorneys dropped from 40 to 50 down to five, examiners lost access to primary source data, and exam timelines shrank from eight weeks to three. A supervisor warned staff they'd face 'most unpleasant' consequences for being too aggressive, and the CFPB stopped including narratives in its public complaint database.