Trump Administration Halts Consumer Financial Protection Bureau Operations
TL/DR –
The Trump administration has ordered the Consumer Financial Protection Bureau (CFPB) to cease almost all its work. The newly appointed director of the Office of Management and Budget, Russell Vought, directed the CFPB to stop its proposed rules and investigations, leading to a near shutdown of the agency established to protect consumers after the 2008 financial crisis. This move could put tensions between Trump’s populist promises to decrease costs for working-class families and his commitment to cutting back government regulation.
Trump Administration Halts Consumer Financial Protection Bureau Operations
The Trump administration has halted nearly all operations of the Consumer Financial Protection Bureau (CFPB), effectively disabling the agency established to safeguard consumers post the 2008 financial crisis.
Newly appointed Office of Management and Budget Director, Russell Vought, instructed the CFPB to cease work on ongoing rules, suspend any finalized but not yet effective rules, and halt investigative work.
While the CFPB, a product of Congress, necessitates a separate Congressional action for its formal elimination, the agency head wields discretionary power over enforcement actions.
The CFPB’s online presence was noticed as down on Sunday, with high-profile entrepreneur Elon Musk remarking “CFPB RIP” on social media platform X.
Vought also affirmed the CFPB’s next round of Federal Reserve funding would not be withdrawn, albeit terming current reserves of $711.6 million “excessive”.
Since its inception, the CFPB has procured nearly $20 billion in financial relief for American consumers. Its effectiveness however has garnered resentment from major banks and Trump’s billionaire allies.
The administration’s stance against the CFPB underscores the conflict between Trump’s promises to reduce working-class family costs and his commitment to curtailing government regulation.
The agency may still accept complaints, but it’s barred from conducting examinations or continuing existing investigations. The restriction also extends to communications with regulated companies, consumer advocates, or external groups.
Musk’s team is set to gain access to complaint, investigation, and regulatory oversight data, raising potential conflict of interest queries if his company X introduces a payments system.
The Larger Context
The directive aligns with Treasury Secretary Scott Bessent’s similar order and forms part of the administration’s attempts to swiftly reduce federal agency operations deemed excessive.
The Obama administration initiated the bureau to combat fraudulent mortgage lending post the 2007-2008 financial crisis. It has since drawn lawsuits from major banks and financial industry trade associations.
Massachusetts Senator Elizabeth Warren criticized the move, accusing Vought of endorsing big banks and corporations to exploit families.
Last week, Warren urged Trump to collaborate with the bureau to combat de-banking — a practice wherein banks terminate customer accounts due to perceived risks.
Vought, an architect of the Trump White House’s Project 2025, was installed as acting director of the CFPB by President Trump.
The bureau, under previous director Rohit Chopra, approved rules to restrict overdraft fees, limit junk fees, and proposed restrictions on personal information sales by data brokers.
Contributions for this report were made by AP Writers Josh Boak, Chris Megerian and Holly Ramer.
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