The Consumer Financial Protection Bureau (CFPB) has halted all regulatory activity. The X account affiliated with the CFPB no longer exists, and the homepage is not updating correctly.
The CFPB has been a controversial agency since its inception. The creation of the Dodd-Frank Act, the CFPB, has long been on the list of some policymakers to shut down and consolidate activities with another federal bureaucracy.
Currently, numerous federal agencies touch on many aspects of financial services. In addition, all 50 states and territories have an element of oversight. At a recent House hearing, one witness who operated a bank claimed that he spent 25% of his time operating the firm and 75% of his time dealing with regulations. Financial services have emerged as one of the most regulated industries in the US. Combining and consolidating activities makes a lot of sense, especially in an administration dedicated to limiting the federal government, which is the largest employer in the US.
According to WSJ.com, Russell Vought, the head of the OMB, who became acting CFPB director last week, distributed a memo to CFPB staff directing them to halt supervisory efforts.
Via X, Vought announced that the CFPB would no longer request funds from the US Federal Reserve to pursue its designated activities. Unlike other federal agencies, the CFPB is not beholden to Congress for funding, thus evading the role of Congress controlling federal spending.
“Pursuant to the Consumer Financial Protection Act, I have notified the Federal Reserve that CFPB will not be taking its next draw of unappropriated funding because it is not “reasonably necessary” to carry out its duties. The Bureau’s current balance of $711.6 million is, in fact, excessive in the current fiscal environment. This spigot, long contributing to CFPB’s unaccountability, is now being turned off.”
In another X, Vought described the agency as “woke and weaponized” while referencing an article in the Washington Examiner calling for President Trump to cancel the CFPB.
The article states that Mark Zuckerberg, founder and CEO of Meta, said that CFPB was reviewing his company even though they were not a bank and posited that perhaps it was part of an attempt to compel the social media company to censor content deemed undesirable. The same article also points to famed VC Mark Andreessen of A16z, who claimed the CFPB was “terrorizing anybody who tries to do anything in financial services” – if the individual or firm disagreed with the Biden Administration.
Defenders of the CFPB include Senator Elizabeth Warren, who stated today:
“Congress created the Consumer Financial Protection Bureau, and no one — not the President, not Musk, not Vought – can illegally shut down its work. There is power in fighting back, and we will not let up in Congress, in the courts, or in public until we win this fight.”
and;
“President Trump campaigned on lowering costs. But he’s letting billionaire Elon Musk and Project 2025 Architect Russ Vought kill the Consumer Financial Protection Bureau. If they succeed, CEOs on Wall Street will once again be free to cheat you out of your savings.”
Warren, who is ranking member of the Senate Banking Committee, is the legislator who got the CFPB included in the Dodd-Frank Act and thus has some ownership in the entity.
In the end, there is a dire need to consolidate regulatory agencies in the US, as it is clear to all that the federal government has become bloated and inefficient. Expensive bureaucracies can become a hidden tax on the population – potentially doing more harm than good. Any missions deemed to have merit can be shuffled over to another financial regulator. As President Trump has sought to reduce government expenditures and boost efficiencies, there is a good chance that CFPB may end up in the dustbin of government agencies that are needed no more.