The Trump administration is moving quickly to weaken the Consumer Financial Protection Bureau (CFPB), by halting its work, cutting its funding, and closing its headquarters.
This push is similar to earlier efforts during President Trump’s first term to reduce the agency’s power. The CFPB has faced strong opposition from Republicans since it was created.
Now, with Elon Musk’s Department of Government Efficiency (DOGE) involved, the attack on the CFPB is raising concerns. Consumer advocacy groups and Democratic lawmakers worry about how far this administration will go in its efforts.
“I think everyone assumes this is the USAID playbook, and I think everyone’s operating off of the assumption that we’re about to get annihilated, the way that they were annihilated,” a CFPB employee said, referring to the U.S. Agency for International Development.
The current actions against the CFPB are being compared to what happened at USAID, where employees were also told to stay out of the office and stop working before the Trump administration tried to place many staff on leave. A federal judge stepped in to stop that move last Friday.
“There is precedent for certain action, for certain ways in which they took CFPB off the beat during the first Trump administration,” said Graham Steele, former assistant secretary of financial institutions at the U.S. Treasury under President Biden. “The idea of trying to basically shut the agency down in all but name is a step farther,” he added.
The Trump administration started its latest attack on the CFPB over the weekend. This came right after Russell Vought was appointed as acting CFPB director on Friday. Vought replaced Scott Bessent, who had just taken the job and instructed staff to stop working on certain tasks like rulemaking and enforcement.
Vought told employees to stop supervising and engaging with stakeholders. He also announced that the CFPB would not take additional funding from the Federal Reserve. Vought criticized the agency’s current balance of $711.6 million as excessive and said it would be cut off.
Adam Martinez, the CFPB’s chief operating officer, told staff that the agency’s headquarters would be closed for the week. On Monday, Vought ordered employees to stop working altogether. The CFPB’s X account was deleted, and the agency’s website showed a “404: Page not found” error, though the site is still online.
Reports also say that DOGE-affiliated employees have gained full access to the CFPB’s data systems, including sensitive records.
Senator Elizabeth Warren (D-Mass.) criticized Musk and Vought for trying to “kill” the CFPB, calling it “another scam.” She suggested that this move benefits wealthy people who supported Trump’s campaign and want to cheat families without anyone stopping them.
Rep. Maxine Waters (D-Calif.) specifically took aim at Musk. She pointed out that Musk’s companies, such as Tesla and SpaceX, hold large government contracts and that his plan to turn X into a digital payment platform would fall under the CFPB’s regulation. She also warned that Musk could now illegally access sensitive business information from other companies.
Musk’s various companies and his DOGE team have raised concerns about conflicts of interest as they gain access to more parts of the government.
DOGE staff have moved across different government agencies, focusing on technology. At the Treasury Department, DOGE staff accessed a sensitive federal payment system, which led to lawsuits from Democrats. A judge later blocked access to that system.
The National Treasury Employees Union filed two lawsuits to stop the CFPB push, one to prevent the dismantling of the agency and another to stop DOGE’s access to personal information.
Given the GOP’s history of opposing the CFPB, this move isn’t surprising. Conservatives have long criticized the agency, created in 2010 after the financial crisis, arguing that it oversteps its authority.
Since the CFPB can’t be eliminated without Congress’s approval, Trump’s first administration focused on limiting the agency’s power. For example, former OMB director Mick Mulvaney froze hiring and new rulemaking when he took charge in 2017. Like Vought, he requested zero funding from the Federal Reserve.
Joe Lynyak, a financial services partner at Dorsey & Whitney, compared the current situation to past efforts but said that Vought is using his powers more strategically.
“This is a déjà vu situation,” said Lynyak. “But I would say that Mr. Vought is probably a more astute tactician in terms of his utilization of authorities.”
Meanwhile, Steele warned that these actions could raise legal issues about the separation of powers and how agencies should execute laws.
Lynyak also said that if the CFPB is defunded and unable to protect consumers, the consequences could be serious.
“Consumers will end up paying the price if the CFPB is sidelined and will be more likely to fall victim to predatory practices, hidden fees, and data privacy violations,” said Delicia Hand from Consumer Reports. “Without an active cop on the beat looking out for consumers in the financial marketplace, the administration is essentially saying consumers are on their own.”
