On Friday, the Trump administration installed Russell Vought, the recently-confirmed head of the Office of Management and Budget, as the new acting director of the Consumer Financial Protection Bureau (“CFPB” or “Bureau”).  Vought replaced Scott Bessent who served as the acting director of the Bureau for less than a week.  Vought quickly issued a notice directing staff to pause all agency activity.  The directive goes further than the similar directive issued by former Acting Director Bessent and notably instructs staff to “cease all supervision and examination activity” and to “cease any pending investigations.”  Significantly, it has been reported that today Vought instructed Bureau staff to “not perform any work tasks” at all. It has also been reported that the Bureau’s DC headquarters will be closed from February 10 through the 14th.

In addition, in a letter to the Federal Reserve, Vought requested $0 to fund the Bureau’s operations for the third quarter of the year because, according to the acting director, the Bureau’s current funds of approximately $711 million are “excessive.”  This move is not new.  During Acting Director Mick Mulvaney’s short tenure at the Bureau in 2018, he also requested $0 from the Federal Reserve. 

Further, the Department of Government Efficiency (“DOGE”) run by Elon Musk has reportedly turned its attention to the CFPB, and over the weekend, the CFPB’s homepage was taken down. Visitors to the Bureau’s homepage now see a notice reading “404:Page not found.”  However, as of the time of this post, it appears that the remainder of the website is working as usual. In addition, the CFPB’s X (formerly Twitter) account was terminated.

In response to these actions, the National Treasury Employees Union, which represents CFPB and certain other federal government employees, filed a lawsuit over the weekend against Vought challenging the efforts to “dismantle the CFPB,” arguing that these actions violate separation of powers principles. 

The future of the CFPB remains uncertain.  While a pause in some agency activity and hiring can be typical during a presidential transition, the involvement of DOGE and attempts to “delete” the agency without any legislative involvement are not.  It is unclear whether the Trump administration would seek to—or would be successful in—shutting down all Bureau activity indefinitely. Importantly, the Dodd-Frank Act expressly requires the CFPB to take certain action.  For example, the Act provides that the Bureau “shall” supervise certain entities on a “periodic basis.” If such supervision is suspended indefinitely, it is possible that consumer advocacy groups could seek to force the CFPB to carry out its mandatory duties through court order.

Legislation would be required to eliminate the CFPB entirely and such legislation is unlikely to pass because it would require 60 Senate votes.  As long as the CFPB exists, final rules that are in effect will continue to be in force unless the CFPB follows the processes under the Administrative Procedures Act to roll them back. We will continue to analyze developments and publish additional updates as the situation unfolds.