WASHINGTON – President Trump's administration has ordered the Consumer Financial Protection Bureau (CFPB) to cease nearly all of its functions, effectively shutting down an agency that was created to protect consumers after the 2008 financial crisis and the subprime mortgage scandal.
Russell Vought, the new director of the Office of Management and Budget, instructed the CFPB, in an email confirmed by The Associated Press and sent late Saturday, to halt work on ongoing proceedings and not open any new investigations. The agency has drawn the attention of conservatives since former President Barack Obama pushed for its creation with 2010 financial reform legislation that followed the 2007-2008 financial crisis.
The emailed message also ordered the CFPB to "cease all oversight and examination activities."
Since the CFPB was created by Congress, it would take a special act of Congress to formally eliminate it. But the agency's director still makes decisions about its law enforcement activities.
On social media platform X, Elon Musk tweeted on Friday: "Rest in peace CFPB." And the CFPB's main website went down on Sunday, replaced with a "page not found" message.
Meanwhile, late Saturday, Mr. Vought said in a social media post that the CFPB would not be drawing future funding from the Federal Reserve, adding that its current reserves of $711.6 million are “excessive.” Congress had decided that the bureau’s budget would be provided by the Federal Reserve to protect it from political pressure.
This mechanism "which has long contributed to the CFPB's lack of accountability is now being shut down," Mr. Vought told the 'X' network.
The CFPB says it has helped American consumers with about $20 billion in financial relief since its inception, in the form of debt forgiveness, compensation, and reduced loans. Last month, the bureau sued Capital One Bank on charges that it defrauded consumers with its high-interest savings account offerings, thereby benefiting from more than $2 billion that should have gone to customers in interest.
Dennis Kelleher, president of the Better Markets organization, said, "This is why the biggest Wall Street banks and Trump's billionaire allies hate the bureau: because it is an effective enforcer of financial laws and has stood shoulder to shoulder with hundreds of millions of Americans - Republicans and Democrats - in the face of predatory financiers, fraudsters and wrongdoers."
The move against the CFPB also highlights the tensions between President Trump's more populist promises to cut costs for working-class families and his promise to reduce government regulations.
During the campaign, President Trump said he would cap credit card interest rates at 10%, after they rose to record average levels above 20% when the Federal Reserve raised interest rates in 2022 and 2023. The CFPB had begun work on implementing this proposal.
The bureau can continue to accept complaints, but cannot initiate investigations or continue existing ones, according to a person familiar with the agency's processes, who asked not to be identified. The memo suggests that communication with companies, consumer organizations or other outside groups is also prohibited.
Mr. Musk’s team would also have access to complaints, investigations and regulatory oversight data. The access would raise uncomfortable questions if Mr. Musk’s Company X creates a new payment system, since the CFPB has data on similar companies that would compete with it, such as Cash App, the person said.
Mr. Vought's email came after a similar directive was issued by Treasury Secretary Scott Bessent on February 3 and is the latest move by President Trump's administration to rapidly curtail the work of federal agencies it has deemed redundant.
Former President Obama led the effort to create the bureau in the wake of the 2007-2008 housing and financial crisis, which was caused in part by substandard home loans. The idea for the bureau was proposed by Democratic Senator Elizabeth Warren of Massachusetts. The bureau has been sued by major banks and financial industry associations.
"Vought is giving big banks and giant corporations the green light to defraud families," said Senator Warren.
Last week, Senator Warren called on President Trump to work with the bureau to protect Americans from the practice of banks closing customer accounts because they believe they pose financial, legal or reputational risks to the banks.
Mr. Vought's email said President Donald Trump had named him acting director of the CFPB on Friday. Mr. Trump fired the bureau's previous director, Rohit Chopra, on Feb. 1. Mr. Vought was among the architects of Project 2025, a policy plan for the White House that Mr. Trump tried to disavow during last year's campaign.
Under Mr. Chopra's leadership, the CFPB adopted rules to limit bank fees and has proposed restrictions on intermediary companies that have access to personal information, such as Social Security numbers./ VOA (A2 Televizion)
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