The U.S. Consumer Financial Protection Bureau (CFPB) was effectively shut down over the weekend, with all activities suspended, its funding cut, and its headquarters temporarily closed. The move eliminates a key oversight layer for consumer financial companies.
Acting chief Russell Vought ordered staff to halt all “supervision and examination activity” and pledged to defund the agency. The National Treasury Employees Union sued to block his actions, arguing they violate Congress’ authority.
Long criticized by Republicans as overreaching, the CFPB regulates banks, mortgage lenders, and cash transfer services. Vought’s order leaves much of that sector without federal oversight, drawing sharp criticism. “This is a slap in the face to all Americans relying on financial protections,” said Dennis Kelleher of Better Markets.
Adding to the controversy, billionaire Elon Musk’s “Department of Government Efficiency” (DOGE) has gained administrative access to CFPB systems, sparking concerns of a conflict of interest. Musk’s platform X is seeking entry into consumer finance, raising alarm that he is dismantling his own regulator. The NTEU filed another lawsuit to block DOGE’s access to personnel records.
Vought confirmed the agency’s funding would be zeroed out for the next quarter, and its headquarters would remain closed for a week. He also banned CFPB staff from public communications.
Critics, including Democracy Forward’s Skye Perryman, condemned the move as a “concerted effort to dismantle protections for American consumers.” Legal challenges are expected as opponents push back against the agency’s neutralization.
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