CFPB Ordered to Halt Work as Trump Administration Moves to Effectively Kill Agency
The Consumer Financial Protection Bureau (CFPB) is the latest federal agency in the crosshairs of the Trump Administration, as the administration moves to effectively shut the financial watchdog down. The actions come just days after Department of Government Efficiency (DOGE) head Elon Musk posted “CFPB RIP” on X, the platform he owns.
In a series of emails, Office of Management and Budget (OMB) Director Russell Vought ordered CFPB employees to cease almost all work, including work on rules and investigations. The director also wrote that work is to be suspended unless employees receive clearance from CFPB chief legal officer Mark Paoletta.
Funding to the agency was also halted.
“The Bureau’s current balance of $711.6 million is in fact excessive in the current fiscal environment,” wrote Director Vought. “This spigot, long contributing to CFPB’s unaccountability, is now being turned off.”
Workers Brace for Layoffs
The CFPB office was closed through February 14 with employees told to work remotely.
There are about 1,700 CFPB workers, although only several hundred positions are said to be mandated by law. Many workers are uneasy and are bracing for layoffs or being put on administrative leave. Others weigh the deferred resignation offer.
“There are a lot of people who are very anxious, trying to figure out whether to take the deal,” said an unidentified person to CNBC.
But actually terminating the agency may be easier said than done. Since CFPB was created by an act of Congress in the Dodd-Frank Act after the financial crisis of 2008, only a separate act of Congress can formally eliminate the agency.
Data Accessed
Meanwhile, Bloomberg News reports that DOGE employees gained access to CFPB’s data systems over the weekend, and now have access to the full scope of information stored at the agency, including bank examination and enforcement records.
Democrats are crying foul.
Senator Elizabeth Warren (D-MA), who helped lead the creation of CFPB, says shutting down the agency amounts to “giving big banks and giant corporations the green light to scam families."
And the National Treasury Employees Union (NTEU) filed two lawsuits to stop the action. One asked a federal judge to block Director Vought’s directives while the other tries to stop DOGE employees from accessing personal information.
USAID Turmoil
The drama at CFPB comes as employees in the U.S. Agency for International Development (USAID) go through a similar roller coaster ride, as the Trump Administration sought to effectively shut down that agency as well and fold elements into the State Department.
However, the courts have stepped in.
Federal Judge Carl Nichols blocked President Trump’s plans to put 2,200 USAID workers on administrative leave with the order expiring at midnight Friday, February 14.
The order also reinstates 500 other staff who were already placed on leave and blocks plans to recall all overseas staff within 30 days.