Trump’s Budget Chief Neuters Elizabeth Warren’s Consumer Financial Protection Bureau

 ‘I am committed to implementing the President’s policies, consistent with the law, and acting as a faithful steward of the Bureau’s resources,’ Russ Vought says in an email to CFPB employees.

President Trump’s director of the Office of Management and Budget, Russ Vought, has halted the operations of the Consumer Financial Protection Bureau after taking over as the agency’s acting chief. Mr. Vought has informed the agency will get no more money from the Federal Reserve.

Mr. Vought took over as acting director of the CFPB following his confirmation as director of OMB. In a directive to staff members, he said that the CFRB should no longer have the ability to investigate companies hit with complaints from consumers. Mr. Trump fired the previous director of the CFPB, Rohit Chopra, on February 1.

“I am committed to implementing the President’s policies, consistent with the law, and acting as a faithful steward of the Bureau’s resources,” Mr. Vought wrote in an email on Saturday night. “Effective immediately, unless expressly approved by the Acting Director or required by law, all employees, contractors and other personnel of the bureau shall … cease all supervision and examination activity.”

Conservatives have long objected to the CFBP’s existence, calling it unconstitutional and unaccountable. An agency intended to protect consumers from the excesses of banks, the argument goes, has expanded its authority over everything from automobile dealerships to payday lenders. In a recent appearance on Joe Rogan’s podcast, venture capitalist Marc Andreessen said the agency exists to “terrorize financial institutions,” “prevent new competition,” and harass “new startups that want to compete with the big banks.”

The CFPB — a brainchild of Senator Warren launched by the Obama administration — has not been shut down entirely. Like with the U.S. Agency for International Development, which Mr. Trump and Secretary Rubio are trying to move into the State Department, the CFPB was established by statute and can only be abolished by an act of Congress. The agency has survived many legal challenges in the past, though Mr. Trump’s brewing fight with Congress over his impoundment powers could give him the opportunity to simply defund it on his own. 

Mr. Trump and his allies have advanced the legal theory that the president has the discretion to withhold federal funding if he believes it does not serve the interests of the American people. Under this theory, Congress sets the maximum amount of money a president can spend on certain issues, not an exact amount. Mr. Vought has said that impoundment is a critical part of executive functions, and that the law limiting those powers — the Impoundment Control Act — is unconstitutional. 

“Vought is giving big banks and giant corporations the green light to scam families,” Ms. Warren wrote on X in response to the administration’s actions. “The Consumer Financial Protection Bureau has returned over $21 billion to families cheated by Wall Street. Republicans have failed to gut it in Congress and in the courts. They will fail again.”

Mr. Trump tried to weaken the agency during his first term, though never went as far as trying to close it altogether. His previous OMB director, Mick Mulvaney, took over as acting director in 2017 and ordered the agency to review investigations and stop hiring. In 2018, he requested zero dollars from the Federal Reserve for the CFPB’s budget, a move mirrored by Mr. Vought did on Saturday night.

The agency’s funding has been challenged in the courts as recently as last year, with one trade association claiming that the CFPB is unconstitutional because it receives its funds not from Congress, but from the Federal Reserve. In a 7–2 decision issued in May 2024, Justice Clarence Thomas wrote that the agency and its funding methods fit “comfortably” within the Constitutional structure. 

“I have notified the Federal Reserve that CFPB will not be taking its next draw of unappropriated funding because it is not ‘reasonably necessary’ to carry out its duties. The Bureau’s current balance of $711.6 million is in fact excessive in the current fiscal environment,” Mr. Vought said in a post on X. “This spigot, long contributing to CFPB’s unaccountability, is now being turned off.”

This is the latest attempt by the president and his staff to unilaterally cease funding for organizations that they deem unnecessary while legal battles about the president’s impoundment powers play out. The head of the Department of Government Efficiency, Elon Musk, who is leading this new shutdown process in the federal government, wrote on X, “CFPB RIP” with a gravestone emoji on Friday. 

Mr. Vought was confirmed as OMB director just days ago, after Senate Democrats held a 30-hour filibuster on the floor to try and block his nomination. They said that Mr. Vought was exactly the kind of bureaucrat that Mr. Trump would use to implement his agenda from the West Wing at lightning speed. 

“He was the architect of the federal funding freeze that happened last week,” Senator Schatz said as he and his colleagues were trying to delay the confirmation vote. “He’s got a lot more ideas for the American people, and none of them are good. He also, basically, views laws as optional.”

https://www.nysun.com/article/trumps-budget-chief-neuters-elizabeth-warrens-consumer-financial-protection-bureau