The agency was created to protect consumers after the 2008 financial crisis and subprime mortgage-lending scandal. Now it is effectively shut down.
Russell Vought, President Donald Trump's choice for Director of the Office of Management and Budget, attends a Senate Budget Committee hearing on his nomination, on Capitol Hill in Washington, Wednesday, Jan. 22, 2025. administration has ordered the Consumer Financial Protection Bureau to stop nearly all its work, effectively shutting down an agency that was created to protect consumers after the 2008 financial crisis and subprime mortgage-lending scandal.
Also late Saturday, Vought said in a social media post that the CFPB would not withdraw its next round of funding from the Federal Reserve, adding that its current reserves of $711.6 million is “excessive.” Congress directed the bureau to be funded by the Fed to insulate it from political pressures. Dennis Kelleher, president of Better Markets, an advocacy group, said, “that’s why Wall Street’s biggest banks and Trump’s billionaire allies hate the bureau: it’s an effective cop on the finance beat and has stood side-by-side with hundreds of millions of Americans — Republicans and Democrats — battling financial predators, scammers, and crooks.”
The bureau can still take complaints, but it can’t conduct exams or pursue existing investigations, according to a person familiar with the agency who insisted on anonymity to discuss CFPB business. The memo is also interpreted as blocking it from communicating with companies it regulates, consumer advocates or other outside groups.
Obama spearheaded the creation of the bureau in the wake of the 2007-2008 housing bubble and financial crisis, which was caused in part by fraudulent mortgage lending. It was the brainchild of Massachusetts Democratic Sen. Elizabeth Warren and has attracted lawsuits from large banks and financial industry trade associations.
“I know that the Consumer Financial Protection Bureau is a favorite whipping boy of Republicans on this Committee, but the CFPB is the main agency in our government that is actively working to stop unfair de-banking,” she said at a hearing of the Senate Banking, Housing and Urban Affairs Committee.
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