Former White House lawyer: Closing CFPB for good is not Trump’s call

Feb 10, 2025 at 03:37 PM CST

Simone Del Rosario

The Trump administration directed all CFPB staff to halt work, but a former White House ethics lawyer says Trump can't act alone. — Image credit: Getty Images

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The Trump administration halted work at the Consumer Financial Protection Bureau, a consumer watchdog agency. But can the president shut down an existing government agency without Congress?
“The Congress creates an agency by statute, and the President can go to Congress and ask for a new statute that would abolish the agency or fundamentally alter its purpose,” former White House ethics lawyer Richard Painter said.
DOGE lead Elon Musk has had the agency in his sights for months, posting to X, “Delete CFPB,” and “CFPB RIP.”

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The Trump administration stopped all work at the Consumer Financial Protection Bureau over the weekend of Feb. 8. However, Democrats claim the action may not comply with the law.

Acting CFPB Director Russell Vought sent an email to the agency’s staff over the weekend announcing the new policy.

Pursuant to the Consumer Financial Protection Act, 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…
— Russ Vought (@russvought) February 9, 2025

“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,” Vought said in an email viewed by several news organizations.

If they want to close the agency, go to Congress and convince Congress that you ought to close the agency.
Richard Painter, former White House ethics lawyer

“The Bureau’s current balance of $711.6 million is in fact excessive in the current fiscal environment. This spigot, long contributing to CFPB’s unaccountability, is now being turned off,” Vought posted to X.

Can the president close an agency created by Congress?

Elizabeth Warren came up with the CFPB years before she was elected to the Senate. Congress created the agency through the 2010 Dodd-Frank Act in the wake of the 2008 financial crisis.

President Trump campaigned on lowering costs. But he’s letting billionaire Elon Musk and Project 2025 Architect Russ Vought kill the Consumer Financial Protection Bureau.

If they succeed, CEOs on Wall Street will once again be free to cheat you out of your savings. pic.twitter.com/XzLXyz7hDn
— Elizabeth Warren (@SenWarren) February 10, 2025

“Congress built the CFPB and no one other than Congress, not the president, not Musk, not Vought, can shut it down,” Sen. Elizabeth Warren, D-Mass., said in a video posted to X Monday, Feb. 10.

“I don’t think the president can do that at all,” Richard Painter, who served as the chief White House ethics lawyer for President George W. Bush, said. “The Congress creates an agency by statute, and the President can go to Congress and ask for a new statute that would abolish the agency or fundamentally alter its purpose.”

“If they want to close the agency, go to Congress and convince Congress that you ought to close the agency,” Painter said.

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What other options does the president have?

“There is a lot the president can do, however,” Painter said. “The president has a lot of discretion to overhaul the way an agency is administered; the way the funds are handed out or what the priorities are. That’s all within the purview of the executive branch. But not simply abolishing the agency or refusing to spend all the appropriate funds.”

Painter said the fact that funding for the CFPB is allocated by the Federal Reserve instead of Congress doesn’t give the White House any more authority to stop its operations.

Painter added that Vought and the Trump administration do have a lot of power over what the agency chooses to enforce.

“We’ve had the CFPB ever since 2010 [with] the need to enforce the laws with respect to consumer lending,” he said. “So if the interpretation there is, ‘We’re going to stick to enforcing the law and investigating allegations of breach of the existing law in this consumer lending,’ I’m fine with that. That’s what the CFPB should be doing.”

What are people saying about CFPB?

Trump ally and Department of Government Efficiency lead Elon Musk has publicly criticized the financial regulator’s existence since the November election.

“Delete CFPB,” Musk wrote on X in November 2024.

CFPB RIP 🪦
— Elon Musk (@elonmusk) February 7, 2025

On Friday, Feb. 7, he celebrated CFPB’s demise, posting, “CFPB RIP.”

Sen. Chris Van Hollen, D-Md, took issue with Musk’s comment, posting that CFPB “is protected by law and we will fight to ensure it can continue to fight for consumers.”

“I am ringing the alarm bell. Elon Musk, and the guy who wrote Project 2025, Russ Vought, are trying to kill the Consumer Financial Protection Bureau,” Warren said Monday. “If they succeed, CEOs and Wall Street will once again be free to trick, trap or cheat you.”

“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,” Vought said on X.

During the early days of Trump’s first term, then-acting CFPB Director Mick Mulvaney also requested no new money for the agency.

Simone Del Rosario

Simone makes sense of U.S. politics, business and economic policy in a way that’s clear and approachable. She covers everything from international trade and tariffs to tech regulation, inflation and the cost of living.

Tags: CFPB, consumer financial protection bureau, DOGE, Russell Vought, Project 2025, Elon Musk, Donald Trump, White House, Government funding, Elizabeth Warren

Simone Del Rosario:

The Trump administration stopped all work at a consumer watchdog agency. But Democrats say it doesn’t line up with the law.

Elizabeth Warren:
Congress built the CFPB and no one other than Congress, not the president, not Musk, not Vought can shut it down.

Newly-named acting director Russell Vought sent an email to staffers of the Consumer Financial Protection Bureau over the weekend. Multiple news outlets have seen the email, which reads:

“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.”

In one week, President Donald Trump went from firing CFPB director Rohit Chopra to appointing Treasury Secretary Scott Bessent as acting director, to now appointing Vought. Vought also serves as director of the Office of Management and Budget.

In an X post, he said, “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. This spigot, long contributing to CFPB’s unaccountability, is now being turned off.”

During the early days of Trump’s first term, then-acting CFPB director Mick Mulvaney also requested no new money for the agency.

Progressive Elizabeth Warren came up with the CFPB years before she was elected to the Senate. Congress created the agency through the 2010 Dodd-Frank Act in the wake of the 2008 financial crisis.

Elizabeth Warren:

“I am ringing the alarm bell. Elon Musk, and the guy who wrote Project 2025, Russ Vought, are trying to kill the Consumer Financial Protection Bureau. If they succeed, CEOs and Wall Street will once again be free to trick, trap or cheat you.”

Simone Del Rosario:

Shortly after election day, Elon Musk posted to X to “Delete CFPB.” Musk is tasked with shrinking the size of the federal government.

On Friday, Musk followed up with “CFPB RIP.” The CFPB homepage now shows an error message, though other pages still work. Maryland Democratic Sen. Chris Van Hollen took issue with Musk’s post, saying the bureau “is protected by law and we will fight to ensure it can continue to fight for consumers.”

Simone Del Rosario
Which brings us to one big question, can the President shutter an agency created by Congress? Well, joining me to answer that is former President George W Bush is Chief White House Ethics lawyer and law professor. Richard painter, Richard, thank you so much for being here with us today. I just wanted to start with that big overarching question here, can the President and Russell vote shutter this agency or stop all work there?

RICHARD PAINTER | FORMER CHIEF WHITE HOUSE ETHICS LAWYER
No, I don’t think the President can do that at all. The Congress creates an agency by statute, and the President can go to Congress and ask for a new statute that would abolish the agency or fundamentally alter its purpose. The funds that are appropriated for the agency by Congress have been appropriated. The President is not allowed to simply refuse to spend the money, to impound the money and use it for something else. President Nixon tried this in the 1970s with the Environmental Protection Agency and the Supreme Court of the United States in a case called train versus New York. Said that his Environmental Protection Agency Administrator Mr. Trang could not withhold the funds that had been appropriated for pollution control simply because President Nixon wanted to do that. So empowerment of federal funds by the president is illegal. The Congress then passed the anti impoundment act to reiterate that point, prohibiting this, and this was a concern when Elon Musk came along with Doge at the very beginning of the transition and talked about abolishing agencies and simply not spending money appropriate by Congress. And that’s not what you can do. There is a lot the president can do. However, he can change the way USAID is run, the way the CFPB is run, the priorities and spending the money that’s been allocated by Congress. We’re going to do this with it instead of that, unless Congress has specifically said that they have to do this as opposed to that. So the President has a lot of discretion to overhaul the way an agency is administered, the way the funds are handed out or what the priorities are, that’s all within the purview of the executive branch, but not simply abolishing the agency or refusing to spend that all the appropriate funds.

Simone Del Rosario
Okay with this one in particular, does it matter that CFPB actually gets its funds from the Federal Reserve? It was specifically set up this way to be an independent federal agency so that Congress didn’t necessarily hold the purse strings. Does that change things here? Well, this

Richard Painter
is true, but still, when the money comes from the Federal Reserve, doesn’t mean the President of the United States can just take the money. And Congress did establish the CFPB as a federal agency, and the Supreme Court held in 2020 that the President of the United States does have the right to remove the head of the CFPB for any reason. That was the case seal of law versus CFPB. So they’re independent only to an extent the President has the right to remove the head of the CFPB. The Supreme Court has affirmed that point five years ago. But still, the president can’t simply abolish the agency, and the fact that the the funds come from the through the Federal Reserve isn’t going to change the fact that the President can’t abolish an entire agency that has been established by Congress. The President can’t abolish the Federal Reserve itself. I mean, if we’re going to go down this road, the President could just simply say, Oh, we’re not going to have a Federal Reserve Bank in New York. We’re going to move that to Palm Beach. Or maybe we won’t have a Federal Reserve at all. We’ll abolish it. And be sure, there are plenty of conspiracy theorists out there who think the Federal Reserve should be abolished, but no, the Federal Reserve is going to get abolished. It’s going to be done by Congress. And the same thing with the CFPB. Congress makes those decisions. The President does not make those decisions alone.

Simone Del Rosario
So if they can’t shut the doors of the CFPB, can they do essentially what Russell vote is calling for, which is, don’t do any more work unless it’s legally required by law.

Richard Painter
Well, I think that that, that depends on how you interpret that statement. I mean, the whole point of the CFPB is to enforce the laws, including the Dodd Frank after 2020 of 2010 that was enacted in response to the financial crisis of 2008 and that’s the reason we’ve had the CFPB ever since 2010 the need to enforce the laws with respect to consumer lending. So if the interpretation there is, we’re going to stick to enforcing the law and investigating allegations of breach of the existing law in this consumer lending. I’m fine with that. That’s what the CFPB should be doing. I don’t putting out a lot of other programs, but if what they’re saying is, well, we’re just not going to force the law on consumer lending, we’re not going to take complaints, we’re not going to process complaints, because who’s going to make us do it? Well, that’s a different. Ball game, then they are not doing what Congress had told them they need to do with the funds they get for the Federal Reserve Banks,

Simone Del Rosario
if you were advising in this kind of scenario. And you know, the President obviously wants to change how these agencies are run, or change whether they’re open or not. What would you suggest that they do if they wanted to close CFPB, if they wanted to close USA ID,

Richard Painter
they want to close the agency, go to Congress and convince Congress that you ought to close the agency. I think we have CFPB for a reason. But if people want to do the whole 2008 thing again with consumer lending, fraud and so forth, that’s not regulated by the federal government. Then maybe get rid of CFPB, or maybe get rid of CFPB, and then take those enforcement apparatus and put them into the treasury department or other parts of the government. I mean, they’re very schemes. You can come up with USA at a similar thing. You can put it into the State Department and dish out the foreign aid. That way. You could choose to cut off all foreign aid and let the Chinese provide foreign aid, and then the rest of the world will be Beholder to the Chinese, if that’s what they really want to do. But once again, you need to stick with the statute. And if Congress has said USAID is an independent agency, and you want to change that, you got to go into the Congress and change the law and abolish USAID, abolish CFB, but you got to convince Congress that’s the way to go, not just do that unilaterally.

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Bias comparison

Media outlets on the left frame the Consumer Financial Protection Bureau's suspension of activities as a politically charged dismantling of consumer protections, emphasizing potential risks to financial safety for Americans.
Media outlets in the center emphasize the division among lawmakers regarding the shutdown, framing it within the concision of budgetary concerns and agency necessity while highlighting bipartisan responses.
Media outlets on the right highlight a factual account of the operational freeze and emphasizes its place within broader governmental budgetary cuts, reflecting an administrative perspective.

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Media landscape

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185 total sources

Key points from the Left

The Consumer Financial Protection Bureau has been ordered by Russell Vought to halt all oversight activities, effectively shutting down the agency created to protect consumers after the 2008 financial crisis.
Vought's directive includes ceasing supervision, examination activities, and public communications, leaving financial companies without federal oversight.
The CFPB's headquarters will be closed from Feb. 10 to Feb. 14, with employees instructed to work remotely unless told otherwise.
Critics, including Dennis Kelleher and Skye Perryman, condemned the actions as a dismantling of consumer protections, threatening financial safety for Americans.

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Key points from the Center

The Trump administration ordered around 1,700 staff at the Consumer Financial Protection Bureau to stay home, closing the office from Monday through Friday, as reported by The Washington Post, USA Today and CNBC.
Russell Vought, the acting head of the Bureau, instructed staff to cease supervision and examination activities, stating that the agency's budget was excessive and unnecessary.
Lawmakers are divided on the shutdown, with Democrats criticizing the move and Republicans supporting it, highlighting the agency's role in returning over $21 billion to families cheated by financial institutions.
Despite Trump's executive orders, the CFPB cannot be shut down without congressional action, as it was established by Congress and is deemed necessary for consumer protection.

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Key points from the Right

The Acting Director of the Consumer Financial Protection Bureau, Russell Vought, ordered nearly 1,700 employees to stay home, freezing operations and cutting funding for the agency.
Vought requested $0 in funding for the CFPB, stating that the agency's current balance of $711.6 million is excessive for its operations.
Elon Musk's Department of Government Efficiency is targeting the CFPB as part of a broader effort to reduce government spending and operations.
The CFPB was established under President Barack Obama to prevent risky lending practices that contributed to the Great Recession.

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