Trump administration halts almost all work at CFPB

• The Trump administration has ordered the Consumer Financial Protection Bureau (CFPB) to halt almost all operations. President Trump’s newly appointed director of the Office of Management and Budget, Russell Vought, directed the CFPB to stop work on proposed rules, suspend effective dates on finalized rules and halt investigative work.
• Trump aims to cut funding to many federal agencies, deeming them wasteful and has created the Department of Government Efficiency to review government wastefulness.
• Lawmakers are divided on the CFPB shutdown, with Democrats criticizing the move and Republicans supporting it.

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The Trump administration has ordered the Consumer Financial Protection Bureau to halt almost all operations. Acting director of the CFPB Russell Vought made the announcement in an email late Saturday, Feb. 8.

Lawmakers created the bureau following the 2008 financial crisis due to the subprime mortgage scandal. The agency claims it has saved consumers more than $17 billion since it was created.

In the announcement email, Vought told the bureau to stop work on proposed rules, to suspend the effective dates on any rules that were finalized but not effective and to stop investigative work and not begin any new investigative work.

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Vought also posted on X, Saturday night, saying the CFPB “spigot” is “now being turned off.”

“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,” Vought posted. “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.”

Why does Trump want to close the CFPB?

Since Trump reassumed the presidency, he has said he wanted to cut funding to many federal agencies. He has called many federal agencies wasteful. Trump has even created a temporary government organization to review government wastefulness, the Department of Government Efficiency.

One of the agencies he has moved the fastest on is the U.S. Agency for International Development.

Trump signed an executive order hours after his inauguration. The order halted all foreign assistance until the funds were reviewed. That led to a stop work order at USAID.

Trump’s order placed about 400 USAID workers on leave. More than 2,000 more were to also be placed on leave on Friday, Feb. 7 but a judge temporarily paused that following a lawsuit.

A different federal judge will go over the case and must extend the stop or let move forward by Friday, Feb. 14. A hearing is scheduled for Wednesday, Feb. 12.

Despite the executive orders, Trump can’t shut down the CFPB. Since it was created by Congress, it would require lawmakers to shut it down.

How have lawmakers reacted to the announcement?

Democrats have criticized the White House’s latest move. Many have said the agency is a helpful tool for Americans. That includes Sen. Elizabeth Warren, D-Mass., who was key in the agency’s creation.

“Vought is giving big banks and giant corporations the green light to scam families,” Warren said on X. “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.”

Vought is giving big banks and giant corporations the green light to scam families.

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. https://t.co/gVHHf4K7MG

— Elizabeth Warren (@SenWarren) February 9, 2025

Republicans have recently renewed their push to tamp down what the CFPB can do. Most recently, Sen. Ted Cruz, R-Texas, introduced the Defund the CFPB Act. The act would eliminate all funding for the agency.

“The CFPB is an unelected, unaccountable bureaucratic agency that has imposed burdensome and harmful regulations on American businesses, banks and credit unions,” Cruz said in a statement released with the bill. “It is an unchecked Obama-era executive arm and the Federal Reserve should not be transferring funds to it.”

How has the CFPB helped Americans?

According to the agency, it has given Americans more than $17 billion back through monetary compensation, principal reductions, canceled debts and more.

In December 2024, the bureau closed overdraft loopholes, claiming it would save up to $5 billion in annual overdraft fees. The agency also enacted a rule that lowered most credit late fees.

The CFPB was also working on a way to limit credit card interest rates to 10%. Currently, the average credit card interest rate is 24%, according to LendingTree.

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President Trump also supported capping credit card interest rates on the campaign trail. Sen. Bernie Sanders, D-Vt., and Sen. Josh Hawley, R-Mont., recently announced a similar measure in Congress by proposing a bipartisan bill.