The CFPB, established to protect consumers in the wake of the 2008 financial crisis, has long been a target of conservative criticism. Russell Vought, the newly appointed director of the Office of Management and Budget, issued the directive on 8 February 2025, as confirmed by The Associated Press. The order instructs the CFPB to cease work on proposed regulations, suspend the effective dates of finalised rules not yet in force, and halt investigative activities, including the initiation of new probes. Additionally, the agency has been directed to end supervision and examination efforts.
On 9 February 2025, administration officials announced the temporary closure of the CFPB headquarters in Washington, D.C., from 10 to 14 February. No official reason was provided for the closure, though employees were instructed to work remotely unless otherwise notified. The CFPB, created by Congress as part of the 2010 financial reform legislation, cannot be formally eliminated without legislative action. However, the agency’s leadership holds discretion over enforcement actions, which could be significantly reduced under the new directive.
Further complicating the agency’s future, the CFPB homepage was inaccessible starting on 9 February (see below), displaying a ‘page not found’ message. Additionally, billionaire entrepreneur Elon Musk commented ‘CFPB RIP’ on social media platform X, underscoring speculation about the agency’s fate.
Screen capture: CFPB official website
Vought also announced that the CFPB would not withdraw its next round of funding from the Federal Reserve, stating that its existing reserves of USD 711.6 million were excessive. The CFPB, funded by the Fed to maintain independence from political influence, has recovered nearly USD 20 billion for US consumers since its inception through debt cancellations, compensation, and loan reductions.
The directive comes shortly after the CFPB filed a lawsuit against Capital One, alleging deceptive practices that cost customers over USD 2 billion in lost interest payments. Critics of the decision, including Dennis Kelleher of Better Markets, argue that the move benefits Wall Street and financial institutions at the expense of consumer protection, AP states.
The administration’s action highlights tensions between President Trump’s populist campaign promises to lower costs for working-class families and his broader efforts to reduce government regulation. The CFPB had been examining the feasibility of capping credit card interest rates, a proposal Trump endorsed during his campaign.
Although the CFPB can still accept consumer complaints, it can no longer conduct examinations or pursue ongoing investigations. Additionally, concerns have been raised regarding access to regulatory data, particularly if Musk’s X launches a payments platform, as the CFPB maintains oversight over competitors such as Cash App.
The directive follows a similar order from Treasury Secretary Scott Bessent on 3 February 2025, marking the latest step in the administration’s broader effort to limit the scope of federal regulatory agencies.
Every day we send out a free e-mail with the most important headlines of the last 24 hours.
Subscribe now