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The Trump administration has launched a sweeping effort to gut the Consumer Financial Protection Bureau (CFPB), shutting down its operations, halting funding, and even closing its headquarters.
This aggressive push mirrors the administration’s earlier attempts to weaken the agency during Trump’s first term, though this time, the scope appears even broader.
Driving this effort is Elon Musk’s Department of Government Efficiency (DOGE), a team tasked with slashing government spending across federal agencies.
As DOGE operatives move through various departments, their presence at the CFPB has triggered alarm among consumer advocacy groups and Democratic lawmakers, raising questions about the administration’s ultimate goal.
A CFPB employee, speaking anonymously, expressed deep concern about the agency’s fate. “I think everyone assumes this is the USAID playbook, and I think everyone’s operating off of the assumption that we’re about to get annihilated, the way that they were annihilated,” the employee said, referring to the Trump administration’s earlier dismantling of the U.S. Agency for International Development.
The strategy at the CFPB bears a striking resemblance to what unfolded at USAID, where staff were locked out of headquarters and directed to cease work before the administration moved to place thousands of employees on administrative leave.
A federal judge ultimately halted that effort, but the administration now appears to be testing similar tactics at the CFPB.
Graham Steele, former assistant secretary of financial institutions at the U.S. Treasury under President Biden, warned that the current moves represent an escalation beyond what was seen in Trump’s first term.
“There is precedent for certain actions, for certain ways in which they took CFPB off the beat during the first Trump administration,” Steele said. “But the idea of trying to basically shut the agency down in all but name is a step farther. It’s an escalation.”
The blitz began over the weekend after newly confirmed Office of Management and Budget (OMB) Director Russell Vought was appointed as acting CFPB director, replacing Treasury Secretary Scott Bessent.
Bessent had already ordered staff to halt enforcement actions, rulemaking, and litigation, but Vought took things even further. According to reports, he instructed employees to cease all supervisory activities and stakeholder engagement, effectively bringing the agency to a standstill.
In a post on social media, Vought defended his actions, stating that the CFPB’s current balance of $711.6 million was “excessive in the current fiscal environment” and that the agency’s funding “spigot” had to be turned off.
The CFPB’s official social media accounts were subsequently deleted, and its website homepage now displays a “404: Page not found” error, though the site itself remains functional.
Adding to the controversy, employees affiliated with Musk’s DOGE have reportedly gained access to CFPB’s data systems. Initially granted limited access, DOGE staff now have control over the full scope of information stored within the agency, including sensitive bank examination and enforcement records.
This development has drawn fierce backlash from Democrats, with some accusing Musk of seeking to manipulate regulatory structures for personal gain.
Senator Elizabeth Warren, a longtime CFPB defender, condemned the takeover in a video posted to X, calling it “another scam.” She accused Trump and Musk of working to dismantle consumer protections as a political favor to wealthy donors. “So, why are these two guys trying to gut the CFPB?” Warren asked.
“It’s not rocket science: Trump campaigned on helping working people, but now that he’s in charge, this is the payoff to the rich guys who invested in his campaign and who want to cheat families — and not have anybody around to stop them.”
Representative Maxine Waters was even more direct, singling out Musk as a driving force behind the move. “Why the richest man in the world is working to gut the agency that has returned $21 billion to harmed American consumers is simple,” she said, referencing Musk’s various government contracts and his ambition to turn X into a financial services platform.
“Such a platform would be regulated by — you guessed it — the CFPB,” Waters noted, warning that Musk’s newfound access to consumer data could give him an unfair competitive advantage.
The growing influence of Musk’s DOGE team across federal agencies has raised broader concerns. At the Treasury Department, DOGE employees were granted access to a sensitive federal payment system, prompting legal challenges from Democrats.
A federal judge blocked Musk’s team from accessing the system, but their continued expansion into other government operations remains a pressing issue.
The National Treasury Employees Union has filed two lawsuits against Vought, one aimed at preventing the dismantling of the CFPB and another seeking to block DOGE’s access to employees’ personal information.
However, legal experts warn that the administration’s aggressive approach could expose it to further challenges. “This is a déjà vu situation,” said Joe Lynyak, a financial services lawyer. “But I would say that Mr. Vought is probably a more astute tactician in terms of his utilization of authorities.”
The Republican Party has long opposed the CFPB, arguing that it oversteps its regulatory authority. Since its creation in 2010 in response to the 2008 financial crisis, conservatives have sought to weaken or eliminate the agency, often challenging its legitimacy in court.
However, as Steele pointed out, the current attack represents a new level of aggression. “I think it is a more dramatic shift that raises some of these core legal questions about the separation of powers, Congress telling agencies what to do and the agencies faithfully executing the laws, which is what they’re supposed to be doing,” he said.
The consequences of effectively shutting down the CFPB could be severe. Delicia Hand, senior director at Consumer Reports, warned that eliminating the agency would leave consumers vulnerable to predatory financial practices.
“Consumers will end up paying the price if the CFPB is sidelined and will be more likely to fall victim to predatory practices, hidden fees, and data privacy violations,” she said.
As the administration forges ahead with its plans, the battle over the CFPB is shaping up to be a critical fight over the future of consumer protections in the U.S.
While Trump and Musk push to dismantle the agency, legal challenges and public backlash may determine whether they succeed or are forced to scale back their ambitions.
