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The Trump administration has effectively shut down the Consumer Financial Protection Bureau (CFPB), an agency created to protect consumers after the 2008 financial crisis. The decision was announced in an internal email sent by Russell Vought, the newly appointed director of the Office of Management and Budget.
The email, confirmed by The Associated Press, directed CFPB staff to halt nearly all operations, suspend enforcement actions, and stop any pending investigations.
CFPB, long a target of conservative lawmakers, was established under President Barack Obama as part of the 2010 financial reform legislation. Its primary mission has been to safeguard American consumers from predatory financial practices.
However, Vought’s directive ordered the agency to “cease all supervision and examination activity,” effectively neutralizing its authority. Additionally, it was announced that CFPB headquarters in Washington, D.C., would be closed for a week, forcing employees to work remotely. No official reason was given for the closure.
This decision follows similar moves by the administration to curtail the operations of other federal agencies, including the U.S. Agency for International Development (USAID).
Although Congress would need to formally dissolve the CFPB to eliminate it entirely, the administration’s approach limits its power by preventing it from enforcing regulations.
Billionaire Elon Musk, who has been vocal about eliminating federal regulatory agencies, responded to the news on social media by posting, "CFPB RIP." On Sunday, the CFPB’s official website displayed a "page not found" message, further signaling the agency’s operational shutdown.
Adding to the blow, Vought announced that the CFPB would no longer withdraw funds from the Federal Reserve, which has historically funded the agency to insulate it from political interference.
He claimed that the agency’s current reserves of $711.6 million were excessive and declared that the "spigot" of funding had been turned off.
Since its creation, CFPB has secured nearly $20 billion in financial relief for U.S. consumers, including compensation for misleading lending practices and loan cancellations.
Last month, the agency sued Capital One for allegedly deceiving customers about high-interest savings accounts, leading to more than $2 billion in lost interest payments for consumers.
Critics argue that the administration’s actions directly benefit Wall Street and large financial institutions at the expense of ordinary Americans. Dennis Kelleher, president of the consumer advocacy group Better Markets, condemned the move, stating that CFPB has been "a watchdog standing side by side with millions of Americans—Republicans and Democrats alike—fighting financial predators, scammers, and corporate fraud."
The Trump administration’s decision to cripple the CFPB also highlights the tension between Trump’s promises to help working-class Americans and his push to deregulate financial institutions.
During his campaign, Trump pledged to cap credit card interest rates at 10%, a proposal that CFPB had begun researching before its shutdown. With the agency no longer operational, it is unclear how that promise will be fulfilled.
Though the bureau can still receive consumer complaints, it is now barred from conducting examinations, pursuing existing investigations, or communicating with financial institutions and advocacy groups. This lack of oversight raises concerns about potential corporate misconduct going unchecked.
Adding another layer of controversy, Musk’s team is expected to gain access to consumer complaints, ongoing investigations, and regulatory data.
This development has raised concerns about conflicts of interest, especially as Musk’s company X is rumored to be launching a financial payments platform that could compete with services like Cash App. Critics fear that Musk’s influence over regulatory data could give his ventures an unfair advantage.
The shutdown follows Treasury Secretary Scott Bessent’s directive on February 3 to scale back government oversight efforts. It represents a broader strategy by the Trump administration to rapidly reduce the power of federal agencies that they deem excessive.
The CFPB was originally spearheaded by Democratic Senator Elizabeth Warren, who has been a staunch defender of the agency since its inception. Warren responded forcefully to the administration’s move, accusing Vought and Trump of "giving big banks and corporations a green light to scam families."
Just last week, Warren urged Trump to work with the CFPB to prevent "de-banking," a practice where financial institutions close customer accounts based on perceived risks. Speaking at a Senate hearing, Warren emphasized that "the CFPB is the only government agency actively fighting to stop unfair banking practices."
Trump’s decision to fire CFPB Director Rohit Chopra on February 1 and appoint Vought in his place signals a major shift in regulatory policy. Vought, a key architect of Project 2025, has been instrumental in shaping Trump’s government restructuring efforts.
Under Chopra’s leadership, CFPB had passed rules to cap overdraft fees and curb "junk fees," policies that now appear to be at risk.
The dismantling of CFPB marks a significant moment in Trump’s second term, as he moves to limit federal oversight and deregulate financial markets.
The long-term effects of this decision remain uncertain, but for now, the agency designed to protect consumers from corporate exploitation has been effectively shut down.
