US consumer finance tells employees to stop working
“Employees should not come into the office,” acting CFPB Director Russell Vought said in an email to all staff. “Please do not perform any work tasks.”
Vought, a longtime budget specialist, took control of the agency on Friday. He is the architect of the right-wing policy manifesto known as Project 2025, which called for the CFPB’s abolition.
Efforts by President Donald Trump’s administration to neutralize the agency escalated over the weekend as Elon Musk’s Department of Government Efficiency DOGE, gained full access to CFPB computer systems. Vought ordered a stop to all oversight of consumer financial companies.
The White House said in a statement the CFPB has long functioned as another “woke, weaponized arm of the bureaucracy that leverages its power against certain industries and individuals disfavored by so-called elites.”
The CFPB was created as part of the sweeping 2010 Dodd-Frank financial reform law, part of an effort to ensure a sole agency was charged with monitoring the financial wellbeing of consumers.
The agency does not receive direct funding from Congress, but requests its budget from the Federal Reserve. Vought has already said he intends to seek no new funding for the CFPB, which currently has cash reserves of over $700 million.
U.S. Senator Elizabeth Warren, the top Democrat on the Senate Banking Committee who first proposed and helped launch the agency, posted a video on Monday in which she said she was “ringing the alarm bell.”
The Trump-Musk effort to kill the CFPB was a “payoff” to campaign donors who wanted to be rid of government oversight, Warren said.
She and U.S. Representative Maxine Waters, the top Democrat on the House Financial Services Committee, will meet in front of the CFPB’s headquarters on Monday to demand answers regarding Musk’s “takeover of the agency,” according to a statement from Waters’ office.
Efforts to undermine the CFPB put consumers at risk of falling victim to fraud and scams and other abusive financial industry practices, non-profit organization Consumer Reports warned.
“The administration’s latest efforts to halt activity at the CFPB makes clear that they are intent on effectively shutting it down for the next four years,” said Delicia Hand, senior director, digital marketplace, at Consumer Reports in email.
Bank stocks were underperforming the broader market index (.SPX), opens new tab on Monday with S&P 500 bank index down 1.9% in afternoon trade.
Synchrony Financial Chief Financial Officer Brian Wenzel said the company has not changed the way it interacts with the CFPB so far.
“We are keeping our head down,” he told a financial conference on Monday. “We have a lot of respect for the CFPB. We will continue to deal with them; it’s business as usual.”
CFPB backers say it has served as a critical safeguard for consumers, reaping billions in repaid funds to wronged parties. But the financial industry and Republican lawmakers have griped the CFPB is too powerful and lacks accountability.
Complaints escalated under its most recent Democratic director, Rohit Chopra, whom they said tested the boundaries of legal activity at the agency with his aggressive policing of the financial sector.
“It is likely that recent CFPB rule makings on fees get rolled back, although they were not yet implemented, so status quo for consumers,” said Christopher Wolfe, head of North American banks at rating agency Fitch.
“The CFPB has been a political football almost since its inception and looks like that will remain the case.”
Source, AP, Bloomberg, Reuters