Russell Vought, the Director of the Office of Management and Budget and the Acting Director of the Consumer Financial Protection Bureau announced yesterday during an appearance on “The Charlie Kirk Show” that the CFPB will be closed “within the next two to three months,” claiming the agency “is not protecting consumers” and instead weaponizes financial law against small lenders. He pointed to what he called the CFPB’s “DNA of Elizabeth Warren” as evidence of partisan overreach.
That claim comes amid a broader Trump-administration campaign to shrink or reconfigure the agency. Since February, the CFPB has been in turmoil: mass firings, suspended rulemaking, and directives to cease investigations and published guidance.
For the credit and collection industry, the CFPB has been a central regulatory counterweight. If it is dismantled, the oversight landscape changes overnight. Firms that once bristled under heavy compliance burdens may find expanded operational freedom, but also face increased consumer backlash, state-level enforcement risk, and reputation hazards.
Consumer advocates, unions, and others have responded forcefully to the administration’s attempts to shutter the Bureau:
- In February, the National Treasury Employees Union, which represents CFPB employees, filed suit alleging that ordering CFPB employees to halt work violated Congress’s authority over federal agencies.
- In March, Judge Amy Berman Jackson issued a preliminary injunction blocking further mass firings and requiring reinstatement of many employees.
- Meanwhile, the DC Circuit Court vacated a prior injunction and allowed the administration to move ahead with layoffs.
- That court decision effectively gave the administration legal cover to proceed, though critics call the move a partisan end-run.
- The NTEU is seeking an en banc review of its case before the entire Court of Appeals for the District of Columbia.
Vought did not provide any additional details about how the administration will accomplish closing the Bureau, and the plan will face stiff headwinds. The CFPB was created by Congress under Dodd-Frank and is funded via a mechanism tied to the Federal Reserve, not via annual appropriations. Any attempt to dismantle it unilaterally is likely to trigger constitutional challenges based on separation of powers and violations of statutory intent.
Vought also mentioned during his appearance that “north of 10,000” federal employees could be fired through a Reduction in Force as part of the government shutdown, although a federal judge yesterday blocked the administration from firing anyone during the shutdown.
