Latest to Draw DOGE Scrutiny: Consumer Financial Protection Bureau

In its latest frontal attack on the federal bureaucracy, the Trump administration is moving to drastically downsize the Consumer Financial Protection Bureau.

The agency, created during the Obama administration, has been temporarily rendered ineffective, as a Trump appointee ordered its employees to stop working Sunday.

Created by a 2010 act of Congress as an agency, the CFPB has long been accused by detractors of a lack of accountability, political bias, and unconstitutionality. Now, the agency appears to be on the chopping block.

On Friday, Russell Vought, the newly appointed head of the Office of Management and Budget, took over as acting director of the CFPB. One of his first actions as head of the agency was to turn down the hundreds of millions dollars it receives from the Federal Reserve.

“I have notified the Federal Reserve that CFPB will not be taking its next draw of unappropriated funding because it is not ‘reasonably necessary’ to carry out its duties,” wrote Vought on X. 

“The Bureau’s current balance of $711.6 million is in fact excessive in the current fiscal environment. This spigot, long contributing to CFPB’s unaccountability, is now being turned off.”

Unlike with other agencies, the Trump administration is able to easily turn off funding for CFPB because of one peculiar feature of the agency: It does not receive money directly from Congress’ appropriated funds, but rather from the Federal Reserve.

Onetime Republican presidential candidate Vivek Ramaswamy, who has criticized the CFPB for years, applauded Vought’s cancellation of the funding, writing on X, “The CFPB was funded by the Fed, not Congress, to avoid transparency & accountability. But the beauty is, that makes it possible to defund & wind down through executive action alone. A thing of beauty right here. Well done”

But why is the Trump administration trying to gut the CFPB?

Shortly after announcing his move to cut funding to the agency, Vought posted a Washington Examiner article, “Trump must cancel CFPB censorship,” writing, “The CFPB has been a woke & weaponized agency against disfavored industries and individuals for a long time. This must end.”

The article argues the CFPB can easily apply heavy fines to any company it accuses of racial discrimination, with little accountability and a low burden of proof.

During the first Trump administration, the president undid the CFPB’s anti-racial discrimination regulations on auto loans, with his fellow Republicans arguing that the agency’s regulations were arbitrary and burdensome.

The CFPB has also come under fire in years past, with claims that its independent status is unconstitutional.

In 2020, the Seila Law LLC v. Consumer Financial Protection Bureau court case came before the Supreme Court, and the majority ruled that protections against the agency’s director being fired violated the constitutional separation of powers.

Vought went a step further in his reform of CFPB on Sunday, halting most operations and ordering approximately 1,700 CFPB workers to stay home.

Those actions, much like the downsizing of USAID before, have attracted the ire of Democrats.

Sen. Elizabeth Warren, D-Mass., took to X on Monday, accusing Trump of trying to kill the CFPB as a favor to wealthy donors.

“President [Donald] Trump campaigned on lowering costs. But he’s letting billionaire Elon Musk and Project 2025 Architect Russ Vought kill the Consumer Financial Protection Bureau,” Warren wrote. “If they succeed, CEOs on Wall Street will once again be free to cheat you out of your savings.”

Republicans have remained mostly quiet on the move, although Elon Musk applauded it on X, writing, “CFPB has $711M? That money should be returned to taxpayers.”

The CFPB, for the moment virtually powerless, is just the latest federal agency to be put on the chopping block, as Trump grants Vought and Musk broad authority to restructure the federal bureaucracy.

The post Latest to Draw DOGE Scrutiny: Consumer Financial Protection Bureau appeared first on The Daily Signal.