CFPB Funding Halted By New Leadership Under Trump Administration

According to Cointelegraph, U.S. President Donald Trump's newly appointed head of the Consumer Financial Protection Bureau (CFPB), Russell Vought, has announced a significant shift in the agency's operations. Vought has halted new funding for the CFPB and instructed staff to suspend all activities. In a statement made on February 9, Vought revealed that he informed the Federal Reserve that the CFPB would not be drawing its next round of unappropriated funding, deeming it unnecessary for the agency's duties. He highlighted that the current balance of $711.6 million is excessive given the fiscal environment. The CFPB, established to regulate financial entities like banks and money transfer firms, aims to prevent abusive practices that contributed to the 2008 financial crisis. It also handles complaints related to U.S.-based cryptocurrency exchanges. The agency has faced scrutiny from the crypto industry, particularly after proposing oversight of crypto wallet providers in 2023. Although the proposal was eventually dropped, tech trade groups recently sued the CFPB, accusing it of an unlawful power grab. Reports from Reuters and Politico on February 9 indicate that Vought sent a memo to CFPB staff, instructing them to cease all supervision and examination activities. The memo also directed staff to halt ongoing investigations, refrain from initiating new ones, and stop issuing rules, guidance, and public comments. Additionally, staff were informed that the CFPB office would be closed for the week, requiring them to work remotely. The CFPB's funding process involves budget requests to the Federal Reserve, differing from the typical congressional appropriations process for other agencies. Vought, who also leads the White House's Office of Management and Budget, emphasized that this funding mechanism, which he claims has contributed to the CFPB's lack of accountability, is now being terminated. Vought assumed leadership of the CFPB on February 7, succeeding Treasury Secretary Scott Bessent. He is also known for co-authoring Project 2025, an initiative aimed at restructuring the U.S. government to enhance presidential power. Dennis Kelleher, co-founder of the financial oversight advocacy group Better Markets, criticized the move in a statement on February 9. He accused President Trump of abandoning his supporters by attempting to dismantle the CFPB, describing it as a betrayal to Americans who rely on essential financial services, particularly those within the diverse working-class coalition that supported Trump's election.