Acting CFPB Director Freezes Funding for the Agency

Acting Consumer Financial Protection Bureau Director Russ Vought has frozen all new funding to that agency.

This from redstate.com.

In a memo to Federal Reserve Chairman Jerome Powell, Vought, who was just confirmed as Office of Management and Budget Director, said:

This letter is to inform you that in the Third Quarter of Fiscal Year 2025, the Bureau is requesting $0.

Why CFPB thought it needed a “reserve fund” of nearly $1 billion is an open question, and it should figure prominently into some personnel decisions that are likely on the way.

Yesterday, Red State posted on Vought reiterating to CFPB the same stop work order that was given to them by Treasury Secretary Scott Bessent during the few days he was acting CFPB director; see Consumer Financial Protection Bureau’s Website Goes Dark and the Woodchipper Warms Up.

In the email, Vought said the regulator—which oversees banks, payment firms and other financial institutions—should cease all supervision activity. The CFPB has dedicated examination teams for large institutions.

Vought also reiterated staff should not be approving or issuing any proposed or final rules or formal or informal guidance, directed them to suspend effective dates for rules that have yet to take effect, and ordered them [not to] open any new investigations, cease existing investigations, and pause all investigative activities and enforcement actions.

He also instructed staff not to issue public communications of any type, including research papers and compliance bulletins, approve any new agreements, or make appearances or approve filings in any ongoing litigation from the bureau.

In the email, Vought urged CFPB staff to ‘raise issues through your existing management for consideration by the Acting Director.’

The beauty of this move is that when Elizabeth Warren set up the CFPB, she attempted to insulate it from influence or management by either the Executive or Legislative branches. Contrary to other agencies that are managed by a group of directors who the president can remove, the CFPB had a single director who could only be removed for cause.

The Supreme Court struck down that arrangement in 2020. She also had the CFPB draw funds directly from the Federal Reserve, bypassing the appropriation process. In the best “it isn’t a tax” tradition of John Roberts’s jurisprudence, that funding arrangement survived a Supreme Court challenge.

This combination of events has led to a situation where one man, that would be Russ Vought, can do pretty much as he wishes because there is no Congressional oversight, and he can’t be forced to spend money because there are no appropriations.

In short, the CFPB is going to be substantially cut down in size if not altogether eradicated.

Below is the letter to Jerome Powell.

Dear Chairman Powell: The Consumer Financial Protection Act requires the Board of Governors of the Federal Reserve System to transfer each quarter an ‘amount determined by the Director to be reasonably necessary’ for the Bureau of Consumer Financial Protection to carry out its authorities under law. 12 U.S.C. 5497(a)(1). In determining this amount, the Director must ‘take into account such other sums made available to the Bureau from the preceding year’ or quarter.

This letter is to inform you that for the Third Quarter of Fiscal Year 2025, the Bureau is requesting $0.

During my review of the Bureau’s finances, I have learned that the Bureau has a balance of $711,586,678.00 in the Bureau of Consumer Financial Protection Fund. By law, I must take account of this sum when determining the amount “reasonably necessary” for the Bureau to fulfill its statutory authorities. I have determined that no additional funds are necessary to carry out the authorities of the Bureau for Fiscal Year 2025. The Bureau’s current funds are more than sufficient—and are, in fact, excessive—to carry out its authorities in a manner that is consistent with the public interest.

In the past, the Bureau has at times opted to maintain a “reserve fund” for financial contingencies. But no such fund is required by statute or necessary to fulfill the Bureau’s mandate. The Bureau’s new leadership will run a substantially more streamlined and efficient bureau, cut this excessive fund, and do its part to reduce the federal deficit.

God speed to the Trump-Vance team.