The U.S. agency established to protect consumers from harmful financial services industry practices is under seige – the latest target of the Trump Administration and Elon Musk’s unofficial Department of Government Efficiency (DOGE).
In rapid succession between Friday, Feb. 7 and Sunday, Feb. 9, members of Musk’s team entered the offices of the Consumer Financial Protection Bureau in Washington, gained access to the internal computer systems and shut down the CFPB account of the Musk-owned X(Twitter) social network.
Musk ‘tweeted’ a seven character obituary of his own “CFPB RIP” late Friday afternoon.
Also on Friday, President Trump named Russell Vought as the new acting director of CFPB, replacing Scott Bessent who had been named to replace long-time director Rohit Chopra. Trump fired Chopra Jan. 31.
Vought is the newly approved director of Office of Management and Budget, and was also an author of the Project 2025 blueprint which called for CFPB to be abolished.
On Saturday, Vought sent an e-mail to staff ordering them to stop almost all work, and, on Sunday, staff were told the head office would be closed for a week, according to multiple published reports.
In theory, this means the top consumer financial watchdog is no longer ‘active’, and banks, lenders and other financial institutions could do what they please. The Bureau was formed during the Obama administration, as an output of investigation into the financial crisis of 2008 that nearly included the demise of Wall Street. It regulates banks and financial institutions with more than $10 billion in assets. CFPB figures show it has obtained nearly $20 billion in relief for consumers since it was founded, in the form of debt relief, reduced loans and other compensation.
Since it is a creation of Congress, its formal elimination would require a separate act of Congress. Its funding comes directly from the U.S. Federal Reserve, a policy which was upheld by the Supreme Court in 2024, ironically to reduce the political risks of the Bureau. It has about 1,700 employees.
But its operations are directed by the agency head, and for the moment, suspended. CFPB activities were greatly reduced during the first Trump administration, with acting director Mick Mulvany calling the agency a joke.
Though the CFPB has no direct authority over Canada, its research and policies have considerable influence. Policy initiatives around open banking, for example, will view U.S. requirements carefully. CFPB research was also an important input into recent changes to lower maximum allowable lending rates in Canada. Regulations to update Canada’s Financial Consumer Protection Framework include multiple references to CFPB research.
The agency has proposed new rules to oversee digital payment platforms such as Apple Pay and Google Pay. Musk’s X is working with Visa to develop its own X Money system, which would place its services under CFPB supervision. CFPB also supervises auto lenders, such as Musk’s Tesla company.
Musk, the world’s richest person, has been given wide, unofficial authority from Trump to reduce government spending. As a kind of hench-billionaire, Musk has previously targeted USAID, the main U.S. foreign aid agency. Like the USAid initiative, legal action is likely to result from the attack on CFPB.