Trump’s CFPB chief suspends funding and halts oversight

Russell Vought, the newly appointed head of the Consumer Financial Protection Bureau (CFPB), has initiated significant changes to the agency, including cutting off its new funding and suspending oversight activities.

On February 9, Vought announced that the CFPB would not take its next draw of unappropriated funds, as the agency’s current balance of $711.6 million was deemed excessive for the current fiscal environment.

He notified the Federal Reserve that the funding was “not reasonably necessary” for carrying out its duties.

The CFPB, originally established to regulate financial companies and prevent abusive practices, has often been at odds with the crypto industry.

In 2023, the agency proposed regulating crypto wallet providers but faced backlash and was forced to backtrack.

Vought’s memo to CFPB staff further emphasised the suspension of all activities, including supervision, investigations, rulemaking, and issuing public comments.

Staff were also informed that the office would close temporarily, and they would need to work remotely.

The CFPB, which typically receives funding through budget requests to the Federal Reserve, has been criticised for its lack of accountability, and Vought’s decision to halt funding aims to address this issue.

Vought, who also leads the White House’s Office of Management and Budget, took over the CFPB from Treasury Secretary Scott Bessent on February 7.

He has been involved in Project 2025, a right-wing initiative aimed at reshaping US governance and increasing presidential power.

Critics like Dennis Kelleher, co-founder of the financial oversight group Better Markets, argue that Vought’s actions will harm the American public, especially working-class citisens who rely on basic financial services.

He accused Vought of undermining the CFPB, a bureau established to protect consumers from financial harm.