"Trump's CFPB Cuts: A Blow to Consumer Protection?"

The acting director of the Consumer Financial Protection Bureau (CFPB), Russell Vought, appointed by U.S. President Donald Trump, has taken the unprecedented step of cutting off the agency's funding and suspending some of its oversight activities. In a Feb. 9 statement, Vought announced that he had informed the Federal Reserve that the CFPB would not be taking its next draw of unappropriated funding, citing that it was not "reasonably necessary" to carry out its duties. He also stated that the agency's current balance of $711.6 million was excessive in the current fiscal environment.

The CFPB, established in the wake of the 2008 financial crisis, is responsible for regulating financial companies and protecting consumers from abusive and predatory practices. It also handles complaints related to U.S.-based cryptocurrency exchanges. Vought's actions have raised concerns among consumer advocates and financial experts, who worry that the agency's ability to fulfill its mission may be compromised.

In addition to cutting off funding, Vought also sent a memo to CFPB staff instructing them to "cease all supervision and examination activity." This includes halting all investigations, refraining from opening new ones, and suspending the issuance of rules, guidance, and public comments. Staff were also told that the CFPB's office would be closed for the week, and they would have to work from home.

The CFPB's funding mechanism is unique, as it is financed through budget requests to the Federal Reserve, unlike other agencies that rely on the typical appropriations process through Congress. Vought, who also serves as the director of the White House's Office of Management and Budget, has been critical of the CFPB's funding structure, arguing that it contributes to the agency's lack of accountability.

Vought's appointment to head the CFPB on Feb. 7 was controversial, as he was previously a co-author of Project 2025, an initiative from a right-wing think tank aimed at reshaping the U.S. government and giving more power to the president. Critics have accused Trump of attempting to weaken the CFPB and undermine its consumer protection mission.

Dennis Kelleher, the co-founder of financial oversight advocacy group Better Markets, criticized Trump's actions, stating that the president was "throwing his own supporters 'to the financial wolves'" by "trying to kill the CFPB." Kelleher argued