nick-fewings / unsplashThe CFPB developments over the last ten days have been staggering. It was just last week that Director Chopra was removed. Within 2 days of Director Chopra’s removal, Scott Bessent was named Acting Director and immediately halted all rulemaking, public comments, and other CFPB activity. Not even a week later, on Friday, February 7, 2025, Russel Vought was named Acting Director. He promptly ordered CFPB staff to stop virtually all their work, including supervision and enforcement.
If you weren’t glued to your phone this weekend, here are the details of what’s taken place:
On Friday February 7,
- Elon Musk tweeted “CFPB RIP [Gravestone Emoji]”
- NPR reported DOGE (Department of Government Efficiency) entered the CFPB;
- The CFPB’s main website stopped working.
On Saturday February 8,
- Vought posted on X that the “Bureau’s current balance of $711.6 million is in fact excessive” and therefore the CFPB will not take “its next draw of unappropriated funding.”
- The full text of the letter can be found here.
- Per NBC news, Vought sent an email to CFPB employees instructing them to “cease all supervision and examination activity,” “cease all stakeholder engagement,” pause all pending investigations, not issue any public communications and pause enforcement actions.
- The full text of the email can be found here.
- Reuters reported that CFPB workers protested Vought’s takeover.
CFPB staff warn that Vought’s moves will leave American families exposed to financial abuse. Elizabeth Warren (D-Mass), tweeted, “Vought is giving big banks and giant corporations the green light to scam families.”
According to CRC Legal Advisory Board member Joann Needleman of Clark Hill, “There has always been a period of transition and standstill at agencies during a change of the Executive branch, however this time around the transition is very extreme and draconian. I would be very cautious from an industry standpoint, meaning don’t pop your champagne corks so fast. When you gut a three-headed monster, it just grows more heads. Former Director Chopra was a lot of things but he was smart enough to know that the CFPB always had an existential threat to its existence, especially if it had to operate under a Republican administration in the future. Since coming to office, the former Director was channeling to the states their ability to do the work of the CFPB, should the CFPB’s authority be curtailed.”
“If you follow the Federal Financial Institutions Examination Council’s (FFIEC) meetings, the formal interagency body empowered to prescribe uniform principles, standards, and report forms for the federal examination of financial institutions by the various prudential regulators and the CFPB, you will know this is exactly what Chopra has been doing. If the CFPB is shuttered, these examiners and career employees will need somewhere to go. Last month the Pennsylvania AG’s office posted on LinkedIn that it was hiring enforcement attorneys in Philadelphia. State debt collection examinations are no picnic. State regulators have concurrent authority to enforce federal law, including the FDCPA and UDAAP, especially if federal regulators are eliminated. Private actions are also going to sky rocket and remember there is no more deference to agency interpretation under Loper Bright. Let’s hope Ross Vought and whoever is chosen as the new Director, brings regulatory consistency to the CFPB. This industry has spent too long building a Reg F infrastructure only to revert back to frivolous, whack a mole lawsuits.”
As we suggested a mere 6 days ago, ultimately time will tell what this all means, but for right now, we can solidly say the pattern of the previous iteration of the CFPB has come to an end.
