CFPB Operations Halt Under Trump, Legal Challenges Could Revive Agency

Enforcement and all other activities at the Consumer Financial Protection Bureau (CFPB) have come to a standstill under directives from the Trump administration. However, ongoing lawsuits seeking to keep the agency operational suggest that the disruption may be short-lived.

The CFPB, established in 2011 in response to the 2008 banking crisis, functions as a financial watchdog for American consumers. It has recently targeted online payment applications, including Block, and major financial institutions like Capital One and JPMorgan Chase.

Under its former director, Rohit Chopra, who was dismissed by President Donald Trump on February 3, the agency aggressively pursued regulatory measures, particularly concerning Big Tech, financial privacy, gaming, and cryptocurrencies. One of its most recent initiatives—a set of privacy rules for gaming payment applications—now remains in limbo.

According to the National Treasury Employees Union (NTEU), which represents approximately 1,600 CFPB employees, the agency has provided over $21 billion in financial relief to nearly 200 million Americans. Unlike most federal agencies, the CFPB is uniquely funded through the Federal Reserve.

Senator Elizabeth Warren (D-Mass.), a longtime advocate for the agency, has emphasized its importance in protecting consumers and the financial system. “Congress created the CFPB to protect people from getting swindled,” she declared at a rally on Monday.

Conversely, critics, including Trump, argue that the agency has overreached in its regulatory actions against banks and technology firms, particularly in its enforcement efforts. The Trump administration, in a series of recent moves, has sought to dismantle the CFPB, a development that comes as no surprise to many observers.

On Thursday, Elon Musk’s extra-governmental Department of Government Efficiency (DOGE) reportedly began reviewing the agency’s online records. Musk, who owns and controls the social media platform X, formerly known as Twitter, posted on the site: “CFPB RIP.”

Since Saturday, Treasury Secretary Scott Bessent and CFPB Acting Director Richard Vought have issued directives cutting the agency’s funding and suspending its enforcement and rulemaking activities. Employees have been instructed not to report to work this week.

The NTEU has responded swiftly, filing two lawsuits in U.S. District Court for the District of Columbia on Sunday to challenge the shutdown. One lawsuit addresses employee privacy concerns and Musk’s access to CFPB records, while the other argues that Vought’s directives should be overturned on the grounds that the president lacks the authority to dismantle or redefine the mission of a congressionally established executive agency.

In a press release issued Monday, the NTEU emphasized the agency’s critical role: “Frontline employees at CFPB are committed to ensuring financial products Americans use daily—such as credit cards, automotive financing, and home mortgages—are fair, transparent and competitive.”

Trump, defending the administration’s actions, issued a statement characterizing the CFPB as “the brainchild of Sen. Elizabeth Warren.” He further criticized the agency, claiming it “has long functioned as another woke, weaponized arm of the bureaucracy that leverages its power against certain industries and individuals disfavored by so-called ‘elites.’”

By fLEXI tEAM