Consumer Financial Protection Bureau Staff Awaiting Further Instruction From Vought, DOGE

According to a Feb. 9, 2024, memo obtained by CNBC, Consumer Financial Protection Bureau employees were told to stay home and that their Washington, D.C., headquarters would be closed through Fri., Feb. 14.

The Consumer Financial Protection Bureau, or CFPB, is an independent agency that was created in the aftermath of the 2008 financial crisis to prevent banks and other financial organizations from exploiting Americans – including monitoring how financial entities use social media and algorithms to target consumers.

It was originally proposed in 2007 by Senator Elizabeth Warren while she was a law professor. The CFPB’s creation was authorized by the Dodd–Frank Wall Street Reform and Consumer Protection Act. It has approximately 1,700 employees.

“It is unclear what the consequences of defunding the Consumer Financial Protection Bureau are at this point. What the overall message of the Department of Government Efficiency from the beginning is that there are ‘too many duplicative financial regulatory agencies’ – and the CFPB has long been a target. However, the CFPB’s funding mechanism has already been challenged in the Supreme Court, so any changes will require congressional action,” said Robert Cruz, vice president, regulatory and information governance at Smarsh, a communications data and intelligence company.

The Feb. 9 memo followed an email sent on Feb. 8 from Russ Vought, newly installed acting CFPB director, which instructed staff to suspend supervision of financial firms and nearly all activities of the regulator. The memo also stated that the administration was halting any new funds from reaching the bureau.

Vought reiterated his orders in an agency-wide email on Feb. 10, saying that employees needed clearance from Mark Paoletta, chief legal officer, to do any CFPB business.

“Otherwise, employees should stand down from performing any work task,” Vought wrote.

Elon Musk’s Department of Government Efficiency infiltrated CFPB last week. DOGE employees have been given access to CFPB data sources and private information, including staff performance reviews.

Last year, Musk called for the deletion of the CFPB and more recently wrote “CFPB RIP” on the social media platform X.

“While no existing agency has exactly the same mandate, it is likely that other agencies – like the Federal Trade Commission, Federal Deposit Insurance Corporation, or Office of the Comptroller of the Currency – would take parts of its responsibilities instead of creating a replacement. This would cover areas including consumer lending laws, credit card junk fees, as well as rules protecting mortgage applications,” added Cruz.

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