���������

Despite continued attempts by Republican lawmakers to shut down the Consumer Financial Protection Bureau (CFPB), the agency’s current acting director has said the Trump administration has no such plans.

Responding to one of several lawsuits that have hit the agency over the past month, acting director Russ Vought has said there will “” under President Trump.

The comments were made in a 53-page legal defence that Vought filed in response to the , which sued the CFPB and its acting director earlier this month.

As in other similar lawsuits, the NTEU claimed that Vought’s decision to draw $0 in CFPB funding for the upcoming quarter is unlawful, and called on the courts to issue a preliminary injunction against it.

“Neither the president nor the head of the CFPB has the power to dismantle an agency that Congress established,” the plaintiffs said.

“By suspending the statutorily mandated activities of the CFPB, Trump and Vought’s shutdown of the CFPB runs afoul of core constitutional separation of powers principles, Congress’ express statutory directive, and the Administrative Procedure Act.”

If allowed to stand, Vought’s decision would effectively defund the CFPB, although Vought has claimed that the agency’s reserve balance of $711m would be sufficient for the period in question.

Responding to the NTEU lawsuit, Vought described the injunctive relief sought by the plaintiffs as “breathtaking in scope”.

“That relief would essentially place the CFPB in a judicially managed receivership, with its day-to-day decision-making across a universe of issues superintended by the court, rather than by the officer designated by the President,” he said.

He added that incoming Presidents “routinely” issue directives that temporarily prohibit federal agencies from developing rules and regulations that originated under the previous administration.

This can include freezes on regulatory actions, he added, including active enforcement and litigation activities.

Although Vought has chosen not to emphasise this detail in his X posts, the acting director also reminded plaintiffs that, in his first email to CFPB staff, he permitted their work to continue if “required by law”.

New director means new life for the CFPB

The NTEU’s lawsuit describes Vought’s actions as being part of a “coordinated campaign by the new administration to eliminate” the CFPB.

In response, the acting CFPB chair said the NTEU is engaging in “spin”, and that current CFPB employees have engaged in street protests in an effort to disrupt the agency.

Neither of these responses are necessary, Vought argues, as the Trump administration has no plans to abolish the CFPB.

He pointed, for example, to Trump’s nomination of John McKernan, currently a board member at the Federal Deposit Insurance Corporation (FDIC), as the next permanent director of the CFPB.

On Thursday (February 27), McKernan is set to appear at his first confirmation hearing before the Senate Banking Committee.

McKernan’s confirmation would render the plaintiffs’ view of the CFPB’s demise “inconsistent”, said Vought.

In addition, Vought pointed to the text of his funding letter to the Federal Reserve Board.

In it, he wrote that the “Bureau’s new leadership will run a substantially more streamlined and efficient bureau”, implying that the CFPB will continue to exist, albeit in a reduced form.

New bill to abolish the CFPB

Vought’s claim that the CFPB will live on under President Trump begs the question why other Republicans and Trump allies are still attempting to abolish it.

This week, Representative Byron Donalds (R-FL) announced that he plans to introduce legislation that will “completely eliminate” the CFPB.

Donalds made this announcement one week after Trump nominated McKernan as the new permanent director of the CFPB.

Posting on X, Donalds criticised the CFPB’s direct funding structure, arguing that its ability to draw funds directly from the Federal Reserve makes it unaccountable to Congress.

“CFPB is a rogue agency with policing and fining powers, but no Congressional oversight,” he . 

“It was created by Elizabeth Warren and passed along a party-line-vote under President Obama.

“This week, I am introducing the bill to eliminate this unaccountable, highly-partisan agency once and for all.”

This is not the first time that Donalds has tried to abolish the CFPB.

In April 2023, the Florida Congressman introduced a  to repeal the CFPB’s founding law, the Consumer Financial Protection Act of 2010.

The bill did not go far. It was introduced to the House of Representatives and referred to the Committee on Financial Services, from where it failed to progress.

However, Donalds is not the only threat the CFPB faces, as the agency appears to have a bigger problem on its hands in the form of Elon Musk.

Although Musk does not have an official position at the Department of Government Efficiency (DOGE), an organisation that he both conceived of and named, he is nonetheless the face of it.

On day one of Trump's second term, the DOGE was created by , with a mission to “modernise” federal technology and “maximise” governmental efficiency and productivity.

Even before the DOGE came into being, Musk had his sights on the CFPB as a target for intervention.

In November last year, the billionaire proposed that the CFPB should be “”, on the grounds that there are “too many duplicative regulatory agencies”.

Musk has continued to commentate on CFPB issues since then, noting, for example, that the agency’s current reserve balance of $711m should be “”.

When Vought took over the agency and told all staff to down tools, Musk posted “” to his X account, alongside an emoji of a gravestone.