Madison Obata
Associate Editor
Loyola University Chicago School of Law, JD 2026
The US Consumer Financial Protection Bureau (CFPB) is a government agency that ensures consumers are “treated fairly by banks, lenders, and other financial institutions.” Along with enforcing consumer protection laws, the CFPB oversees products, like credit cards and mortgages, and investigates complaints regarding dishonest or illegal activity to hold companies accountable. The CFPB has faced controversy about whether or not the agency has too much power. However, the CFPB is currently under increased scrutiny by the Trump administration, which could result in issues with consumer financial protections.
The role of the CFPB
The CFPB is an independent bureau within the Federal Reserve that ensures fair and transparent financial products. It also “implements and enforces federal consumer financial laws.”
If a consumer thinks they have been a victim of a financial scam or have a complaint about a financial product or service, the consumer can submit a complaint and the CFPB will review it. However, the CFPB does not only rely on consumer complaints, but will oversee financial institutions like banks to regulate against fraud or unfair practices.
For example, the CFPB is tasked with watching over the home buying process when it comes to mortgage rates. The CFPB spearheaded the home buying process to make it easier with simpler forms and tools. The CFPB has held banks and lenders accountable from filing against discriminatory mortgage lending practices to the mishandling of consumer bank accounts, which have resulted in redress payments and significant fines.
Overall, the CFPB has been labeled a watchdog to protect consumers and their money.
Who is Russell Vought?
On February 7th, 2025, Russell Vought took over as the acting director of the CFPB. Vought was confirmed again by the Senate to lead the Office of Management and Budget (OMB). The OMB is in charge of developing the budget for the White House and rule-making. Vought served as a Senate aide, executive director of the Republican Study Committee, and policy director for House Republicans. Vought wrote a chapter for Project 2025, which talks about the OMB’s role and advocates the need “for aggressive use of the vast powers of the executive branch to return power […] to the American people.”
Additionally, Vought supports reducing billions of dollars from the government budget including cuts to low-income assistance programs, the Department of Housing and Urban Development, and to Medicaid.
Quick changes with the CFPB
After this change in leadership, the CFPB X (formerly Twitter) account was deactivated, which was confirmed through a post by Elon Musk. Musk’s Department of Government Efficiency (DOGE) has cut funding and shut down the CFPB headquarters.
The dismantling of the CFPB follows the footsteps of the US Agency for International Development (USAID) lay offs and funding freeze. Like USAID, DOGE followed the same steps of telling employees to not go back into the office, stop all work, and then put on administrative leave. In a post on X, Vought criticized CFPB by calling it a “spigot” that was being “turned off.”
Responses to the CFPB Closure
Unlike the opposition to the creation of the CFPB from conservatives, there have been multiple responses regarding the dangers of dismantling institutions like CFPB. The CFPB union, NTEU 335, said that getting rid of the the CFPB is “a clear attempt to attack union workers and defang the only agency that checks the greed of payment providers, as well as auto lenders like Tesla.” NTEU 335 also brought up concerns with the private information that CFPB collected from large payment platforms like PayPal or Apple. This proprietary information mixed with conflicts of interest could be exploited.
Senator Elizabeth Warren responded to the shut down as “another scam” and that it is time to “[ring] the alarm bell.” Warren played a role to create CFPB. Furthermore, representative Maxine Waters criticized Musk’s participation to “gut the agency” that protects consumers. Waters also expressed concerns that platforms, like X, means Musk will have access to sensitive information about other American companies. Musk could essentially steal this information for his own gain.
The CFPB cut and consumer protection
The CFPB employees warn that Vought’s moves will leave American families exposed to financial abuse. The CFPB regulates banks and financial institutions to ensure that consumers are not being cheated. For example, CFPB sued Capital One for cheating consumers out of about $2 billion in interest from savings accounts. Without institutions like CFPB, there are no protections in place or it is up to the consumer to be vigilant.
The CFPB has done a lot of work to make finance practices fair. For example, medical debt and bills do not affect credit reports because of the rule that CFPB put in place. This ensures that medical debt will not be a limitation when it comes to loans and other institutions that use consumer credit reports to make decisions. It is unclear if rules like this will be dismantled.
From banking to credit reports, consumers need the government and institutions like CFPB to advocate for them and hold companies accountable. As an independent agency, CFPB provides necessary checks and balances. The overhaul of CFPB, that protects consumers from fraud, predatory lending, and discriminatory financial practices, is too aggressive and leaves consumers vulnerable.