The National Treasury Employees Union (NTEU) has filed a lawsuit against Russell Vought, Acting Director of the Consumer Financial Protection Bureau (CFPB), after he ordered the agency’s workers to halt operations.
Vought emailed all CFPB staff On Saturday (8 February) telling them to “stand down from performing any work task.” This meant suspending any investigative work and not starting any new investigations, as well as stopping work on proposed rules.
Vought’s email was later followed by a message that stated the agency’s Washington headquarters was to be closed from 10-14 February, barring any staff from entering the building.
A part of the email read: “Otherwise, employees should stand down from performing any work task. Thank you for your attention on this matter.”
Reacting to this news, the NTEU, which represents over 1,000 frontline employees at CFPB, filed a lawsuit against Vought on Monday (10 February). At the core of the lawsuit is the argument that only Congress has the authority to create or destroy executive branch agencies or dictate missions.
Congress created the CFPB back in 2011 in response to the recession and a need for consumers to have an advocate within the federal government. The agency’s main oversight includes credit cards, automotive financing and home mortgages.
The CFPB issues significant guidance on emerging payment methods. For example, it announced a significant regulatory development last year when it classified BNPL firms in the same bracket as credit providers.
Doreen Greenwald, National President of NTEU, commented: “The only people celebrating a CFPB shutdown are the ones who make money by ripping off American consumers when they borrow money or buy things on credit. Sidelining the employees of the CFPB is a greenlight for unscrupulous behaviour in the financial services industry.”
According to the NTEU, the CFPB has distributed more than $21bn in financial relief to nearly 200 million Americans, including $363m to assist struggling military servicemembers and veterans.
Since 2011, the CFPB has received 6.8 million complaints from consumers, including 4.6 million about credit reporting; 83,000 about medical debt collection; and 96,000 about student loans.
Greenwald added: “CFPB employees are dedicated civil servants who believe in the mission of their agency to force lenders to treat borrowers fairly and stand up for those who fall prey to fraud.
“What is happening to the CFPB should shock all Americans who are wondering what will happen to consumers without the CFPB on the job, and more broadly, what happens when the executive branch ignores the will of Congress.”
A possible closure?
Congress voted Vought into the position on 7 February on a party-line vote of 53-47. In addition to holding the position of Acting Director of the CFPB, Vought is Head of the Office of Management and Budget (OMB).
During the vote, Democrats were warned that debating was not permitted while they labelled Vought as President Donald Trump’s “most dangerous nominee”. However, Vought was described as someone who would “make getting rid of burdensome regulations a priority” by Senate Majority Leader John Thune.
The CFPB Acting Director has long been an advocate for cutting government spending, with the New York Times calling him “Trump’s Thomas Cromwell”.
Since taking office, Trump has focused a great deal on streamlining government spending. This was emphasised when he created the Department of Government Efficiency (DOGE), headed by billionaire Elon Musk.
Last week, DOGE employees entered the CFPB headquarters and gained access to an array of protected information. It is believed the new department was looking to curb government spending on projects deemed unnecessary or wasteful.
Elsewhere, the temporary arm of the government also gained restricted access to the US Treasury, which led to protestors gathering in Washington to voice their concerns. A federal judge has since ruled that DOGE cannot access Treasury records.
At the heart of the concerns expressed by protesters and the Democratic Party is Musk’s growing role in government and political affairs. Ahead of workers being told to cease activity and the headquarters being shut down, Musk posted on X: “CFPB RIP”.
Yesterday, he posted another tweet: “CFPB has $711m? That money should be returned to taxpayers”. This stance is nothing new for Musk, as last year he posted: “Delete CFPB. There are too many duplicative regulatory agencies”.
