CFPB Operations Uncertain as Administration Issues “Stop Work” Order

Action: Acting CFPB Director Orders Employees to Stop Work, Including Supervision and Examination Activity

What it does: On February 8, Russell Vought, Director of the Office of Management and Budget and Acting Director of the Consumer Financial Protection Bureau (CFPB), ordered CFPB’s employees to stop nearly all work, closed the agency’s headquarters, and took steps to block the agency’s funding. Congress established the CFPB in 2010 in response to the 2007-2008 financial crisis; it has responsibility for enforcing a variety of consumer protection laws for depository institutions with more than $10 billion. It also has supervisory authority over certain other financial service providers, including mortgage originators and services, payday lenders, and private student loan lenders regardless of size and other “larger participants” in financial services as defined by CFPB regulations.

Key Insights

• Republicans have long criticized CFPB, in part because of the agency’s structure. The CFPB does not receive a Congressional appropriation (it is funded through the Federal Reserve) and has a single director who, until a 2020 Supreme Court decision, could be dismissed only for cause. Opponents argue that this structure makes the CFPB unaccountable to elected officials.
• A 2024 Supreme Court decision upheld CFPB’s funding structure, limiting lawmakers’ ability to shutter the agency. The latest steps represent an escalation in this ongoing conflict.
• It is unclear how long the stop work order will last. The National Treasury Employees Union filed a lawsuit challenging the Acting Director’s authority to stop the work of an agency Congress has established. Indefinite suspension of work would also pause a variety of functions required by statute, including bank examinations.
• On February 12, the President nominated a former Federal Deposit Insurance Corporation board member as permanent head of the CFPB.
• Relatedly, Democrats have also raised concerns that staffers affiliated with the DOGE effort obtain access to CFPB systems containing sensitive bank examination data and personnel information.