The Consumer Financial Protection Bureau (CFPB), often referred to as the “cop on the beat” for protecting Americans from financial abuse, has been effectively sidelined under strict new orders from its leadership. On Monday, Russell Vought, the acting director of the CFPB, sent an email to staff instructing them not to perform any work tasks, adding that the headquarters would be closed for the week. This directive expands on a broader freeze Vought announced over the weekend, which halted all supervision and examination activities. The freeze means the agency is unable to engage in critical functions such as hiring, rulemaking, enforcement actions, investigations, or active lawsuits. It also suspends the effective dates of recently finalized consumer protections and halts all shareholder engagement.
The CFPB was established by Congress under the 2010 Dodd-Frank Act to shield consumers from financial exploitation and regulate providers of financial services and products. However, under the current freeze, the agency is unable to perform its core duties, leaving millions of Americans more vulnerable to financial predators. Democratic Sen. Elizabeth Warren, a key architect of the CFPB, criticized the move during a Senate Banking Committee hearing, emphasizing that the $18 trillion consumer lending market now has “zero cops” overseeing it. Warren highlighted the consequences of the freeze, including canceled investigations into illegal foreclosures, auto repossessions, credit card junk fees, and debt collection practices, as well as stalled rules aimed at saving consumers billions of dollars.
The duration of the freeze remains uncertain, but consumer advocates warn that the longer it persists, the more opportunities bad actors will have to exploit vulnerable individuals. Adam Rust, director of financial services at the Consumer Federation of America, stressed that halting the CFPB’s work does not stop financial risks—it merely allows them to go unchecked. Agency watchers predict that the new leadership at the CFPB may slow-walk or withdraw several consumer protection rules and enforcement efforts, including those initiated during the Biden administration to crack down on “junk” fees. The uncertainty surrounding these rules has left consumers and advocates bracing for potential rollbacks.
Several critical consumer protections are now at risk due to the freeze. For instance, a recently finalized rule banning the inclusion of medical debt on credit reports and preventing lenders from using certain medical information to make loan decisions is facing opposition. Scheduled to take effect on March 17, the rule is already under legal challenge from industry groups, and experts believe it may be scrapped under the current leadership. Similarly, a rule capping credit card late fees at $8, which was projected to save families $10 billion annually, has been blocked by a federal judge and may be abandoned by the CFPB. Another rule capping bank overdraft fees at $5, set to take effect in October, is also under threat as banking associations argue it exceeds the agency’s authority.
Additionally, the CFPB’s “open banking” rule, finalized in October, aims to make it easier and safer for consumers to switch banks or share their financial data. This rule, which could level the playing field between traditional banks and fintech companies, is facing a lawsuit from banking associations that allege it risks consumer privacy and security. While the rule’s effective date is not until 2026, its fate remains uncertain. The CFPB also recently sued major banks over their handling of fraud on Zelle, a peer-to-peer payment system, but the freeze on enforcement activities suggests this case and others like it may languish unresolved.
The future of the CFPB remains deeply uncertain. While the agency was created by Congress and can only be dismantled through legislative action, its effectiveness under the current administration is under severe threat. President Trump has explicitly stated his goal to “totally eliminate” the CFPB, and Elon Musk has echoed this sentiment. The administration’s actions have raised concerns among CFPB employees and consumer advocates, who fear that the agency’s ability to deliver meaningful benefits to working-class Americans will be undermined. Despite these challenges, Sen. Warren remains optimistic, noting that the CFPB has weathered significant opposition in the past and will likely continue to do so. However, experts warn that halting the agency’s operations without a plan to replace its consumer protections poses risks not only to consumers but also to the administration itself.
