YEREVAN (CoinChapter.com) — Russell Vought, appointed by Donald Trump as acting head of the Consumer Financial Protection Bureau (CFPB), has stopped the agency’s funding and suspended oversight activities. In a Feb. 9 post on X, Vought announced that the CFPB would not request new funds from the Federal Reserve, citing that the agency’s current balance of $711.6 million is sufficient.
He stated that the next draw of unappropriated funding was not “reasonably necessary” for the bureau’s operations. His decision affects the agency’s ability to regulate banks, lenders, and money transfer firms, which fall under its jurisdiction. The CFPB, which was created to enforce consumer protection laws, will now operate without additional financial resources.
CFPB’s Role in Crypto and Financial Regulation
The CFPB enforces regulations on financial institutions, including banks, mortgage lenders, and credit card providers. It also handles complaints about U.S.-based crypto exchanges. In 2023, the agency proposed supervising crypto wallet providers, but later reversed the decision following industry opposition.
Despite the rollback, tech trade groups filed a lawsuit against the CFPB in January, claiming that its rulemaking process exceeded legal limits. The agency’s involvement in crypto regulations has been a point of contention, with critics arguing that it has attempted to expand its authority beyond its mandate.
CFPB Staff Ordered to Stop Investigations and Work Remotely
Reports from Reuters and Politico on Feb. 9 revealed that Vought issued a memo to CFPB employees, instructing them to stop all supervision and examination activities. He directed staff to suspend ongoing investigations and refrain from opening new enforcement cases. The memo also prohibited the issuance of new rules, guidance, or public statements.
Following these directives, staff members were informed that the CFPB office would remain closed for the week, requiring them to work remotely. The agency’s regulatory functions have been placed on hold, raising concerns about its ability to carry out enforcement actions.
CFPB’s Funding Model and Budget Control
Unlike most federal agencies, the CFPB does not rely on congressional appropriations. Instead, it requests funding directly from the Federal Reserve. Critics have long argued that this funding model lacks accountability, as it allows the agency to operate independently of Congress.
Russell Vought, who also leads the White House’s Office of Management and Budget (OMB), played a key role in Project 2025, a policy initiative focused on restructuring government agencies. He was appointed as CFPB’s acting director on Feb. 7, replacing Treasury Secretary Scott Bessent.
Reactions to CFPB’s Funding Freeze
Financial regulation groups responded to the decision, raising concerns about the impact on consumer protections. Dennis Kelleher, co-founder of Better Markets, described the move as a direct challenge to the bureau’s mission. He stated that this decision would negatively affect Americans who rely on financial regulations to protect them from unfair practices.
In his Feb. 9 statement, Kelleher said the action was a significant setback for consumers. He criticized the suspension of regulatory activities, arguing that it would leave financial institutions unchecked.
