Regulatory supervision of credit unions and banks has stopped at the CFPB.
The Washington, D.C. offices have been locked. CFPB employees have been told “not to perform any work tasks this week,” according to an internal email. The situation playing out at the CFPB is one that similarly reflects the shutdown of the USAID offices and programs.
The “shock and awe” approach, as the Trump Administration has put it, of its first weeks in office has left credit union leaders asking a lot of questions with no real answers. And now they’ve said they are “on high alert” Monday after the CFPB’s new Acting Director Russell Vought has effectively shut down the Bureau.
As of Monday evening, the CFPB’s homepage displayed “404 Page not found” with an image showing a plug pulled out of the socket.
During calls with the media Monday, officials with the Defense Credit Union Council (DCUC) and America’s Credit Unions (AmCU) wondered how these unprecedented moves by the Trump Administration will play out for credit unions.
“We want to make sure that our credit unions operate in as clean and clear of a regulatory environment as possible without some of the CFPB regulations that are in place,” DCUC Chief Advocacy Officer Jason Stverak said.
“Certainly there is a lot up in the air relative to the CFPB,” AmCU Chief Advocacy Officer Carrie Hunt said. “Of note, of course, is that Dodd-Frank is still in effect and all of the consumer laws that credit unions have to comply with and follow are in effect. And even though the CFPB is pausing supervision examinations, that does not mean that credit unions don’t have to comply with consumer laws.”
Hunt added, “Having this much uncertainty in the regulatory arena is certainly of concern to us here at America’s Credit Unions because clearly our members need to know the rules of the road as to how we are going to operate moving forward.”
CFPB Acting Director Vought, who is also the director of the Office of Management and Budget (OMB), took over for Acting Director and Treasury Secretary Scott Bessent late Friday.
It’s been widely known and reported that Vought is the “architect” of the right-wing policy plan called Project 2025. Part of that plan calls for reducing or merging different regulators into one entity, if not removing specific agencies completely. This raises concerns with credit union officials that the likelihood of the NCUA merging into the FDIC could potentially happen.
Hunt addressed that during Monday’s press briefing.
“I did want to flag that of course a lot of what has been occurring in the regulatory space since President Trump took office is some of the principles that are contained in Project 2025,” Hunt said. “OMB Director Russ Vought is one of the main architects of that plan and one of those, I guess you could call it suggestions, discussions, was the combination of financial regulators. America’s Credit Unions certainly is on high alert because we do support an independent regulator for credit unions in the NCUA. I know there’s certainly been plenty of times where we have disagreed with our regulator and in particular we’ve had concerns over the budget, but we do think that credit unions need their interests protected. So certainly as this regulatory space that we’re in continues to evolve, we are actively working to make sure that the credit union difference is maintained and certainly it is impossible to sit here today and predict exactly what things will look like in a couple of weeks or a couple of months. But it is incredibly challenging right now to try to make sure that everyone knows the rules of the road.”
Stverak and Hunt both acknowledged their concerns over the shuttering of the CFPB and the regulatory uncertainty it is causing credit unions.
Stverak said he is worried what removing the CFPB from the regulatory landscape could mean as far as its “impact on the rules that that have been promulgated by it and passed and put into place. Are they then done away with? I know this is kind of like how many angels can dance on the head of a pin, and we need lawyers in on this. But if those are done away, within how many years are you rolling back financial regulation that credit unions and all financial institutions have depended upon to serve their members and customers? And if they’re done away with, then we have the states start to step in and fill that void.”
Hunt characterized it this way: “It’s not good for operations. It’s having no rules of the road and not understanding what the rule of law either is or giving force to the rule of law creates so much uncertainty that I think ultimately it will lead to paralyzation or in the alternative if a new administration were to come in then we have the potential for retroactive enforcement actions against institutions for things. So, having certainty is incredibly important and it’s important of course for our financial markets. It’s important for our financial institutions to understand what they need to do on a daily basis. And it is important too for I think consumer confidence.”
Elon Musk’s Department of Government Efficiency gained access of the CFPB’s IT systems over the weekend. On Friday Musk posted on X, which he owns, “CFPB RIP”.
On Feb. 3, the Washington, D.C. offices of USAID were locked to employees and employees were told to stop working, similar to the actions Monday at the CFPB.
USAID has been effectively shut down even as lawsuits concerning its funding make their way through the courts.