Acting Consumer Financial Protection Bureau director Russell Vought has demanded all bureau staffers to halt investigations, enforcement, rulemaking, research, and public statements in two emails sent Saturday and Monday that were reviewed by WIRED. He also forbade CFPB workers from making court appearances, other than to pause or postpone proceedings.
The move put an abrupt halt to several active lawsuits and investigations against companies accused by the CFPB of defrauding consumers, and the drafting of possible regulations that would oversee the activity of Big Tech companies with financial products such as Apple Pay, Google Pay, and Venmo.
According to resignation emails shared with WIRED, Eric Halperin and Lorelei Salas, the CFPB’s Enforcement Director and Supervision Director, have stepped down from their career posts Tuesday morning and cited Vought’s order as the reason. Vought did not respond to a request to comment on the resignations or the effect of the shutdown.
“The CFPB can’t move those cases forward, so they’re basically on ice at the moment,” a former CFPB staffer tells WIRED, who was granted anonymity over fears of retaliation.
The CFPB began operations in 2011, on the heels of the financial crisis. Its creation was stipulated in the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was passed by Congress the year before. Obama appointed then-professor Elizabeth Warren to help put the agency together. Its mandate, broadly, was to be a watchdog over financial institutions. According to Obama, the CFPD would “crack down on the abusive practices of unscrupulous mortgage lenders, reinforce the new credit card law we passed banning unfair rate hikes, and ensure that folks aren’t unwittingly caught by overdraft fees when they sign up for a checking account.” By December 2024, the agency has relieved debts and repaid defrauded consumers to the tune of more than $19 billion, according to CFPB’s website.
With Donald Trump back in the White House, and Elon Musk’s DOGE pushing a broader agenda to slash spending that could ultimately eliminate entire agencies, the CFPB’s future looks increasingly uncertain. Last Friday, a day after members of DOGE gained access to internal CFPB data, and hours before the homepage of the bureau website began displaying a 404 error message, Musk went on X and posted, “CFPB RIP 🪦.”
In late November, the CFPB took early steps toward regulating “non-bank” financial companies, which could include PayPal, Venmo, Apple Pay, Google Pay, and Zelle. It specifically excluded companies that primarily focus on cryptocurrency, such as Coinbase or Gemini. Despite this, Gemini CEO Tyler Winklevoss and Coinbase CEO Brian Armstrong both celebrated the fact that the CFPB was being kneecapped.
The CFPB passed a rule essentially defining this type of peer-to-peer payment company. The rule didn’t include any actual regulations for these companies, but defining them would be the first step toward doing so in the future. To date, these companies have fallen into somewhat of a regulatory grey zone.
Days after the rule went into effect in January, the bureau was sued by NetChoice and TechNet, two trade groups representing Big Tech. In addition to challenging the rule, the groups accused the CFPB of unlawfully exceeding its mandate, alleging that the rule is a “breathtaking assertion of its own jurisdiction.”
The CFPB’s indefinite pause on writing new rules and regulations could also possibly benefit Elon Musk, whose stated goals include turning X into a so-called “everything app” that would also conduct payments. In January, X CEO Linda Yaccarino announced a partnership with Visa to create a digital wallet that can facilitate peer-to-peer payments.
“First of many big announcements about X Money this year,” she wrote. “[Let’s fucking go.]”
While Musk hasn’t spoken publicly about these specific ambitions in recent months, he has intimated that diminishing or eliminating the CFPB is a personal goal. He hinted at this last November, shortly after clips began circulating on X from the Joe Rogan episode with venture capitalist and fellow PayPal cofounder Marc Andreessen.
On the show, Andreessen says that the CFPB functions to “terrorize finance” and “prevent new competition.” Responding to a clip of this on X, Musk said, “Delete CFPB. There are too many duplicative regulatory agencies.”
Vought’s order to halt all work last week also put an immediate pause on several active lawsuits that were in progress.
On January 14, the CFPB filed a lawsuit for Capital One consumers, alleging that the company deceptively marketed two nearly identically-named savings accounts with vastly different interest rates, which the agency claims resulted in over-charging account-holders $2 billion in interest. A day later, it sued the operator of Cash App for $175 million alleging the company didn’t adequately process a number of customer complaints about unauthorized payments, and claimed that this allowed them to be defrauded out of huge amounts of money.
Back in December, it also filed a lawsuit against Walmart and payments processing tool Branch Messenger. The CFPB alleged that drivers were charged $10 million in fees when they tried to access their paychecks. The same month, the bureau sued the company that runs Zelle—as well as banks JPMorgan Chase, Bank of America, and Wells Fargo—for allegedly failing to implement fraud safeguards, or investigate customers’ fraud complaints.
For now, none of these lawsuits can proceed.
According to the former staffer, these lawsuits usually go to court after one to two years of investigations. These investigations involve processing complaints sent to the CFPB, interviewing corporate executives, and obtaining internal documents through civil investigative demands, which is similar to a subpoena. When successful, the court may order a company to change its practices to comply with the law.
“Bringing these things to a conclusion, to give consumers redress and hold companies accountable with civil money penalties, with sanctions on their executives, all of that is now just paused,” they say.
When CFPB cases conclude, they can result in enforcement actions in which companies have to pay back their consumers. In these cases, the CFPB is also responsible in following up with the company and making sure they hit their deadlines, effectively enforcing the ruling.
The CFPB issued several such enforcement actions in recent months. In November, the bureau settled with mortgage lender and broker Townstone Financial for what it alleged to be “discriminatory lending practices and redlining” against Black communities in Chicago. The company was ordered to pay more than $100,000 back to consumers. A month later, it began to pay out funds secured through a 2023 settlement with credit repair companies CreditRepair.com and Lexington Law for allegedly charging illegal upfront fees to customers. The companies agreed to pay $1.8 billion in payments back to consumers.
The former CFPB staffer added that there are “plenty of other investigations” that haven’t gone to court yet, which are still confidential because they were still underway.
There is also the day-to-day work of responding to consumers. The CFPB manages a Consumer Complaint Database, which consists of complaints that people submit either online, or via phone to a CFPB agent. After the complaint is uploaded to the database, the CFPB automatically sends it to the company involved. To date, more than 7.7 million complaints have been logged in the database.
“There are a lot of consumers on a day-to-day basis who get immediate action and attention and redress to their problems just through that database process,” the former staffer tells WIRED. “It’s not totally clear whether any of that work is also impacted.”
The CFPB has continued to update the database with complaints through Sunday February 9, and to send these complaints to companies. It’s unclear if any employees can respond to bugs in the database if they emerge, since Vought ordered employees on Saturday to stop all “supervision and examination activity.” Also, despite a recent Trump executive order demanding that all federal employees work in-person five days per week, employees have also been locked out of entering CFPB’s federal office and told to work remotely the week of February 10.
A former staffer told WIRED that without a functional CFPB, one of the few remaining options for defrauded consumers might be to go through companies directly. As anyone whose contacted customer service knows, this strategy often results in a dead end.
“I fear that that maybe some of this—maybe even just the confusion about what employees can or can’t do—is also either stopping, or at the very least slowing down, that blocking and tackling day-to-day work that the Bureau does, that a lot of people don’t see because it happens behind the scenes,” the former CFPB staffer says.