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Russell Vought, recently appointed by President Donald Trump as the head of the U.S. Consumer Financial Protection Bureau (CFPB), has taken significant steps to limit the agency’s oversight capabilities. In a memo circulated on Saturday evening, Vought directed staff to halt all supervisory activities concerning the companies under the agency’s jurisdiction.
In addition, Vought announced via Elon Musk’s social media platform, X, that the CFPB’s funding for the upcoming fiscal quarter would be entirely cut, asserting that the agency’s existing balance of over $700 million was adequate to sustain operations.
The Office of Management and Budget, overseen by Vought, has not publicly responded to inquiries regarding these developments, nor has the CFPB itself, which Vought has instructed to suspend all external communications.
Vought’s directive went beyond a previous order from Treasury Secretary Scott Bessent, who had taken temporary charge after Rohit Chopra’s dismissal. The memo explicitly instructed staff to “cease all supervision and examination activity,” raising concerns about the absence of federal oversight in financial consumer protections.
The CFPB was established by Congress following the 2008 financial crisis to monitor financial institutions such as banks, mortgage lenders, and money transfer services, focusing on safeguarding consumers from unfair and deceptive practices. With Vought’s recent orders, many of these essential supervisory functions are left unmonitored by the federal government.
These actions reflect a broader initiative by Trump and Musk to reshape governmental frameworks, which has ignited protests among agency employees and condemnation from leading Democratic figures in Congress.
Musk, whose company X is exploring opportunities in the consumer finance sector, has expressed intentions to dismantle the CFPB. His government efficiency team has reportedly been granted access to the agency’s information technology systems, raising alarms among union representatives regarding potential overreach.
Dennis Kelleher, the head of Better Markets, an organization advocating for stringent financial oversight, criticized Trump for undermining protections for consumers, particularly those from the diverse working-class base that supported his election. Kelleher referred to this latest move against the consumer bureau as a betrayal of those dependent on essential financial services.
(This report has been updated to clarify estimates regarding funding in the second paragraph.)
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www.yahoo.com