Over the weekend, the Consumer Financial Protection Bureau’s (CFPB) operations were unexpectedly suspended. This followed DOGE lead Elon Musk’s apparent call for the agency’s dissolution in an X post on Saturday, where he wrote “CFPB RIP.” The decision is expected to benefit financial firms facing ongoing enforcement actions.
What Happened: Shortly after Musk’s post, the CFPB’s acting director, Russell Vought, who also recently became the Director of the United States Office of Management and Budget, took action.
Vought halted all pending CFPB investigations and supervisory activities. He then informed the Federal Reserve that the CFPB would not be requesting its next round of funding, citing the agency’s current $711.6 million balance as “excessive in the current fiscal environment.”
Companies With Recent Enforcement Actions By CFPB
According to the CFPB website, it took recent actions on some listed companies like Equifax Inc. EFX, Honda Motor Co. HMC, Block Inc. XYZ, and others.
- The Bureau, in a release dated Jan. 17, said that Equifax violated the Fair Credit Reporting Act and Honda Motor’s American Honda Finance Corporation furnished inaccurate consumer reporting information. In a release dated Jan. 16, CFPB issued an order against Jack Dorsey’s Block for failing to provide effective customer service for Cash App, citing the failure to provide live telephone agents.
- Capital One Financial Corp. COF: The Bureau alleged that the firm’s representations for its 360 Savings account were false or misleading for a period ranging from December 2020 to at least August 2024.
- Walmart Inc. WMT: CFPB alleged that Walmart and Branch Messenger Inc. engaged in unfair, abusive, and deceptive practices by requiring Walmart Spark drivers to use Branch accounts for payment, often without consent, and misrepresenting the Branch account’s features.
- Rocket Companies Inc. RKT: The company allegedly violated the Real Estate Settlement Procedures Act by giving things of value to real estate brokerages, including referrals, in exchange for referrals of real estate settlement business to Rocket Mortgage and Amrock.
- The Bureau also filed a lawsuit on Dec. 20, 2024, against Early Warning Services LLC., Bank of America Corp. BAC, JPMorgan Chase & Co. JPM, and Wells Fargo & Co. WFC, alleging their failure to adequately protect the Zelle network from fraud and other vulnerabilities, leading to consumer losses totaling hundreds of millions of dollars.
Why It Matters: Tesla Inc‘s TSLA CEO, Musk, who is charged with cutting wasteful federal spending via the Department of Government Efficiency, in an X post dated Nov. 27, 2024 had said, “Delete CFPB. There are too many duplicative regulatory agencies.”
The co-founder and CEO of Coinbase Global Inc. COIN Brian Armstrong supported Musk and said “CFPB is unconstitutional” and the U.S. already has Department of Justice to prosecute fraud.
However, Sen. Chris Van Hollen (D-Md.) in an X post said “The CFPB is protected by law and we will fight to ensure it can continue to fight for consumers.”
Also, Eric Feigl-Ding, the chairman of the Department of Public Health at New England Complex Systems Institute said that CFPB was “murdered by the richest man on Earth and his oligarchs.”
In December 2024, financial industry groups, including American Credit Unions, the Consumer Bankers Association, the American Bankers Association, and the Mississippi Bankers Association filed a joint lawsuit against the CFPB over its new rule capping overdraft fees. The CFPB estimated the cap will save consumers up to $5 billion annually, or $225 per household.
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