Russell Vought, the recently confirmed head of the US Office of Management and Budget and director of the Consumer Financial Protection Bureau (CFPB), has ordered staff from the latter agency to "cease all supervision and examination activity," effectively freezing the agency’s regulatory oversight, according to the Wall Street Journal.
The move comes amid growing Republican opposition to the financial watchdog, On Friday, Musk posted “CFPB RIP” on X alongside a tombstone emoji, signaling support for dismantling the agency that protects consumers from bad actors in the banking sector.
Vought also announced that he had notified the Federal Reserve that the CFPB would not be taking its next draw of funding, further limiting its operations.
The directive is expected to pull hundreds of CFPB examiners off their assignments, significantly weakening the agency’s ability to oversee financial institutions.
The CFPB was established in 2011 after the 2007-2008 financial crisis to protect consumers from financial abuses. The CFPB drafts and implements regulations for financial institutions, inspects both banking and non-banking financial entities, observes and reports on market trends, and gathers and monitors consumer grievances.
The US Senate on Thursday confirmed Vought as OMB director, the entity at the center of a contentious effort to freeze federal funding for aid programs.
He was approved by a vote of 53-47 over strong opposition from Democrats, including Minority Leader Chuck Schumer, who termed him "one of the most fringe and hard-right individuals the Senate has seen in a very long time."
Vought held the same position during President Donald Trump's first administration, during which he issued a memo barring the use of taxpayer funds for anti-racism training — a move the US president has doubled down on during his second term.
OMB quickly issued a terse notification saying the freezing of aid order had been "rescinded," but White House Press Secretary Karoline Leavitt announced soon afterward that it remained in place — and only the memo from the budget office was taken back.
He will take office again amid a nationwide uproar over an OMB order issued last week that halted trillions of dollars in federal loans, grants and other assistance.
A US district judge blocked the spending freeze last week, then extended that measure on Monday, saying plaintiffs who brought the case had shown they would suffer "irreparable harm" if it takes effect.
Democrats have accused Trump of constitutional overreach by seeking to stop government spending already approved by Congress, which has authority over the US budget.