Trump Admin Is Legally Required To Shut Down The CFPB: The decision marks a turning point for the administrative state and the end of an era for self-funding, self-governing agencies; Trump Picks New CFPB Director Amid Efforts to Close Agency

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Trump Admin Is Legally Required To Shut Down The CFPB:

By any honest reading of the Constitution, the Consumer Financial Protection Bureau (CFPB) should never have existed. Born from Dodd-Frank in the panicked and progressive aftermath of 2008, the CFPB was designed to evade two levers of government authority: Congress’s power of the purse and the president’s duty of executing the law. Its novel, insulated structure made it part of the “fourth branch” of government in all but name, an unaccountable bureaucracy levying billions in regulatory costs without ever facing the taxpayers it claims to protect.

That experiment has now reached its end. CFPB Acting Director Russell Vought plans to shut down the agency, and the Justice Department has bolstered that decision, confirming that the Federal Reserve has no “combined earnings” from which to transfer funds to the Bureau. Under 12 U.S.C. § 5497, the CFPB may only draw money from the Fed’s “combined earnings,” meaning profits. The Fed has posted operating losses since 2022, and by statute, no profits mean no funding. For years, the Bureau drew hundreds of millions of dollars despite that clear prohibition. The Trump administration is right to say enough is enough.

Critics, like Sen. Elizabeth Warren, call this a political attack. In truth, it is a return to the rule of law. The CFPB’s design was a legal conundrum — an “independent” agency housed within the Federal Reserve but answerable to neither Congress nor the president. As the Center for Renewing America has detailed, this structure turned the Bureau into a self-financing enforcement cartel, duplicating the work of the Federal Reserve, FDIC, OCC, DOJ, and FTC, while pursuing political causes under the guise of consumer protection. The Bureau’s record of ideological overreach from pressuring banks to debanking disfavored industries under “Operation Choke Point” to funding activist groups with penalty funds, shows exactly why the framers placed the power of the purse in Congress’s hands.

Acting Director Vought’s decision to request zero dollars from the Fed earlier this year for the Bureau was not politics but common sense. With over $711 million sitting idle in its account, the agency had more than enough to wind down operations responsibly. Now, as those reserves run out, the law requires accountability through appropriations. When an agency cannot lawfully pay its own bills, it cannot lawfully regulate the lives of others.

Some may insist that shuttering the CFPB will unleash chaos in the financial markets. But the truth is simpler. Every function the Bureau performs from enforcing fair lending to supervising credit unions already exists elsewhere in government or at the state level. The CFPB’s running out of funds is not an act of neglect but of proper stewardship. It can restore coherence to financial regulation and prevent further weaponization of bureaucratic power against citizens and businesses --->READ MORE HERE.

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Trump picks new CFPB director amid efforts to close agency:

The nomination of Stuart Levenbach was a "technical" maneuver intended to extend White House budget director Russ Vought's oversight of the agency.

President Donald Trump has nominated a top aide to White House budget director Russ Vought to be the permanent head of the Consumer Financial Protection Bureau, a move designed to empower Vought to continue leading the agency as he moves to shut it down in the coming months.

Trump formally nominated Stuart Levenbach, a senior Office of Management and Budget official overseeing natural resources and energy issues, to serve as the permanent CFPB director on Tuesday, according to congressional records.

A CFPB spokesperson said the nomination was a “technical” maneuver intended to extend Vought’s ability to continue serving as the acting director of the agency without needing Senate confirmation.

His ability to serve as the acting CFPB head was set to expire in December under the Vacancies Act, which typically limits such acting appointments to 210 days but extends that period if the president nominates another person for the job.

Vought, who has served as the acting CFPB director since February, has moved to freeze large swaths of the agency’s operations and terminate roughly 90 percent of its staff. In court filings last week, the Trump administration said the CFPB was on track to run out of money to operate at the beginning of next year and argued that it was legally prohibited from seeking an infusion of funding from the Federal Reserve, which is the bureau’s primary source of funding.

It’s not clear if the Senate Banking Committee will move to process Levenbach’s nomination or hold a hearing. A spokesperson for Chair Tim Scott (R-S.C.) did not immediately return a request for comment. --->READ MORE HERE

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