Status of the CFPB in 2025 under Acting Director Russell Vought: Will Federal Consumer Financial Protection Litigation Be Impacted under the Trump Administration?

Posted on May 7, 2025, by Starlett Massey

For years, private attorneys have enforced the Federal consumer financial protection laws on behalf of individual Americans.  These lawsuits typically have prevailing party attorneys’ fee provisions and many such lawsuits are brought on behalf of individual consumers by attorneys working on a contingency fee basis.  This private enforcement mechanism has protected numerous consumers who have fallen victim to predatory lending schemes, illegal debt enforcement tactics, and myriad deceptive lending practices.  If not only the Consumer Financial Protection Bureau (CFPB), but the laws and regulations it promulgates and enforces, are both sought to be eliminated by the current administration, all such private enforcement actions may be in jeopardy.

Brief History of the CFPB

Before the 2008 mortgage crisis, law professor and Senator Elizabeth Warren came up with the idea of an independent federal agency to oversee consumer financial products and services. Put another way, Senator Warren envisioned an agency dedicated to stopping scams and holding financial firms accountable when they cheat and harass people.  This was the genesis for the CFPB.  The CFPB opened in 2011 in response to the 2008 mortgage crisis[1].  In 2008, financial institutions across the country failed and millions of Americans lost their jobs, millions of Americans lost their homes to foreclosure, and millions of Americans lost their savings in the stock market crash.  President Barack Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) into law, thereby creating the CFPB.  The CFPB opened its doors in 2011 and as of January 30, 2025, has returned $19.7 billion[2] to consumers cheated by financial companies. Significant successes by the CFPB include:

• 2013: The CFPB required U.S. Bank and its partner Dealer Financial Services to refund $6.5 million to servicemembers cheated on auto loans;[3]
• 2014: The CFPB secured $92 million for about 17,000 servicemembers and others harmed by Rome Finance’s predatory lending scheme;[4]
• 2015: The CFPB secured $480 million in debt relief for students and alumni of Corinthian College who were harmed by Corinthian’s predatory lending scheme involving fraudulent student loans and illegal debt collection tactics;[5]
• 2016: The CFPB required Navy Federal Credit Union to pay $23 million to consumers and a $5.5 million penalty for making false debt collection threats to active servicemembers and retired veterans;[6]
• 2022: The CFPB ordered Wells Fargo to pay $3.7 billion for widespread mismanagement of auto loans, mortgages, and deposit accounts, returning more than $2 billion to its customers and collecting a $1.7 billion civil penalty;[7]

In addition to its enforcement actions, the CFPB is authorized by the Dodd-Frank Act to “administer, enforce, and otherwise implement the provisions of Federal consumer financial law.”[8]  In fact, the CFPB has “the exclusive authority to prescribe rules” subject to Federal consumer financial law. [9] The CFPB enforces and promulgates rules under several laws related to consumer financial protection, including the Consumer Financial Protection Act (CFPA), and regulations such as Regulation Z (Truth in Lending – TILA).  The CFPB enforces laws like the Equal Credit Opportunity Act (ECOA), Fair Credit Reporting Act (FRCA), Fair Debt Collections Practices Act (FDCPA), Real Estate Settlement Procedures Act (RESPA), Electronic Funds Transfer Act (EFT Act), Home Mortgage Disclosure Act (HMDA), S.A.F.E. Mortgage Licensing Act, Truth in Savings Act, Interstate Land Sales Full Disclosure Act, Military Lending Act, Home Ownership and Equity Protection Act, and the Consumer Leasing Act.[10]

The current administration proposes to end the CFPB

On February 7, 2025, President Trump designated Russell Vought, the director of the Office of Management and Budget (OMB) the Acting Director of the CFPB.  That evening, Elon Musk posted on X “RIP CFPB.” On February 8, 2025, Russell Vought stated “The CFPB has been a woke and weaponized agency against disfavored industries and individuals for a long time.  This must end.” On Monday, February 10, Vought temporarily put a halt to effectively all of the agency’s work.[11]  That day, President Trump wrote, “That was a very important thing to get rid of.”[12]

On March 28, 2025, Judge Amy Berman Jackson issued a 112-page opinion and 3-page order in National Treasury Employees Union, et al. v. Russell Vought, in his official capacity as Acting Director of the Consumer Financial Protection Bureau, et al, Civil Action No. 25-0381 (D.D.C.)  Judge Jackson’s ruling included a preliminary injunction that enjoined the defendants from continuing to dismantle the CFPB without Congressional authorization to do so.[13]  While this Order reinstates CFPB employees who had been terminated and protects those who were on the cusp of being terminated, it does not require the CFPB to continue to function as before Vought’s designation.  As of April 1, 2025, the CFPB has not yet resumed its examinations of the financial institutions it is statutorily required to supervise.[14]  The Order also does not prohibit the CFPB from continuing to voluntarily dismiss enforcement lawsuits or ceasing enforcement investigations.[15]  It does not prohibit the CFPB from seeking to void prior consent orders imposing civil penalties for violations of the Federal consumer financial laws.  It does not preclude the CFPB from taking otherwise lawful steps to invalidate final regulations or other written guidance issued by the CFPB.

The following day, on March 29, 2025, the CFPB filed its Notice of Appeal of Preliminary Injunction in National Treasury Employees Union, et al. v. Russell Vought, in his official capacity as Acting Director of the Consumer Financial Protection Bureau, et al, Civil Action No. 25-0381 (D.D.C.).  It will likely take months before the CFPB’s appeal will be resolved.

Does the CFPB’s lawmaking authority extend to deregulation of consumer financial protection laws?

As legal scholars have pointed out, the current administration has yet more weapons in its arsenal to end the CFPB, which may be accomplished even though Congressional approval is generally required.[16]  As explained in a February 21, 2025 Alert published by Covington & Burlington LLP[17], the Congressional Review Act (CRA) permits Congress to “disapprove” of agency rules within certain time frames triggered by the date the agency provides Congress a report on the rule.  This means that Congress could nullify any CFPB rules submitted to the House and Senate after August 16, 2024.[18]  When Congress disapproves of a rule under the CRA, the rule is “treated as though [it] had never taken effect,” and the relevant agency is prohibited from promulgating a rule that is “substantially the same as” the disapproved rule without express Congressional authorization.[19]

The CFPB can rescind a rule by initiating a new notice-and-comment rulemaking process.[20]  However, the courts have authority to review and set aside any agency action that is found to be “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”[21]  While the judiciary branch’s scope of review offers legal protections and oversight over any attempts by the CFPB to unilaterally rescind Federal consumer financial protection laws, the judicial process is inherently rife with delay.  To the extent these laws are rescinded unlawfully, Americans cannot assume that these protections will immediately be upheld or restored.

The CFPB may, in certain instances, take steps that result in the de facto nullification of a finalized rule (that would otherwise be intact) by opting not to enforce the rule.  However, there are certain cases in which de facto nullification may be impracticable or even unlawful.[22]

Significantly, private practitioners and financial consumers should be aware that the laws governing consumer financial transactions and a citizen’s right to seek the protections provided by federal consumer financial protection laws may be – at least temporarily – in jeopardy.  Similar to the new administration’s arguably unlawful efforts to entirely dismantle the CFPB, its anticipated efforts to wipe out the last 14 years of Federal consumer financial protection laws, whether ultimately found to be lawful or not, will likely create havoc and delay for consumer plaintiffs seeking legal protection from financial fraud and abuse.

Will the CFPB ultimately be dismantled?

As the Covington alert explains, although not yet attempted, the administration could use the Budget Reconciliation Bill to subject the CFPB to Congressional appropriations.  Such a bill would require only a majority vote in the House and Senate.[23]  Similarly, the administration could raise the argument that the funds the CFPB has received from the Federal Reserve Board since September 2022 may have been unlawfully obtained.  This is because the Dodd-Frank Act requires that the CFPB may be funded only from “combined earnings of the Federal Reserve Banks.”  There have been no “combined earnings” since September 2022 and experts anticipate this situation is likely to continue.  If the administration can convince a court and ultimately the Supreme Court that the CFPB has been and is unlawfully funded, Congress may be forced to approve CFPB reform and/or dismantling.

This information is accurate as of the date of this publication; however, certain governmental actions may change the accuracy of this information in the future. Please consult with an attorney to understand your legal rights and obligations under Federal consumer financial protection laws.

[1] https://www.consumerfinance.gov/data-research/research-reports/building-the-cfpb/

[2] https://www.consumerfinance.gov/enforcement/enforcement-by-the-numbers/ dated April 23, 2025

[3] CFPB, CFPB Orders Auto Lenders to Refund Approximately $6.5 Million to Servicemembers (Jun. 27, 2013), https://www.consumerfinance.gov/about-us/newsroom/cfpb-orders-auto-lenders-to-refund-approximately-6-5-million-to-servicemembers/

[4] CFPB, CFPB and 13 State Attorneys General Obtain About $92 Million in Debt Relief for Servicemembers Harmed by Predatory Lending Scheme (Jul. 29, 2014), https://www.consumerfinance.gov/about-us/newsroom/cfpb-and-13-state-attorneys-general-obtain-about-92-million-in-debt-relief-for-servicemembers-harmed-by-predatory-lending-scheme/

[5] CFPB, CFPB Secures $480 Million in Debt Relief for Current and Former Corinthian Students (Feb. 3, 2015), https://www.consumerfinance.gov/about-us/newsroom/cfpb-secures-480-million-in-debt-relief-for-current-and-former-corinthian-students/

[6] Sarah N. Lynch, Reuters, U.S. Navy Federal Credit Union to Pay $28.5 million over debt collection issues (Oct. 11, 2016), https://www.reuters.com/article/us-usa-cfpb-navy-federal-credit-union-idUSKCN12B27B/

[7] CFPB, CFPB Orders Wells Fargo to Pay $3.7 Billion for Widespread Mismanagement of Auto Loans, Mortgages, and Deposit Accounts (Dec. 20, 2022), https://www.consumerfinance.gov/about-us/newsroom/cfpb-orders-wells-fargo-to-pay-37-billion-for-widespread-mismanagement-of-auto-loans-mortgages-and-deposit-accounts/

[8] 12 U.S.C. § 5512(a).

[9] 12 U.S.C. § 5512(b)(4)(A).

[10] CFPB, What laws does the CFPB enforce? (Dec. 15, 2021) https://www.consumerfinance.gov/ask-cfpb/what-laws-does-the-cfpb-enforce-en-2121/

[11] Ballard Spahr LLP, Consumer Finance Monitor, Vought halts most work at CFPB (Feb. 10, 2025),  https://www.consumerfinancemonitor.com/2025/02/10/vought-halts-most-work-at-cfpb/

[12] Memorandum Opinion, National Treasury Employees Union, et al.. v. Russell Vought, Civil Action No. 25-0381 (ABJ) (U.S. D.C. D.C. March 28, 2025).

[13] Ballard Spahr LLP, Consumer Finance Monitor, A deep dive into Judge Jackson’s preliminary injunction order against CFPB Acting Director Vought (April 1, 2025) https://www.consumerfinancemonitor.com/2025/04/01/a-deep-dive-into-judge-jacksons-preliminary-injunction-order-against-cfpb-acting-director-vought/

[14] Ballard Spahr LLP, Consumer Finance Monitor, A deep dive into Judge Jackson’s preliminary injunction order against CFPB Acting Director Vought (April 1, 2025)https://www.consumerfinancemonitor.com/2025/04/01/a-deep-dive-into-judge-jacksons-preliminary-injunction-order-against-cfpb-acting-director-vought/

[15] Ballard Spahr LLP, Consumer Finance Monitor, A deep dive into Judge Jackson’s preliminary injunction order against CFPB Acting Director Vought (April 1, 2025)https://www.consumerfinancemonitor.com/2025/04/01/a-deep-dive-into-judge-jacksons-preliminary-injunction-order-against-cfpb-acting-director-vought/

[16] Covington, CFPB Rules Under Trump 2.0 – Pathways to Nullification (Feb. 21, 2025), https://www.cov.com/en/news-and-insights/insights/2025/02/cfpb-rules-under-trump-2-0-pathways-to-nullification

[17] Covington, CFPB Rules Under Trump 2.0 – Pathways to Nullification (Feb. 21, 2025), https://www.cov.com/en/news-and-insights/insights/2025/02/cfpb-rules-under-trump-2-0-pathways-to-nullification

[18] Kevin Bodargus, The Date is in for Biden Rules Vulnerable to Trump Purge (Jan. 10, 2025), https://www.eenews.net/articles/the-date-is-in-for-biden-rules-vulnerable-to-trump-purge/

[19] Covington, CFPB Rules Under Trump 2.0 – Pathways to Nullification (Feb. 21, 2025), https://www.cov.com/en/news-and-insights/insights/2025/02/cfpb-rules-under-trump-2-0-pathways-to-nullification (internal citations omitted); 5 U.S.C. § 801(b)(2).

[20] CFPB, Rules and policy, https://www.consumerfinance.gov/rules-policy/; Covington, CFPB Rules Under Trump 2.0 – Pathways to Nullification (Feb. 21, 2025), https://www.cov.com/en/news-and-insights/insights/2025/02/cfpb-rules-under-trump-2-0-pathways-to-nullification.

[21] 5 U.S.C. § 706(2).

[22] Covington, CFPB Rules Under Trump 2.0 – Pathways to Nullification (Feb. 21, 2025), https://www.cov.com/en/news-and-insights/insights/2025/02/cfpb-rules-under-trump-2-0-pathways-to-nullification.

[23] Covington, CFPB Rules Under Trump 2.0 – Pathways to Nullification (Feb. 21, 2025), https://www.cov.com/en/news-and-insights/insights/2025/02/cfpb-rules-under-trump-2-0-pathways-to-nullification.