Special Report: Russel Vought, Project 2025, and the Death Knell of the Little CFPB Engine that Could Fight Goliath and Win But Couldn't Survive an Email

Detailed Examination of the Project 2025 plans for the CFPB. Are Russel Vought's Complaints and Actions Justified? Or is a Tiny Consumer Watchdog an Early Victim in a Strategic Coup?

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This is a detailed examination of the Project 2025 plans for the CFPB. In it I am seeking to answer the questions:

• Are Russel Vought's Complaints and Actions Justified?

• Who Benefits from Dismantling the CFPB?

• Is a Tiny Consumer Watchdog an Early Victim in a Strategic Coup?

I’ll present the facts and cite my sources. You decide. Are we witnessing a mighty victory or a terrible defeat?

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Current Situation at the CFPB

Russel Vought was confirmed as the director of the Office of Management and Budget on Thursday, February 6th, 2025. He was then named acting director of CFPB.

On Friday, February 7th, Elon Musk and his DOGE team setup shop inside the CFPB.

On Saturday, February 8th, 2025, Vought ordered all employees of the Consumer Financial Protection Bureau to cease “all supervision and examination activity” and “all stakeholder engagement” effective immediately.

On, February 11th, 2025, Jonathan McKernan was nominated as Director of CFPB. He is likely to be approved by the Senate.

So the first question is, Why did Russel Vought effectively abolish the CFPB almost immediately after being confirmed as the head of the director of the Office of Management and Budget?

Russel Vought’s Project 2025 Plans for the CFPB

Chapter 27 of the "Mandate for Leadership: The Conservative Promise" by Project 2025, the section starting on page 9 provides a detailed critique of the Consumer Financial Protection Bureau (CFPB) and outlines specific recommendations for its reform or dissolution.

Critique of the CFPB:

• Unaccountability & Leadership Structure: The CFPB is described as a "highly politicized, damaging, and utterly unaccountable federal agency." The single-director leadership model of the CFPB is criticized for concentrating power and lacking accountability.

• Constitutional Concerns: The document argues that the CFPB operates outside the traditional checks and balances of the federal government, raising constitutional issues.

• Funding Mechanism: The CFPB's funding, which comes from the Federal Reserve rather than congressional appropriations, is highlighted as a significant concern, as it limits congressional oversight.

• Regulatory Overreach: The CFPB is accused of imposing burdensome regulations that may stifle innovation and limit consumer choice.

Recommendations:

1. Abolition of the CFPB: The primary recommendation is for Congress to abolish the CFPB and transfer its consumer protection functions to existing banking regulators and the Federal Trade Commission (FTC).

2. Interim Reforms: Until abolition can be achieved, the document suggests several interim measures:

   • Redirect Civil Penalty Funds: Ensure that unused civil penalty funds are directed to the Department of the Treasury to prevent potential misuse.

   • Repeal Specific Dodd–Frank Act Sections: Target sections that impose burdensome requirements on financial institutions.

   • Enforcement Based on Rulemakings: Mandate that enforcement actions be based on rulemakings that comply with the Administrative Procedure Act.

   • Choice of Adjudication Venue: Allow respondents in administrative actions the choice between adjudication in an administrative law court or a federal court.

   • Clarify Definitions: Define terms like "deceptive, unfair, and abusive" practices more precisely to limit regulatory overreach.

These proposals reflect a broader strategy to restructure financial regulatory agencies, aiming to enhance accountability, reduce regulatory burdens, and ensure that consumer protection is balanced with the need for financial innovation and economic growth.

Who Benefits from Dismantling the CFPB?

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