CFPB On “Life Support” One Year After It Was Targeted For Shutdown

What the phrase refers to

Consumer Reports says the CFPB “may still be standing, but it’s essentially on life support,” pointing to a drastic narrowing of its priorities, dropped enforcement cases, slashed funding, and abandoned regulatory guidance.
The piece frames this as leaving consumers more vulnerable to fraud, scams, and abusive financial practices because the “financial cop on the beat” has been largely taken off the field.

In February 2025, the CFPB’s acting director Russell Vought ordered staff to “stop all work,” halt supervision and examinations, and cease stakeholder engagement, and the headquarters was closed.
Many enforcement actions were dropped, including major cases involving Capital One (alleged $2 billion in lost interest for savers), fraud on Zelle, and a $95 million overdraft-fee settlement with Navy Federal Credit Union, which together could have returned over $3 billion to consumers.
The Trump administration simultaneously moved to effectively shut the agency down through mass staff suspensions or attempted firings and by refusing to request new funding, prompting lawsuits from employees and nonprofit groups.

Funding was deliberately starved: CFPB leadership refused to request regular quarterly funding from the Federal Reserve in 2025, aiming to exhaust reserves by early 2026, and argued the Fed’s losses made its funding structure unlawful.
A federal court in December 2025 rejected that argument, ordered that funding be sought, and Vought then requested $145 million in January 2026—enough only to keep the agency open through roughly March 2026 while litigation over its attempted closure continues.
Congress also passed a budget measure that effectively cut in half the maximum funding the CFPB can draw from the Fed, further constraining its capacity even if it remains formally open.
With many staff on administrative leave, enforcement and supervision mostly halted, and its future dependent on ongoing court cases and limited interim funding, advocates argue the CFPB exists in name but not in function—hence “life support.”

February 2026 marks one year since the stop‑work order and the broader “hostile takeover” of the CFPB, which advocacy groups say transformed it from an active watchdog into a hollow shell.
Consumer and worker groups are using the anniversary to pressure courts and Congress to preserve and restore the agency, warning that without a functioning CFPB, abusive lending, junk fees, and payment fraud will proliferate with fewer consequences for financial firms.