Is Russ Vought Trying To Bankrupt The CFPB?

Russ Vought, serving as acting director of the Consumer Financial Protection Bureau (CFPB) and a key figure in the Trump administration, has

pursued a strategy to effectively “bankrupt” and dismantle the CFPB by blocking its access to funding and attempting to terminate most of its staff. Vought’s approach is primarily legalistic: he requested an opinion from the Office of Legal Counsel (OLC) asserting that the CFPB cannot draw further funds from the Federal Reserve while the Fed operates at a loss—an unprecedented interpretation of the Dodd-Frank funding mechanism that underpins the CFPB’s independence.​

Earlier in 2025, Vought declined to request new funding, arguing reserves were sufficient, while legislative action under the “One Big Beautiful Bill Act” cut the cap on how much CFPB could receive from the Fed. The CFPB has relied on these reserves since, but is now projected to run out of operational funds by early 2026, risking suspension or closure of its functions unless Congress intervenes.​

Vought has also moved to halt nearly all CFPB enforcement and supervisory activities and sought—unsuccessfully, due to court injunctions—to fire over 90 percent of agency staff. The Trump administration has declared CFPB funding “illegal,” suspending much of the bureau’s operations and contending that, without Federal Reserve profits, the agency simply cannot draw funds as envisioned by statute.​

Courts, however, have paused mass layoffs and procedural maneuvers, and current funding legislation prohibits firing staff through January 2026, despite stopped funding. Observers, including legal scholars and former CFPB officials, interpret these moves as a concerted effort to bypass statutory protections through strained legal interpretations, effectively leaving the CFPB a severely weakened, nearly dormant “zombie” agency.​

In summary, Russ Vought’s campaign against the CFPB centers on draining it of operational funds by blocking its legal funding channels, halting its activities, and attempting to lay off most staff—measures that could soon result in the agency’s functional shutdown or force Congress to act to rescue or restructure it.​