"Attorneys for Russell Vought, acting director of the Consumer Financial Protection Bureau, wrote in a legal filing on November 10 that the administration "anticipates exhausting" the CFPB's available funds in early 2026, meaning that after that point, the agency created in 2011 to protect Americans from another financial crisis will be defunct."
"Vought wrote in a memo that the CFPB's funding structure, which relies on money from the Federal Reserve, is not constitutional, marking the Trump administration's most significant step to date in attempting to shut down the agency. Vought argued that the agency can only draw from the Fed when the central bank is turning a profit, which it has not done in recent years."
""Earlier administrations have worked closely with the CFPB to ensure that servicers comply with the contracts they have to service student loans, and also to make sure that the laws are carried out as they should," Rao said. "And I don't think any of us have any confidence at this point that that's going to occur.""
The Consumer Financial Protection Bureau may exhaust its available funds in early 2026, which could render the agency defunct. Acting director Russell Vought's legal filing asserts that the bureau's funding mechanism, which relies on transfers from the Federal Reserve, is unconstitutional and that the CFPB can draw from the Fed only when the central bank is profitable. Eliminating the CFPB would remove oversight of financial institutions and increase risks for student-loan borrowers. The bureau has previously fined servicers, sued lenders, and returned millions to affected borrowers, supporting enforcement and borrower relief.
Read at Business Insider
Unable to calculate read time
Collection
[
|
...
]