Trump Administration Abandons Plan To Eliminate CFPB After 13 Months Of Court Losses

The Trump Administration’s effort to dismantle the Consumer Financial Protection Bureau has run into a wall it cannot seem to get around: the law.

After 13 months of court losses (PDF File), both House Republicans and the White House appear to be accepting what legal experts have said all along — only an act of Congress can actually shut down the CFPB.

Semafor and Politico reported on a meeting between House Financial Services Committee (HFSC) Republicans and CFPB Acting Director Russ Vought that centered on the agency’s future. Four lawmakers spoke to Semafor, with Rep. John Rose (R-TN) saying that the CFPB was “not likely” to “go away” in “the current environment.”

Why Executive Action Can’t Kill The CFPB

The CFPB was created by Congress through the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (PDF File). That matters because an agency established by federal statute can only be abolished by another federal statute. That means both chambers of Congress would need to pass a bill, and the president would need to sign it.

No executive order, budget directive, or administrative reorganization can override an act of Congress.

The Trump Administration tried to get around this by effectively zeroing out the agency from within:  halting enforcement, cutting supervision, planning to eliminate 90 percent of staff, and more.

But the CFPB’s union sued and the courts intervened. That case has been blocking the shutdown attempt since early 2025.

The full D.C. Circuit Court of Appeals heard oral argument in the NTEU 335 case in late February, and a ruling is expected in summer 2026.

The central legal question is straightforward: can the executive branch unilaterally destroy a Congressionally-created agency? The Administration’s track record in this litigation suggests courts are skeptical.

The Pivot: From Shutdown To Industry-Friendly Rulemaking

With the courts blocking elimination, the Administration appears to be shifting to Plan B: using the CFPB’s authority to write rules the financial industry wants.

HFSC members told both outlets they discussed data collection, open banking, small-dollar lending, and other topics with Vought.

The financial industry wants this for multiple reasons:

• The agency holds exclusive statutory authority over some of the most consequential regulations in financial services. 
• No other federal agency can write the open banking rules that would let big banks charge for access to consumer data.
• Regulation is a double-edged sword, in that some companies and industries need the bad actors dealt with as it can damage everyone’s reputation.
• You can’t get clarity to operate if the organization overseeing your business is shuttered.

However, consumer groups are worried about what these rules could mean for consumers.

What Consumers Should Know

The net result for consumers is a CFPB that continues to exist but may not be watching out for the individual consumer as much as it used to. Enforcement actions have dropped sharply. And the rulemaking focuses that remains is pointed toward deregulation.

Lawmakers told Semafor they discussed “opportunities to rein in that agency without shuttering it, including establishing greater congressional oversight”. 

Vought is reportedly testifying before the House Budget Committee on April 15 in his capacity as OMB Director, which could give lawmakers the chance to ask about his CFPB actions. At that time we may get more insights into what the future holds.

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