- House Republicans and the Trump administration appear to be abandoning a plan to repeal the CFPB after 13 months of court losses.
- Only Congress can repeal the CFPB, and no executive order or funding cut can override that. Federal courts have repeatedly blocked the administration’s attempts to do so unilaterally.
- Instead of continuing a losing legal battle, the CFPB under Acting Director Ross Vaught appears to be focused on writing new rules on open banking, data collection, and small-dollar lending.
The Trump administration’s efforts to dismantle the Consumer Financial Protection Bureau have hit a wall that doesn’t seem to be around it: the law.
After 13 months Court losses (PDF) Both House Republicans and the White House appear to accept what legal experts have said all along — only an act of Congress can actually shut down the CFPB.
Semaphore and POLITICO He reported on a meeting between Republicans on the House Financial Services Committee (HFSC) and Acting CFPB Director Ross Vaught that focused on the future of the agency. Four lawmakers spoke to Semaphore, with Rep. John Rose (R-Tenn.) saying the CFPB is “unlikely” to “disappear” 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). This is important because an agency created under one federal law can only be revoked under another federal law. This means that both chambers of Congress would need to pass the bill, and the president would need to sign it.
No executive order, budget directive, or administrative reorganization can overturn a decision of Congress.
The Trump administration has tried to get around this by effectively liquidating the agency from within: halting enforcement, reducing oversight, planning to eliminate 90 percent of staff, and more.
But the CFPB union filed a lawsuit and the courts intervened. This condition has been preventing a 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 the summer of 2026.
The central legal question is clear and straightforward: Can the executive branch unilaterally destroy an agency created by Congress? The administration’s record in this case suggests that the courts are skeptical.
Axis: From closure to setting appropriate rules for the industry
With the courts blocking the repeal, the administration appears to be turning to Plan B: using the CFPB’s authority to write the rules the financial industry wants.
HFSC members told both outlets that they discussed data collection, open banking, small-dollar lending, and other topics with Vought.
The financial industry wants this for multiple reasons:
- The agency has exclusive statutory authority over some of the most important regulations in financial services.
- No other federal agency can write open banking rules that would allow big banks to charge fees for access to consumer data.
- Regulation is a double-edged sword, as some companies and industries need to deal with bad actors because they can damage everyone’s reputation.
- You cannot get clarity to work if the organization overseeing your work is closed.
However, consumer groups are concerned about what these rules could mean for consumers.
What consumers should know
The net result for consumers is a CFPB that still exists but may not monitor the individual consumer as much as it once did. Enforcement actions declined sharply. The remaining rulemaking process focuses on deregulation.
The lawmakers told Semaphore that they discussed “Opportunities to rein in that agency without closing it, including greater congressional oversight“.
Vaught will reportedly testify before the House Budget Committee on April 15 in his capacity as director of the Office of Management and Budget, which could give lawmakers the opportunity to question his actions at the CFPB. At that time we may get more insights into what the future holds.
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