What's at stake in DOGE's CFPB shutdown

• Even some in the financial sector, oft-targeted by the bureau, have argued for keeping the CFPB around.

The big picture: The shutdown of the agency throws into question the future of several pending lawsuits, as well as rules meant to lower credit card and overdraft fees.

• Pending suits include one against JPMorgan, Bank of America and Wells Fargo over alleged fraud on the Zelle payment network.
• Another case is pending against a bank that helps disburse payments to unbanked Social Security recipients. Comerica is accused of charging them unnecessary fees, among other things.
• There's also a suit charging the credit bureau Experian with failing to remove errors on people's credit reports — a move that can leave affect people's ability to land jobs, get mortgages or rent apartments.

What they're saying: "The Consumer Financial Protection Bureau (CFPB) — the brainchild of Sen. Elizabeth Warren — has long functioned as another woke, weaponized arm of the bureaucracy that leverages its power against certain industries and individuals disfavored by so-called 'elites,' " the White House said in a press release Monday.

• In his first term, President Trump appeared to at least partially support the CFPB's practices, like when big fines were announced against Wells Fargo.

Between the lines: The agency's constitutionality has been considered twice at the Supreme Court. In one case, the court ruled against the CFPB — making it easier for a president to remove the agency's chair.

• But less than a year ago, the agency won a lawsuit that challenged the way it was funded. In that case, even some financial industry types — mortgage bankers, home builders and Realtors — argued against dismantling the agency, because its regulations are a key part of the housing sector.
• DOGE's moves to try and shut the agency now "is in some ways more troubling," says Christopher Peterson, who worked at the CFPB during the Obama administration. "Because it seems so untethered by the law."
• Over the weekend acting CFPB director Russell Vought directed employees to halt much of their work, including issuing rules and conducting investigations, multiple outlets reported.

Context: The conservative Heritage Foundation's Project 2025, coauthored by Vought, calls for the agency's abolition.

• The group argues that the agency uses the money it obtains in fines to fund "leftist nonprofits."
• The latter charge seems to refer to the CFPB's civil penalty fund, the money it collects from fines to financial institutions. If that money can't be paid out to victims of scams, it can be used to fund financial literacy and education programs. That appears to have happened once, to date, per the agency's web site.
• "It's a conspiracy theory," says Peterson, now a law professor at the University of Utah. The agency has returned billions to consumers.

Others in the financial industry have argued that the CFPB, particularly during the Biden administration, went too far in regulating the industry, holding back innovation in a way that could ultimately harm consumers.

• Still, some in the sector said a total shutdown would be a bridge too far.
• It's "hard for us to see even the banks wanting the agency to go away," reads a note from TD Cowen on Monday. "Biden's CFPB may have gone too far, but banks could be worse off if each state enforced policies without a federal entity in the lead."
• The agency did not respond to an emailed request for comment — presumably because, at Vought's order, no one is working.