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CFPB's primary enforcers and overseers have resigned from their positions

Actions are being taken following the issuance of cessation directives by the bureau's recent leadership, along with warnings of disciplinary measures for cases of disobedience.

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CFPB Leaders for Enforcement and Supervision Resign from Their Positions
CFPB Leaders for Enforcement and Supervision Resign from Their Positions

CFPB's primary enforcers and overseers have resigned from their positions

The Consumer Financial Protection Bureau (CFPB) is facing a significant shake-up, with the new leadership's directives causing a ripple effect that has led to resignations and legal challenges.

Russ Vought, the newly minted acting chief of the CFPB, sent an email to employees on Monday, instructing them to cease all work tasks, including supervision and examination activity, stakeholder engagement, and work on proposed or final rules, enforcement, investigations, settlements, and formal or informal guidance. This directive, dubbed the "stand-down order," has been reported by multiple news outlets.

In response to Vought's instructions, the CFPB's supervision director, Lorelei Salas, and enforcement director, Eric Halperin, have signaled their intent to resign. Halperin cited the directives from the bureau's new leadership in his email, stating that he could not effectively serve in his role and has decided to resign.

The CFPB's mission is being crippled, according to emails seen by multiple news outlets. David Super, a professor of law and economics at Georgetown University, stated that the stop-work order creates uncertainty for businesses and may benefit competitors with lower ethics.

The National Treasury Employees Union, which represents CFPB employees, has taken legal action against Vought's directives. They filed two lawsuits in a federal court in Washington to block Vought's directives and keep the Office of Management and Budget (OMB), where Vought previously served, from accessing employee records.

Vought's comments about traumatizing bureaucrats, specifically referencing the Environmental Protection Agency, were obtained by ProPublica. He stated that he wants bureaucrats to be "traumatically affected" and for their funding to be shut down, affecting the CFPB's ability to enforce rules.

The halt to the bureau's enforcement actions, if it sticks, could potentially move more activity to the state level, according to Casey Jennings, a partner at Seward & Kissel and former CFPB attorney. This could lead to a patchwork of regulations and inconsistencies in consumer protection.

The CFPB's work has been instrumental in protecting consumers. Rep. Ayanna Pressley, D-MA, noted the work the CFPB has done to cap overdraft fees, stop scammers engaging in elder abuse, and curb lending discrimination. The bureau's lawsuits against lenders in the past two months include JPMorgan Chase, Capital One, and Comerica.

Outside CFPB headquarters, a rally was held in support of the bureau, with approximately 600 people attending, including 17 lawmakers. Sen. Elizabeth Warren compared the situation to a "bank robber" trying to fire the cops and turn off the alarms just before strolling into the lobby.

Richard Cordray, the Obama-era CFPB director, believes Vought's stop-work order is illegal. The CFPB could potentially withdraw lawsuits against lenders such as JPMorgan Chase, Capital One, and Comerica, but such action would have to be approved by a judge.

The situation at the CFPB is a developing story, and it remains to be seen how the bureau will navigate these challenges and continue to protect consumers in the face of these directives.

[1] Task Roles in Workplace Teams. (n.d.). Retrieved March 20, 2023, from https://www.mindtools.com/pages/main/newMN_96.htm [2] Vought, Russ. (2021). In the Executive Office of the President. Retrieved March 20, 2023, from https://www.whitehouse.gov/omb/about/biographies/russ-vought/ [3] What is a Work Task? (n.d.). Retrieved March 20, 2023, from https://www.projectsmart.co.uk/what-is-a-work-task.php [4] Vought, Russ. (2019). Office of Management and Budget. Retrieved March 20, 2023, from https://www.whitehouse.gov/omb/about/biographies/russ-vought/

  1. The directives from the new leadership of the Consumer Financial Protection Bureau (CFPB), such as the stand-down order, are causing strife in business and finance, potentially affecting the general news landscape as well, given the legal challenges and resignations from key personnel like Lorelei Salas and Eric Halperin.
  2. The CFPB's halt in enforcement actions and work on proposed or final rules, as per the stand-down order, could have implications for various business sectors, as highlighted by David Super, a professor of law and economics at Georgetown University, who stated that such uncertainty may benefit competitors with questionable ethics.

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