The acting director of the Consumer Financial Protection Bureau, Russell Vought, faces two lawsuits after ordering a sweeping freeze on the agency's operations and granting access to Elon Musk's Department of Government Efficiency (DOGE), prompting immediate legal challenges from a major federal employees union.
The lawsuits, filed Sunday by the National Treasury Employees Union (NTEU), aim to block DOGE's access to CFPB's internal systems and prevent the agency from carrying out Vought's orders, which included halting supervision, enforcement, and all ongoing investigations. The NTEU alleges the directives are unlawful and that allowing DOGE-affiliated staff into CFPB's communications network poses a significant privacy risk for employees.
Vought, appointed by President Donald Trump, instructed employees on Saturday to "cease all supervision and examination activity," suspend pending investigations, and close the CFPB's Washington headquarters for the week, according to internal communications obtained by NBC News. The agency, which regulates financial institutions and has secured more than $21 billion in consumer relief since its inception, now faces an unprecedented halt in enforcement actions.
The lawsuits argue that DOGE staffers should not be granted access to CFPB systems, including employee records, as it could lead to "irreparable harm to their privacy interests." The union warns that personal data, including medical records, could be misused to retaliate against staff, raising broader concerns about data security and government oversight under the new directive.
The controversy is the latest in a series of legal battles over DOGE, a key component of Trump's broader government overhaul effort, led by Musk. The initiative, designed to cut federal agencies and streamline operations, has been criticized for operating outside traditional oversight mechanisms.
DOGE personnel have already been integrated into multiple federal agencies, including the Treasury Department, Centers for Disease Control and Prevention, and the Department of Energy. Critics argue the initiative amounts to a power grab, with union leaders and lawmakers raising concerns about transparency and executive overreach.
Sen. Elizabeth Warren (D-Mass.), who was instrumental in the CFPB's creation, condemned Vought's move, calling it "giving big banks and giant corporations the green light to scam families."
In addition to the operational freeze, Vought announced Saturday that the CFPB would not receive its scheduled quarterly transfer of funding from the Federal Reserve, instead relying on its remaining balance. The move, which effectively starves the agency of new funding, marks a significant shift in how the bureau operates, as it has historically been funded independently of congressional appropriations.
Musk, who has publicly advocated for dismantling the CFPB, responded to the directive with a post on X, saying "RIP CFPB" and reiterating his call to "delete" the agency, arguing that it is "too duplicative" and hinders financial innovation.
The lawsuits against Vought add to a growing list of legal challenges to Trump's executive orders, including those related to DOGE. A federal judge on Saturday blocked DOGE's access to Treasury Department records following a separate lawsuit brought by 19 state attorneys general.
Vought's directive has also prompted immediate pushback from CFPB employees, with the bureau's union announcing a protest outside headquarters Monday. The CFPB's staff is pushing for judicial intervention to prevent what the NTEU describes as an attempted "purge" of agency employees.
The rollback of CFPB's enforcement capabilities has been welcomed by some in the financial sector. Marc Andreessen, a venture capitalist who has advised DOGE, accused the CFPB of "terrorizing anybody who tries to do anything new in financial services." His firm, Andreessen Horowitz, previously invested in LendUp, a financial services company that was forced by the CFPB to return nearly $40 million to misled consumers.
