The Deep State is being dismantled one agency at a time.
Donald Trump promised to drain the swamp and he’s keeping his word.
And the Trump Administration just delivered a fatal blow to this Obama-era agency that liberals thought was untouchable.
The Consumer Financial Protection Bureau gets its funds cut off
President Donald Trump’s administration hit the Consumer Financial Protection Bureau (CFPB) where it hurts – right in the wallet.
Office of Management and Budget Director Russ Vought, who’s serving as acting director of the CFPB, submitted a funding request to the Federal Reserve for exactly $0.
That’s right. Zero dollars.
Vought explained that the bureau’s current balance of over $700 million is "excessive in the current fiscal environment."
The CFPB was created in the wake of the 2008 financial crisis as part of the Dodd-Frank Act. Democrats deliberately designed the agency to operate outside the normal checks and balances of our constitutional system.
As Senator Rand Paul wrote in a National Review op-ed, the CFPB was "shielded from oversight by the executive, judicial, and legislative branches." The agency’s director couldn’t be fired by the President, courts had to defer to the agency’s interpretation of its own powers, and – most importantly – it was funded directly from Federal Reserve earnings rather than through congressional appropriations.
In other words, the CFPB was accountable to nobody.
The Federal Reserve’s losses cut off CFPB’s money spigot
Here’s where things get interesting.
The clever architects of the CFPB thought they had guaranteed the agency a permanent source of funding outside of Congressional control. But they didn’t anticipate the Federal Reserve operating at a loss.
According to Senator Rand Paul, the Fed has been operating at a loss since September 2022, and those losses have only gotten worse.
Without Fed earnings, there are no surplus funds for the Treasury to draw from, which means the CFPB has "no valid claim now to any money from the Fed," according to Hal Scott, a Harvard Law School emeritus professor.
This financial predicament creates the perfect constitutional justification for what Trump promised during his campaign: reining in unaccountable bureaucracies.
CFPB’s reign of financial tyranny
The CFPB has been wreaking havoc on American financial freedom since its inception.
The bureau’s payday lending rule was so burdensome that the CFPB itself admitted it could destroy the payday lending industry that many lower-income Americans rely upon.
Both houses of Congress recently voted to nullify a CFPB rule that would have capped bank overdraft fees. While that might sound consumer-friendly on the surface, critics pointed out it would likely lead to the end of overdraft services altogether or significant fee increases for other banking services.
Senator Paul didn’t mince words. He blasted the CFPB’s actions as nothing short of meddling that "infantilized customers and made access to affordable financial services more difficult."
Trump administration cleans house
President Trump wasted no time going after the bloated bureaucracy when he returned to the White House. He campaigned on tackling the administrative state, and voters gave him a mandate to do just that.
The administration has ordered the CFPB to halt its work while it seeks to streamline the agency. Some critics argue the agency should be eliminated entirely, pointing out that its functions duplicate existing regulatory authorities.
Norbert Michel from the Cato Institute notes that federal consumer protection laws long predated the CFPB, and when the agency was created, Congress simply transferred existing enforcement authorities to the bureau. Michel also highlights that "the United States has twelve separate federal financial regulators and state regulators for securities, banking, insurance companies."
Madisonian justice served
There’s a certain poetic justice to the CFPB’s current predicament.
The agency’s founders attempted to shield it from Constitutional accountability by creating a special funding mechanism. That very mechanism is now the legal basis for cutting off its funds.
As Senator Paul described it: "There is more than a touch of Madisonian justice that the CFPB has no valid claim to new funding precisely because its drafters thought they guaranteed money for the bureau in a way that shielded the agency from accountability to the people’s representatives."
The CFPB’s defunding represents a significant victory for Constitutional governance and President Trump’s promise to drain the swamp. After more than a decade of operating outside normal Constitutional constraints, the agency is finally facing accountability.
The Trump administration’s action against the CFPB demonstrates its commitment to reining in the administrative state and restoring proper Constitutional checks and balances.