Dive Brief:
- Rep. Maxine Waters, D-CA, cautioned Russ Vought, acting director of the Consumer Financial Protection Bureau, against using the government shutdown as an opportunity to furlough bureau employees.
- Because the CFPB receives funding from the Federal Reserve and isn’t reliant on the annual appropriations process, “such an action would be both legally baseless and extremely harmful to American consumers,” Waters, the ranking member of the House Financial Services Committee, said in a Tuesday letter to Vought.
- The CFPB, meanwhile, informed employees Tuesday that it will remain operational in the event of a shutdown that began at midnight, Reuters reported, citing an email sent to staff. “CFPB will continue operations in the event of a shutdown, even though some other parts of the federal government would be affected,” Chief Operating Officer Adam Martinez wrote, according to Reuters. “Therefore CFPB employees should plan to report to work as usual on Wednesday, October 1, 2025.”
Dive Insight:
Waters cited reports Vought was considering furloughing CFPB employees in light of the government shutdown that began Wednesday.
“A shutdown does not apply to the CFPB,” Waters said, noting the bureau has continued its work through “multiple” government shutdowns. “Using a government shutdown as a pretext to furlough staff would not only violate the CFPB’s statutory mandate but would cause direct harm to American consumers.”
Vought is also the director of the Office of Management and Budget, which last week told federal agencies to prepare plans, in the event of a shutdown, for permanent firings of staff involved in programs or projects which would see discretionary funding lapse Wednesday, Politico reported Sep. 24.
Waters also referred to reports that Vought instructed CFPB employees to resubmit their resumes by Sept. 25 to inform decisions on employee cuts, “conveniently just a few days prior to a potential shutdown and while litigation continues in response to your illegal attempt to fire most of the staff earlier this year.”
“You are ostensibly making this move in response to the massive reduction in the Bureau’s funding cap imposed by Republicans in the budget reconciliation process,” Waters wrote to Vought. “Yet, beginning October 1, you will have access to new transfers from the Federal Reserve as the FY26 fiscal year begins, and those funds will be unaffected by any shutdown.”
The budget bill President Donald Trump signed in July included large cuts to the CFPB’s budget, slashing the maximum amount the bureau can receive from the Fed and shrinking the CFPB’s mandatory funding cap by 46%. Republicans said the move would save $2 billion, and the CFPB can still request funds from Congress.
Waters urged Vought to work with Congress “to reverse the unjustified and ruthless CFPB budget cuts that only leave consumers exposed to financial fraud and predatory rip offs inflicted by unsupervised bad actors.”
CFPB employment and bureau function generally have been an ongoing saga since Trump took office in January. Vought has endeavored to slash the bureau’s workforce and shrink the level of funding it receives, in addition to rescinding guidance and dropping lawsuits and consent orders against banks and fintechs.
The door was reopened in August for Trump officials to pursue mass layoffs at the CFPB, although the National Treasury Employees Union filed an appeal Monday.
