The CFPB has transferred all of its active litigation to the Department of Justice, a significant step in what officials and critics say is the Trump administration’s rapid effort to dismantle the federal consumer watchdog.
Bloomberg Law first reported on this development Thursday.
According to representatives from CFPB's union, DOJ attorneys will now assume responsibility for the CFPB’s remaining enforcement cases, appeals, and legal battles over agency regulations, including litigation targeting the Bureau’s recently finalized open banking rule.
The shift comes days after Acting CFPB Director Russell Vought informed a federal court that the agency is expected to run out of money early next year, after the DOJ’s Office of Legal Counsel concluded the Federal Reserve lacked profits needed to fund the Bureau.
The move drew immediate condemnation from Sen. Elizabeth Warren (D-Mass.), the CFPB’s architect and the top Democrat on the Senate Banking Committee. “Donald Trump and Russ Vought are racing to shut down the CFPB while their lawyers tell the courts the opposite,” Warren said, arguing the litigation transfer strips the agency of the very tools it uses to return “billions of dollars” to harmed consumers.
Cat Farman, president of the CFPB union, called the action unlawful. “This is Russ Vought’s latest illegal power grab,” and warned that CFPB attorneys fear DOJ could dismiss cases altogether.
There are reports that the Trump administration is planning to furlough all CFPB employees at the end of the year. CU Times has yet to confirm those communications to CFPB staff.
The administration is also pressing ahead with its plan to reshape the Bureau. On Nov. 18, President Donald Trump nominated Stuart Levenbach, a former Office of Management and Budget official, to serve a five-year term as CFPB Director. Industry groups welcomed the nomination, calling it a chance to stabilize the agency after months of turmoil.
But Warren blasted the timing as a “front” to allow Vought to remain in control as he seeks to “illegally close down the agency.”
The Senate Banking Committee has not yet scheduled a confirmation hearing.
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