Trump Appoints CFPB Director Despite White House Plan to Close Agency

President Trump has nominated Stuart Levenbach as the new director of the Consumer Financial Protection Bureau (CFPB). This announcement came on Wednesday amidst ongoing efforts by the Trump administration to dismantle the agency.

Levenbach’s Background and Role

Levenbach currently serves as an associate director at the Office of Management and Budget, focusing on energy, natural resources, science, and water issues. His experience includes a tenure as chief of staff for the National Oceanic and Atmospheric Administration during Trump’s first term.

Legal Maneuvers and Acting Director

Trump’s strategy involves a legal maneuver to keep Russell Vought as acting director. Under the Vacancies Act, Vought can serve in this role for 210 days. However, his nomination of Levenbach extends this timeline until the Senate either approves or denies the nomination.

CFPB’s Current Status

• The CFPB has been largely inactive for much of the year.
• Many employees have been instructed not to work.
• The bureau is currently focused on reversing regulations established during both Trump’s and Biden’s administrations.

Budget Concerns for the CFPB

In a recent statement, the White House indicated it would not withdraw any funds from the Federal Reserve to finance the CFPB after December 31. Historically, funding for the CFPB comes from the Fed, which, according to a new interpretation of the Dodd-Frank Act, must be profitable to support the bureau’s operations.

Financial Implications

Since 2022, the Federal Reserve has faced financial challenges, primarily due to low-interest bonds it holds from the COVID-19 pandemic. This situation has led the Fed to be cash-flow negative, complicating its ability to fund the CFPB.

Criticism from Lawmakers

Senator Elizabeth Warren, the top Democrat on the Senate Banking Committee, criticized Trump’s nomination, suggesting it serves as a facade for Vought to maintain his position indefinitely while attempting to close down the CFPB illegally.

The Purpose of the CFPB

The CFPB was established following the 2008 financial crisis as part of the Dodd-Frank Act. Its mission is to serve as an independent advocate for consumers, ensuring that they are protected from unethical practices in the financial sector.