Is Russell Vought following Project 2025's CFPB plans?

Russell Vought is casting further doubt on the future of the Consumer Financial Protection Bureau. 

The regulator's new acting director Monday ordered staff to "stand down" from all tasks. A purported new CFPB chief legal officer also told enforcement staff specifically to halt all activity, according to an email obtained by American Banker.

The move follows U.S. Treasury Secretary Scott Bessent's pause last week during his brief stint as the bureau's acting director. Vought, who was confirmed as the director of Office of Management and Budget by the Senate on Feb. 6, appears to be following the Trump Administration's push to cut perceived excess federal spending and regulation. 

"The CFPB has been a woke and weaponized agency against disfavored industries and individuals for a long time," wrote Vought on a post on X Sunday, linking to a Washington Examiner op-ed. "This must end."

The bureau hasn't responded to public requests for comment, and Bessent last week barred employees from public communications. 

Vought, who previously led OMB between 2018 to 2020, is also a co-author of The Heritage Foundation's Project 2025 playbook, in which a fellow contributor calls for stripping the CFPB of its powers ahead of a shutdown. Vought, who hasn't made any specific statements on mortgage regulation, wrote a chapter about the executive office.

The latest salvo from CFPB leadership has drawn scorn from consumer advocate groups and lawmakers, and the National Treasury Employees Union, which includes federal employees from 37 agencies, which sued Vought Sunday to stop his efforts.

Mortgage experts last week, reflecting on Bessent's initial call for the CFPB to halt all work, emphasized that origination activity should continue unaffected, and that state regulators would enforce consumer protection laws. Industry attorneys meanwhile questioned whether behind-the-scenes work, like examinations, would continue. 

Richard Horn, co-managing partner of Garris Horn LLP, cautioned that halting examinations could conflict with the Dodd-Frank Act, which mandates that the bureau "shall," rather than "may," conduct them.

"Other functions of the CFPB potentially affected by these 'stop work orders' also potentially run afoul of statute," he wrote in a blog post Sunday. "Without changes from Congress either abolishing the agency or deleting these statutory mandates, there could be litigation heading the CFPB's way trying to force it to carry out its mandated activities."

Deleting the CFPB would require an act of Congress. Vought in another tweet said he notified the Federal Reserve the bureau won't take its next draw of funding. 

CFPB employees are also suing to kick out members of Elon Musk's Department of Government Efficiency from the bureau's systems. DOGE, which has embedded itself in other government agencies, was recently barred by a federal judge from accessing the U.S. Treasury's payment systems.

The HUD veteran behind Project 2025's plans for the CFPB

The Project 2025 playbook calls for various measures to defang the CFPB, including barring funding for enforcement actions that are based on violations of rules that did not undergo the formal rulemaking process as dictated by the Administrative Procedure Act.

The author of that section is Robert Bowes, who served in Trump's Department of Housing and Urban Development between 2017 to 2021. He was a former director of faith-based initiatives at HUD. Previously he was a vice president at Chase Manhattan Bank and a director of counterparty risk at Fannie Mae, according to a White House release. 

Bowes also claims he was hired by the Federal Reserve in 2008 to design and establish bank stress tests in the wake of the Great Financial Crisis. That description comes from Bowes' declaration last December on behalf of My Pillow CEO Mike Lindell, who is being sued for defamation by electronic voting system Smartmatic. 

Bowes was also nominated by Trump in 2020 to be a derivatives market regulator. The Wall Street Journal subsequently scrutinized his stock activity, which included five-figure profit on shares of mortgage insurer Genworth Financial, purchased on the eve of a positive public announcement about its since-dead merger with a Chinese company.  

It's unclear if Bowes is employed under the new Trump Administration or with the CFPB.

Mortgage professionals in recent days have debated the merits of the CFPB in discourse on LinkedIn, while industry trade groups have made little formal comment. 

In a message Monday, a spokesperson for the Mortgage Bankers Association said the group will engage with OMB to understand Vought's objectives. MBA CEO Bob Broeksmit made no mention of the CFPB in prepared remarks the MBA shared Monday ahead of his actual speech at the MBAS's Commercial/Multifamily Finance Convention and Expo. 

Is the shutdown a 'bargaining chip'?

Horn, a former CFPB senior counsel, wrote the bureau's extreme moves could be a "bargaining chip" for the Trump administration to seek large structural changes to the regulator. In the meantime, others are raising serious concern. Sen. Elizabeth Warren, D-MA, the architect of the regulator, said the move signals "open season" for Wall Street to cheat families. 

"If you have a bank account, or a credit card, or a mortgage, or a student loan - this is a code red," said Warren in a statement Monday. "I am ringing the alarm bell."