CFPB HQ Temporarily Closed, Operations Frozen

The CFPB’s headquarters in Washington DC will be closed this week as the agency undergoes an audit from the Department of Government Efficiency. The audit coincides with the arrival of yet another new Acting Director, Russell Vought, who is also serving officially as the Director of OMB. At the CFPB this weekend, Vought told employees not to “approve or issue any proposed or final rules or formal or informal guidance” and to “suspend the effective dates of all final rules that have been issued or published but that have not yet become effective.” He also told the Federal Reserve that the agency does not need funding at this time due to having too much on hand already.

While he has ordered all final rules that have been issued or published but not yet effective be suspended, some legal observers have indicated that the small business data collection process overseen by the CFPB (pursuant to Section 1071 of Dodd-Frank) that is scheduled to start on July 18 is technically bound by rules already in effect and that the deadline is merely the start date for compliance. However, that interpretation may be at odds with the spirit and intent of the suspension.

The Independent Community Bankers Association (ICBA) welcomed Vought into the role. “We look forward to working closely with Director Vought, the Trump administration, and the 119th Congress to implement needed CFPB regulatory reforms to help community banks meet the needs of local communities,” they said. The statement included a link in which they call for the small business lending data collection rules to be repealed.

“Intrusive data collection will compromise the privacy of small business applicants, effectively ‘commoditize’ small business lending, and increase the cost of credit,” they say. “ICBA urges the 119th Congress to promptly repeal or substantially revise Section 1071 to limit the implementation of a destructive rule.”