By Douglas Gillison

(Reuters) – The U.S. Consumer Financial Protection Bureau (CFPB) was significantly weakened over the weekend: all activities were suspended, funding cuts were announced, and its headquarters was temporarily closed. This action removes an important layer of oversight for consumer-facing financial companies.

Since its inception by Congress in 2010, the agency has faced criticism from conservatives and the industry. Acting chief Russell Vought ordered staff to halt all “supervision and examination activities” and indicated intentions to eliminate the agency’s funding.

The National Treasury Employees Union, representing some CFPB workers, has launched a lawsuit against Vought, claiming his actions violate the U.S. Constitution by undermining Congress’s authority to oversee and fund the agency’s operations.

Republicans have criticized the CFPB for being unaccountable and overstepping its authority as it regulates entities involved in the financial crisis, such as banks and mortgage lenders. Critics assert that leaving businesses without federal oversight undermines consumer protection.

Dennis Kelleher, executive of Better Markets, remarked, “This latest attempt to kill the consumer bureau is another slap in the face for all Americans who depend on basic financial products and services.” He accused former President Trump of abandoning his own voters to financial exploitation.

Concerns have also arisen surrounding a potential conflict of interest involving billionaire Elon Musk, whose “Department of Government Efficiency” was granted access to CFPB’s IT systems, which may oversee one of his business ventures. The NTEU has filed a separate lawsuit to block Musk’s team from accessing personnel records, fearing harassment or intimidation.

The weekend actions were part of an ongoing campaign by Trump and Musk to reshape federal governance, eliciting protests from agency workers and backlash from Democrats in Congress. Vought’s announcement to halt CFPB funding for the upcoming fiscal quarter and close the Washington headquarters is seen as a clear attempt to dismantle consumer protections.

Vought also ordered an end to public communications from the CFPB. Responses from the Office of Management and Budget were not immediate.

Skye Perryman, president of Democracy Forward, condemned the demobilization efforts as a “concerted effort to dismantle protections for American consumers” and vowed to seek legal avenues to defend the agency and protect consumers from financial harm.