What CFPB ‘stand down' means for consumers

Federal employees that oversee financial services, like credit cards or loans, have been told to “stand down”. In an email, obtained by NBC News, the Consumer Financial Protection Bureau’s acting director told staff the agency’s headquarters in Washington D.C. is closed this week. The note tells employees to not perform any work tasks without written approval from leadership. NBC News reports a union has filed a lawsuit to block the directive.

What does this all mean for consumers?

CONSUMER COMPLAINTS

Following the financial crisis of the Great Recession, Congress created the Consumer Financial Protection Bureau to enforce rules for mortgages, banks, credit cards and other consumer financial products. The CFPB also takes consumer complaints, asking companies to respond. Most, according to the CFPB, do within 15 days.

“If you think about us, as individuals, if I have a $500 squabble with my bank, I can't sue my bank. How can I deal with that? But, for me, that $500 means a whole lot,” said Ann Baddour with the nonprofit Texas Appleseed. 

Baddour is also a former member of the CFPB’s Consumer Advisory Board. While the CFPB’s home page showed an error message on Monday, the complaint portal page was online. When NBC 5 Responds dialed the toll-free complaint line, someone answered after a six-minute hold on Monday afternoon.

“I would encourage people to continue to submit complaints,” said Baddour. “Hopefully, the agency after this brief stop will pick up and continue and push forward. But I don't know what the final answer is.”

We asked Baddour about other agencies that may investigate consumer complaints about financial products – if a consumer isn’t able to connect with the CFPB. Baddour explained it would depend on the type of financial product or service and whether it is a state-chartered institution.

“It's a really hard question,” Baddour said. “There are other places people might complain, but for the most part, there's no agency that has the same ability to hold businesses accountable.”

“If it's a state regulated bank or a state regulated finance company, they can complain to the state regulators here in Texas, the Texas Department of Banking or the Office of Consumer Credit Commissioner, the Attorney General's office,” Baddour continued.

For complaints about services provided by some fintech firms or peer-to-peer payment apps, it was not clear if other agencies overlap.

“I'm not sure there is another place for people to go for those kinds of complaints,” Baddour said.

The Office of the Comptroller of the Currency’s website takes complaints about OCC-regulated banks and explains there are other types of banks that are regulated by other agencies.

FUTURE OF CFPB RULES

Lauren Saunders with the National Consumer Law Center told our NBC 5 Responds Chicago colleagues, that it’s unclear what will happen to new rules the CFPB aimed to enforce. That would include a rule to prevent medical debt from showing up on a consumer’s credit reports and a cap on credit card late fees.

“Big banks want to keep their overdraft profits, so they’ve sued the CFPB. The CFPB is not defending itself right now,” Saunders said.

According to the National Consumer Law Center’s Lauren Saunders, it took an act of Congress to create the CFPB and it would take congressional approval to dismantle it.

New CFPB Acting Director Russell Vought shared on X that he notified the Federal Reserve the CFPB would not take its next draw of funding. The message said, in part, "The Bureau's current balance of $711.6 million is in fact excessive in the current fiscal environment. This spigot, long contributing to CFPB's unaccountability, is now being turned off."

The White House provided a statement, dated Monday, accusing the CFPB of government overreach.

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