The Semi-Annual Report of the Bureau of Consumer Financial Protection
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House Financial Services U.S. House of Representatives
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Maxine Waters
It's because of you. What is astounding is that many of my Republican colleagues continue attacking the CFPB even as they tell their constituents to ask the agency to resolve disputes with companies. Republicans secretly know the CFPB works because their constituents have benefited from it. But they're too scared to admit it. But Americans know the truth.
Recent polling shows that 80% of midterm voters support the CFPB. If going after consumers were not bad enough at the White House, you have also gone after community development financial institutions. I'm talking about CDFIs and you know what I'm talking about, including hundreds of community banks and credit unions. And after the courts rejected your blatantly illegal attempt to cancel grants Congress authorized for nonprofit organization, you are again violating the law with your new rule proposal. Committee Democrats refuse to stand by.
We've led multiple amicus briefs defending the CFPB and Congress's constitutional authority to create it, helping secure numerous court victories that stopped your efforts to dismantle the agency, starve it of its funding and carry out unlawful mass firings. Those victories have kept the bureau opening. So let me be clear. Today is about holding you accountable for ignoring the law. And don't look surprised, you know what I'm talking about.
I'm about out of time.
J. Hill
I now recognize the chair of our subcommittee on financial institutions, who's worked hard in this arena, Mr. Barr from Kentucky, for a one-minute opening statement.
Andy Barr
Director Vought, thank you for appearing before the committee today and thank you for the outstanding job you've done as acting director. Since its creation, the Consumer Financial Protection Bureau has exceeded its statutory authority, relied on regulation by enforcement, and created unnecessary uncertainty for consumers and the financial institutions that serve them. Luckily, under your leadership, the CFPB has taken important steps to reduce this regulatory overreach and get back to the core mission of protecting consumers. To ensure this change in direction is viable over the long term, Congress must establish durable guardrails that provide regulatory certainty. The CFPB reform package accompanying today's hearing reflects an effort to refocus the CFPB on its core statutory mission by improving accountability, increasing transparency, providing greater regulatory certainty, and ensuring that enforcement and supervision are exercised in a fair and consistent manner.
We look forward to discussing those proposals today and identifying additional opportunities to protect consumers while promoting a stable, competitive, and innovative financial marketplace. Thank you, and I yield back.
J. Hill
Today we welcome the testimony of the Honorable Russ Vought, acting director of the CFPB. Acting Director Vought, we thank you for taking time to be with us. You'll be recognized for five minutes to give an oral presentation of your written testimony, and without objection, your written testimony will be made part of the record. I now recognize you for five minutes.
Russell Vought
Chairman Hill, Ranking Member Waters, and members of the committee, thank you for the invitation to appear before you today as I reach the end of my tenure at CFPB. I am pleased to present the Consumer Financial Protection Bureau's semi-annual report to Congress, as well as to provide you an update on the activities of the bureau during my tenure. After being appointed acting director of the bureau, our team took a look under the hood and found an agency that was weaponized, out of control, and had gone far beyond its statutory mandate. Under previous administrations, this agency actually imposed huge costs on the American people and stifled the innovation and resourcefulness that is necessary for a strong economy. Consumers paid the price, literally in the form of higher prices, reduced product offerings, increased borrowing expenses, and the misuse of their taxpayer dollars.
In fact, the Council of Economic Advisers found that the CFPB has cost consumers between 237 to 370 billion dollars since 2011. Instead of going down this destructive path, we have steered the bureau towards operating with humility, accountability, and fiscal responsibility. Regulation should be justified by the statute, not the whims of ideologues at the bureau. Supervision should be precisely targeted to avoid stifling economic growth and innovation and disproportionately increasing compliance costs. And enforcement should be based on clear violations of law, not in advancing a political agenda outside the accountability and oversight from elected officials and the American people.
The bureau's express purpose is to implement and enforce federal consumer financial law consistently so that all consumers have access to markets and that such markets are fair, transparent, and competitive. While we have sought to downsize this agency to the maximum extent possible and rein in its abuses, we have continued to operate it in accordance with that purpose. The bureau's enforcement actions are now focused on addressing actual harm to consumers and ensuring due process. President Trump ensured that the bureau, along with other so-called independent regulatory agencies, are accountable to leaders elected by the American people and no longer operate with impunity. Recently, the Supreme Court confirmed that no such independent agencies exist in slaughter.
The bureau's regulatory actions are no longer developed in isolation, and the rest of the government works to improve its proposals through the Office of Information and Regulatory Affairs. I have also reoriented our internal processes. In supervision, the bureau focuses its resources on pressing threats to consumers and in the areas that are clearly within the bureau's statutory authority. In the past, the supervision program pushed well past the limits of statutory authority under the guise of consumer protection.
The Bureau also now avoids duplication of supervision by other regulators. Supervision is conducted with transparency and respect, and our examiners announce it through the humility pledge that they read at the beginning of all examinations. Enforcement is also guided by a new set of principles so that the CFPB focuses on addressing actual harms to consumers, ensuring due process, and seeking collaboration when appropriate. Under President Trump, there has been a paradigm shift in the way that the CFPB regulates, supervises, and enforces the law as required by Dodd-Frank. And though we have improved a great deal about how to operate, the Bureau remains structurally defective, and I do not believe it should exist in its current form.
I have been committed to running it in a responsible manner and addressing real harms instead of remaking financial markets in service of a political agenda. If confirmed, I know that President Trump's nominee Brian Johnson will do a great job in continuing to steer CFPB in an appropriate manner. Ultimately, however, CFPB must be subject to Congress's most basic function, the appropriations process, to ensure accountability and legitimize an otherwise unserious agency. Thank you, and look forward to answering your questions.
J. Hill
Thank you, Director. We'll now turn to member questions, and given our limited time today, I'm going to strictly enforce the five-minute rule. Hope everybody will help achieve that. I now recognize myself for five minutes for questioning. The CFPB's core mission is to protect consumers, but there's serious questions about whether some actions under the previous administrations advanced that goal or instead imposed costs ultimately harmed consumers.
The Council of Economic Advisers estimated that since 2011, the CFPB policies have cost consumers between 237 and 369 billion dollars through higher borrowing costs, reduced credit availability, and other compliance-related expenses that have been passed on in the financial system. So my first question, Acting Director, is how did the prior regulatory approach negatively impact consumers in practice, and why is it necessary to move quickly to unwind that approach and recalibrate directly to consumer benefit?
Russell Vought
Thank you, Mr. Chairman. I think it's an important note to remind this committee and the country of the impact of the last 15 years of the CFPB before we came into office, with nearly 360 billion dollars in added consumer costs because of the work of the CFPB. And I hear often the 21 billion dollar figure that is often cited by the defenders, and then you put it in comparison to the 370 billion dollars, and it's quite stark. And much of that is on the regulatory front, but it's also by regulating through enforcement, and to go beyond a statutory or regulatory component, and to expand and to use the other tools that CFPB has to effectively regulate by sending a very serious signal to those who are in a particular line of work. But there has been a concern that we have had with the ability to innovate, to have financial products that meet real needs that real people have, and to have innovation in those marketplaces.
And unfortunately, CFPB has not been a part of providing such a landscape.
J. Hill
Appreciate that answer. And one thing that I've seen as a former community bank chief executive in the environment, I can remember distinctly in 2009, before Dodd-Frank was enacted, I participated in a roundtable in Little Rock with then-assistant to the President Elizabeth Warren, working for President Obama, outlining her vision for what a CFPB would do. And her principal mission was actually consolidating the consumer rulebook, making it clear, making it easier for consumers, and reducing regulatory burden on the financial services industry, both I would say bank and non-bank, was her pitch in that roundtable that I listened to. But what we've seen in practice over the 15 years has been, it seems to me, the reverse, which is a duplicative nature. For example, members of Congress at the time of Dodd-Frank said they, I think they thought they were assigning CFPB to look at big banks at the time over $10 billion.
But when you talk to bankers now and non-banks, they show a much more heavy compliance burden that's been pushed down and that is duplicative. Consistent with that, the CFPB has tried to move towards fewer exams and more targeting. Is that your approach, and you've been focused on those institutions over 10 billion, for example? Talk about that for a minute.
Russell Vought
Well, we've had a very active supervision agenda, and many people have not noticed that, who are supporters of the agency in general. We have scaled certain aspects of it down that were largely junkets. So they had a culture of sending eight examiners for eight hours a day for eight weeks to visit on the job, on the scene, each of these financial institutions. We've taken the approach that we can do far more by having it remote, by ensuring that if we need to convene, we will convene. But we have made it so that it is a much more rational.
We'll do about 70 exams this year, but again, the 70 exams is not something that there's a far greater amount of work that's being done behind the scenes in the supervision department. So we have tried to rationalize it. We've tried to bring humility to it. We would dismiss cases that we thought had no basis in statute, and then we would find that the career individuals were treating those entities with disrespect, with roughness, with arbitrary deadlines. And it's one of the reasons we put into place the pledge to make sure that our employees were operating with the respect...
J. Hill
Your time has expired. I thank you, and I now ask the ranking member to address her questions. You have five minutes, ranking member. Thank you.
Maxine Waters
Director Vogt, let's turn to a problematic period of your tenure. Last February, at least three of Elon Musk's employees from the so-called Department of Government Efficiency, DOGE, entered the CFPB headquarters and requested access to sensitive CFPB headquarters and requested access to sensitive CFPB information, including internal staff records, competitive industry data, and personally identifiable consumer information.
The release of this data to inexperienced, untrained, and unvetted individuals raises serious concerns about its impact on law enforcement, consumer privacy, and the protection of confidential supervisory information. Furthermore, the trillionaire Elon Musk, who led DOGE, may have gained access to this data and could use it to inform his own payment app and other companies. I asked the Government Accountability Office to investigate, but you stonewalled them too. However, they found that other agencies like Treasury did not use safeguards to prevent DOGE employees transmitting the sensitive data outside of the agency. A whistleblower also noted that a DOGE team inappropriately handled sensitive data at the National Labor Relations Board and that DOGE's records were destroyed before investigators could audit them.
So Director Vought, because you never responded to a letter that I, Senator Warren, and nearly 200 members of Congress sent you last year, tell me simply, yes or no, do you even know the extent, the extent of the data held by the CFPB that Elon Musk and anyone else associated with DOGE had access to? Do you have a record of all the data that was accessed? Have you done any investigation into whether CFPB's data is secure? Yes or no.
Speaker 6
Congressman, we had a Department of Efficiency, it's something we're very proud of as an administration.
Maxine Waters
Yes or no. Yes or no. Reclaiming my time. No, you don't know. Director Vought, DOGE had unfettered access to all information held by CFPB and it was given administrative privileges that allowed DOGE employees to delete all records of what they did.
So let me ask you again, did anyone from DOGE unlawfully share this data with third parties? Have any records and account access about DOGE's work at the CFPB been deleted, yes or no?
Russell Vought
The Department of Government Efficiency was part of the administration, so when they came on board along with us at the CFPB, they were a part of getting our agency...
Maxine Waters
Yes or no. Yes or no. Reclaiming my time. The gentleman refuses to answer. Just last May, the CFPB under your leadership deleted its institutional records from the agency's website.
This included press releases, consumer advisories, supervisory highlights, reports, and enforcement action summaries from prior administrations, and translations into other languages also were disabled. Are you aware that a district court ordered you and CFPB to maintain and not delete, destroy, remove, or impair any agency data, yes or no?
Yes or no.
Maxine Waters
Yes or no. Reclaiming my time. It did, and your last action to hide the truth is in clear violation of the court injunction. Director Vought, you should preserve all of your emails, text messages, and other forms of communication with respect to your CFPB work while you may also wish to be done. If a new director is confirmed to the CFPB, let me be clear, you're not done with, we're not done with you.
And so, despite your boss calling it a hoax, affordability is a big problem for consumers. Groceries and gas cost much more today than when Trump came into office. In fact, one in ten families have to skip a meal just to get by. Consumers are upset.
J. Hill
Time has expired.
The chair recognizes the vice chairman for the full committee, Mr. Huizenga of Michigan, for five minutes.
Bill Huizenga
Thank you, Director Vote. I'm going to move quickly. I'm fascinated by your humility pledge. I would say other than Kathy Kraninger, humility is not exactly a word associated with the director of the CFPB or frankly its creator. I do think though that Brian Johnson would be an extension of this new spirit.
I'm going to give you a few seconds though to respond to the ranking member who would not allow you to finish your sentence.
Russell Vought
When you have a new administration, thank you Congressman, when you have a new administration, they put the previous documents, press releases into an archive version of the website. That is exactly what we have done. It can be found on the website. It is all there. If people want to go back and look at what we think are flawed guidance documents from the Chopra directorship, it's all there under archive.
But it is not going to be representated as our administration's view with regard to what the policies and rules and regulations are of this administration.
Bill Huizenga
Okay, I'm going to skip my setup and just get right to my question. How can the CFPB ensure it meets the statutory objective of protecting consumers from genuine misconduct while also ensuring that its supervisory and enforcement activities do not unnecessarily discourage responsible lending to the small businesses that drive local economies? You talked about the 360 billion dollars in regulatory costs to consumers. We know that that an unclear direction simply just causes people to say no on their lending.
Russell Vought
Well, I think we took a long time to work on our supervisory and enforcement guidelines. We're very proud of them. It focuses on actual victims, identifiable harm that has material and measurable damages.
Russell Vought
Yes, and so our my view would be to turn those into law. And so everything that we've done, turn it into statutory requirements that build on the work that we've done.
Bill Huizenga
All right, an effective regulatory system should motivate entities to detect and fix issues as you've been talking about, and while working with regulators to prevent consumer harm. Institutions are more likely to invest in compliance and even frankly self-report violations if cooperation is rewarded and not penalized. You talked a little bit about that. Some stakeholders have argued that CFPB's approach lacks incentives for self-reporting, which may actually reduce transparency and slow corrective action. And I think frankly major reforms are needed.
For that reason I've introduced the Bureau Consumer Financial Protection Commission Act to reform the CFPB structure from a single director to a bipartisan commission of five members, making it more accountable, consistent, transparent, and trustworthy. And frankly this has been discussed for many, many years. It was a good idea then, it's a good idea now, especially if one is concerned with the lack of oversight that we just heard from from the ranking member. So in the meantime, how is the CFPB working to encourage a supervisory culture that rewards self-identification, self-correction, and good faith cooperation?
Russell Vought
Well, one of the things that we do is we reach out early and often if we see something that's either predominant in the customer complaint portal or if we are seeing it in the news. We reached out to Bilt when we felt that they were not making payments on behalf of the as a new credit card. We we ensured that they were going to then work to fix the problem. They were working to fix the problem. And there's examples like that, Congressman.
Bill Huizenga
Are there some additional statutory reforms that you'd like to see that could further incentivize that?
Russell Vought
Well again, I think to the farthest extent possible if you can write into the law the notion that we're after self-reporting, we're after remediation and reconciliation, that that is better than waiting on enforcement for many, many years that may not occur. That is a much better way of operating than to just assume that it's as adversarial as it has been.
Bill Huizenga
We've got a minute here. Given the 2024 Supreme Court ruling on Loper Bright, how is the CFPB approaching the exercise of its statutory authority? I mean that decision was very important and a reminder that major policy decisions should and frankly must come from Congress, not just through expansive agency interpretations.
Russell Vought
Well, it's obviously a very critical to our entire regulatory agenda as an administration. We don't want to go beyond the authority that you've given us. And that's one of the reasons why I think it's so important that you all are starting the hearing, the legislative process on reforms so that you can further spell out what should be a larger participant, for example. Those are the types of things that I think CFPB has way too much authority with regard to our ability to look at the law.
Bill Huizenga
Clarity. I think there needs to be clarity, transparency and understanding and predictability. That's what you need to be doing and I yield back.
J. Hill
Gentleman yields back. Chair recognizes the ranking member of our House Small Business Committee, Ms. Velázquez of New York, for five minutes.
Nydia Velázquez
Thank you, Mr. Chairman. Director Vought, last month the CFPB issued a statement suggesting creditors consider immigration status as a negative factor in an individual's ability to repay. It has been reported that the banking industry has expressed concerns about the burden of vetting customers for immigration status. Did the CFPB consult with creditors before issuing this statement, yes or no?
Speaker 16
No, we have worked with them throughout the process but we are looking at the law as we see it and we...
Nydia Velázquez
Your answer is no. Your answer is no. By the way, you know, Director Chopra, when he issued the 1071, section 1071 rule, he held more than 100 outreach meetings with financial institutions, trade associations, community groups and so on. And at the end, the members of the other side in this committee continue to criticize the implication and the impact that it will have on bankers, on creditors. But not this time.
The loss, so do you think, yes, how did CFPB consult with creditors?
Nydia Velázquez
No, I don't want to hear about 1071. We discussed it here too many times. Just answer my question, how many meetings did you hold with creditors?
How many times?
Russell Vought
I don't have that at my fingertips, but suffice it to say we do our work, we take input, but we're going to regulate based on what the law is and that's what we're doing with the ability to pay with regard to illegal immigrants.
Nydia Velázquez
Okay, what is the estimated cost of implementing this rule for the creditors?
Russell Vought
There is not a rule out there that has gone through a cost-benefit analysis because it's already the law, it's already the standard and we were simply overriding the policy guidance from the previous director that conflicted with the statute.
Nydia Velázquez
The loss of employment situation is significantly more likely to be a risk to a credit application than the risk of being an unauthorized immigrant. Do you think creditors should include whether an ICE agent that has shot an unarmed civilian on the street and therefore is likely to be charged with murder and the loss of employment as a factor in determining whether they have the ability to repay?
Russell Vought
We believe that illegal immigration is a serious problem in this country. I understand it's not a bipartisan view.
Nydia Velázquez
I am asking you if an agent, ICE agent, shot an unarmed civilian, if that should be counted as a determining factor of being having the ability to repay.
Russell Vought
Yes, Mr. Chairman, we have said that as a matter of our guidance that it is an important factor in the ability to repay if you are no longer in this country because of the illegal steps that you took to get into it.
Nydia Velázquez
Reclaiming my time, Mr. Chairman. I am making an outrageous statement to make the point that the CFPB statement on consideration of immigration status as a negative factor in an individual's ability to repay is equally outrageous and insulting. Director Vought, the statement you put out is not guidance nor is a rule. And I just heard the chairman when he was making his opening remarks saying that the CFPB is moving away from informal guidance unless you want to make a point, maybe instructed by Stephen Miller. So the statement at the end even clarifies that this statement does not have the force or effect of law.
It has no legally binding effect. I find it nothing more than another racist trope coming from this administration that seeks to threaten creditors and intimidate lenders and borrowers alike. You know what is the point? Cruelty. I yield back.
J. Hill
Gentlewoman's time has expired. The chair recognizes the chair of our task force on monetary policy, Mr. Lucas of Oklahoma, you're recognized for five minutes.
Frank Lucas
Thank you, Mr. Chairman, and thank you for being here, Director. I know many in this committee are heartened by your leadership at the bureau and the progress that we've made, particularly after your predecessor focused on the bureau of regulation by enforcement and advisory opinions rather than notice and comment with robust public feedback. Can you explain what the bureau is doing to permanently rescind some of the harmful rules of the past administration?
Russell Vought
Well, there's not a lot that we can do on a permanent basis without your help. And so I think that's a really important aspect of the humility that we're trying to bring to the conversation is we need Congress, not unlike what you did with the size of the agency, to come along and restrict our authorities. But we have changed the culture. We are dramatically lower, we're about half of what we were when we came into office. And so we are taking culture seriously so that there is nothing that has to swing back as a seesaw by virtue of it not being done right the first time.
Frank Lucas
Continuing with that line of thought, sometimes I hear often from the financial services industry is the need for durable and consistent regulations to avoid dramatic policy shifts from year to year.
Can you describe how the committee could partner with you to support those efforts and ensure progress, the progress that your leadership has made is truly lasting? See my theme here, I want to fix the problem.
Russell Vought
Well, I mean, we've put forward two big deregulatory initiatives that we hopefully are the type of things that are so credible, and we believe they are, that they last. There's obviously jump balls within a statutory framework, and where there are those jump balls of discretion, that is where the most danger is. Obviously, we would have concerns with the definition of abusiveness under UDAAP. That would be an example where I think that you would want to codify a better definition of it. I think you'd want to codify what is larger, larger participant.
I think you'd want to codify what consumer risk that is so significant that the CFPB should extend its authority. And so I would remove those discretionary jump balls as much as possible.
Frank Lucas
Director, on a similar topic, past abuses have made clear the need for increased congressional accountability and oversight over the bureau's actions. What structural forms would be helpful to ensure that in the future the bureau stays within its statutory mandate and is not moving beyond congressional intent?
Russell Vought
I think the biggest thing that you can do is put the agency under the appropriations process. The degree to which it doesn't have to come to Congress and have its budget approved and dispensed to is a massive, massive problem. And I think it's the number one thing that I would point the committee to.
Frank Lucas
The bill we've noticed today would include an adjustment to the supervision threshold to twenty-one billion dollars to account for economic growth. What would that adjustment mean for the bureau's ability to focus its supervisory function on larger institutions?
Russell Vought
I think it would help for sure. I think it would align with the risk basis of which we endeavor our supervision and enforcement activities. And so I think it's the kind of common sense reform that would hopefully ride on a reform bill.
J. Hill
Thank you, Director, for being here, and thank you, Chairman, for having this hearing, and I yield back.
Gentleman from Oklahoma yields back. Chair now recognizes the ranking member of our subcommittee on capital markets, Mr. Sherman from California, for five minutes.
Brad Sherman
It's incredibly refreshing to have someone from the Trump administration come here and talk about the role of Congress and congressional oversight. In so many other areas, this administration just flouts the law, the greatest of course being the War Powers Act. So in this one narrow area, we've got an administration that believes Congress should exist, and that is indeed refreshing. I want to focus on an issue that I think has been of concern to both sides of the aisle, and that is these quote credit report repair agencies. They have a tendency to overwhelm your agency with bot-created complaints by the literally millions.
In 2024, your agency announced, of course under prior administration, that it distributed one point eight billion to dollars to four point three million consumers hurt by credit repair scams. What action have you taken in your tenure to crack down on these companies and also to prevent them from overwhelming your website?
Russell Vought
Well, I thank you for the question. We have tried to build on some of the reforms that were previously put into place. For instance, creating an account with a password, having a verified email. We've taken the next step of verifying a mobile phone number. We've taken the next step of making sure that you can't have the same phone number for multiple different individuals.
And we've tried to remind people that they have to go to the credit reporting agency first. They have 30 days. They can get an extension for another 15 days. But that's the basis of the process. And hopefully that will be a major demand signal to the industry.
Speaker 22
Thank you. I need to move on. Mr. Vought, and wearing your other hats, and you've worn many in this administration, you've presided over the cuts to our foreign aid program that will result in 3 million deaths during this administration, mostly from health and not providing malaria and AIDS treatments and tuberculosis treatments. Also food aid. We see a defunding of the Council of Inspectors General on Integrity and Efficiency.
And we've seen illegal cuts where you just freeze the money for Alzheimer's research, women's health, cancer research, etc. Now, in your opening statement, you tell us that I think you come up with a figure as high as $370 billion that the CFPB has imposed in costs to consumers. That's really just the banks saying, "Oh my God, we don't like the CFPB, and we'll attribute all of our price increases to their existence." The Council of Economic Advisers does nothing to prove that these are real dollars, not imaginary dollars. In contrast, as you know, the CFPB prior to you had returned $21 billion to consumers, correction, $21 billion, yeah, back to consumers in monetary compensation, principal reductions, cancelled debt.
And what's more important, as long as your testimony is based on estimates, it must be tens or hundreds and hundreds of billions of dollars that the CFPB has saved consumers by deterring fraud, by deterring abusive practices. You know, there were some who wanted to defund the police. They were unsuccessful, but they would point to, well, how much did the police actually recover for the victims of crime? How many wallets were returned? That isn't the issue.
If you're going to defund the police, you look at what crimes are prevented and deterred. Now, the only person successful in defunding the police, sir, is you. You've defunded the police that protect us from crime in the suites while railing against crime in the streets. And the fact is Americans need to be protected from both. You have slashed your agency without any input from Congress.
Congress envisioned, because we were here, we wrote this bill, a robust agency. You've cut it by a third. You're in the process of trying to cut it by more than a third. You've cut enforcement by 80%.
J. Hill
Gentleman's time has expired, and I invite the director to respond to that question in writing. Thank you. Chair recognizes the gentleman from Texas, Mr. Sessions, for five minutes.
Pete Sessions
Thank you very much, Chairman. Director, welcome. I, in fact, find your leadership refreshing. I find your leadership balanced. I find your leadership addressing the over-regulation, overpowering by government.
You've brought up several examples of things that happen when oversight, when you come into banks or you come into areas about their oversight. I want to talk with you about some of the civil money penalties that have really taken place, that happened more before you got there.
Talk to me about these civil penalties and the use of those civil penalties. I've been looking on the website about how the CFPB does have discretion in these areas. What is this? Is it a weapon? Is it there to stop bad behavior?
Is it there to create something new? And correspondingly, once those penalties were made, money civil penalties, was action taken that changed results or procedures?
Russell Vought
One of the tools, Congressman, that CFPB has is administrative consent orders, which is essentially a way that CFPB can sue and settle over and over with entities and bring in additional contributions into the civil penalty fund, which has a use. We had at least one or two examples where a company that had done wrongdoing that we thought was valid did not have any money left, and we put money out from the civil penalty fund so that we could provide redress to consumers. But the extent to which the combination of the fund and the sue-and-settle authorities that CFPB has is one of those things that I would take a look at if I was in Congress.
Pete Sessions
So in other words, you believe that there may be a better balance if we look at that and see where we actually direct the CFPB on that?
I do.
Pete Sessions
Okay. Well, I think it's important for us and you to look at overregulation. Our friends on the other side didn't want to talk about 1071. 1071 is something that we became aware of early on. The banking industry became aware of it.
It took what was originally about 14 or 15 pages of regulation and moved it to 1,000 pages. It required banks or any lenders, whether they're dealing with minorities, to reassess and to ask all sorts of questions. I found that what it did is it by and large meant that banks did not want to offer loans anymore because of the extensive and rigorous process that it required, rather than some review stating the facts about where they believed there may be frailties in the marketplace. I note that you have now changed those rules and regulations. Have you had a chance to do any evaluation where you did a look-back compared to what might be the current results that are happening about making it better for banks, financial institutions to lend to minority or other types of businesses or people?
Russell Vought
Thank you, Congressman. When the rule went through OIRA review, which is obviously a new feature under this administration, it had a cost-benefit analysis. The benefits, $2 billion in lower regulatory costs, were obviously substantial. It's too soon to be able to see the on-the-ground impact, but I heard the same thing that you did with regard to the potential that we'd have fewer lending as a result of it. And just to put a fine point on the statutory basis for it, the statute required 13 data fields.
The Chopra directorship put forward a rule that had in the neighborhood of 80-plus data fields. We came up with a rule that did 16, and we believe for good reasons, because those extra three were tied into the underlying 13.
Pete Sessions
Right. And as a matter of fact, it would have put the person who was asking the loan, put them in jeopardy also of how they complied.
Russell Vought
Yeah. Another, another fact is 29 million paper hours of paperwork as a result of the last 15 years of CFPB. The 1071 rule that Chopra had done, it would have added much more paperwork, many more employees that these entities would have to do to do that paperwork.
Pete Sessions
Well, it came directly from the Texas Bankers Association who talked with all the members up here and they felt like it was not wise. You have made it more reasonable. Mr. Chairman, I yield back my time.
J. Hill
Gentleman yields back. I want to recognize the ranking member of our House Foreign Affairs Committee, Mr. Meeks of New York, for five minutes.
Gregory Meeks
Thank you. Mr. Vought, you've never been a member of Congress, have you?
I have not.
Speaker 21
And you were not a member of Congress at the time that Congress created the CFPB, were you?
I was not.
Speaker 28
And Congress then made and gave CFPB a statutory responsibilities to protect consumers from unfair, deceptive, and abusive financial practices. So I don't know if you know that, but I was here when it was created. That's the congressional mandate. Now, you took an office, an oath, I guess, as acting because you've not been or ever been confirmed to be the director, is that correct?
Speaker 20
I have not and I'm looking forward to being up with my time on first August.
Speaker 28
And I'm looking forward to that too. But you took an oath of office to faithfully execute the laws that Congress enacted. Is that not correct?
And we've done that.
Speaker 28
Not that you've enacted, but that Congress have enacted. And in your testimony, you've said, "We've sought to downscale this agency to the maximum extent possible," and I end quote. Then you said you don't believe that the CFPB should exist in its current form, which is the form of which Congress created, not you, or the Dodd-Frank Act, which is still the law. You may not like it, but it is what Congress set forth. Congress has never relieved the bureau of its statutory responsibilities.
So, Mr. Vought, let me, the first thing is, your job isn't to run on a temporary basis, as you have, the CFPB as you wish. It is as the Congress has set out statutorily for it to be done. Your job is to be faithful to administer the CFPB that Congress created. But that's not what you've done, sir. You've accused the CFPB of, and I quote, "advancing a radical political agenda."
But Mr. Vought, aren't you the creator of Project 2026? And you're trying to put that in place here, which is a radical political agenda? Aren't you doing the exact same thing? Is that's what you're doing? You are putting forward Project 2026, a radical political agenda, and trying to utilize it in the CFPB, which is not authorized by the United States Congress?
Sir, under your leadership, the CFPB has dropped enforcement actions, cut its workforce, and made major operational changes. Mr. Vought, your lawyers, I mean, and you've done this being a non-confirmed person.
And your lawyers have even argued in court that major decisions about the Bureau's workforce and operations should wait, shouldn't be on you temporarily, but your lawyers said should wait for a Senate-confirmed director because they carry greater legitimacy. I mean, your lawyers are actually arguing that you don't have that legitimacy. That's their case. That's what they said in court. It says it's not legitimate when they are made by someone not confirmed by the Senate.
So your conduct, sir, is directly inconsistent with the position of your own lawyers of what they took in court. So you described the CFPB as an un-serious agency in your testimony. Do you believe that what you and Elon Musk did with Doge at the CFPB reflected seriousness? So that was un-serious and not what the American people would expect from their government. Congress never authorized Doge to carry out the CFPB's mission.
Congress never gave Doge authority over consumer financial protection. Yet on your watch, sir, Doge gained access to some of the CFPB's most sensitive consumer and supervisory information that I call that un-serious and that reckless, sir. Your testimony mentions several things. I'm out of time, but sir, I'm glad you're leaving. I yield back.
J. Hill
Gentleman yields back. Chair now recognizes the chair of the Subcommittee on Financial Institutions, Mr. Barr of Kentucky, for five minutes.
Andy Barr
Director Vought, let me offer an alternative perspective from my friend, the gentleman from New York. I wasn't a member when Congress passed the Dodd-Frank Act. Candidly, everyone knows I would have voted against the Dodd-Frank Act had I been here at the time, but I am a member of Congress today. And the fact of the matter is, you're not disregarding the statute. The statute gave you, as the acting director and any director, enormous, enormous power, unaccountable from Congress.
That was the precise design of the Dodd-Frank law in creating this Bureau. And so to the extent my friend from New York has a problem with you exercising the enormous discretion that Congress conferred upon you, it's his fault. It's the fault of the authors of the Dodd-Frank law. That is precisely why we have attached to this hearing a reform package that should be bipartisan if anyone wants to provide accountability to the Bureau, if anyone wants to rein in your discretion that you have exercised lawfully. It should be the Congress on a bipartisan basis.
So whether it's Richard Cordray or Kathy Kraninger or Chopra or you, sir, we have given to you, my predecessors have given to you in the Dodd-Frank law, all the powers that you are now exercising. So if my friends on the other side of the aisle have anyone to blame for the actions that you have taken, they need to look in the mirror because they have given you the power that you have exercised here today. That is precisely why we have offered this reform package today. Director Vought, over the years, many stakeholders have expressed concern that the CFPB's civil investigative demand authority has been exercised with limited transparency and few meaningful procedural safeguards, making it difficult for recipients to understand the basis for an investigation or to challenge overly broad requests before incurring significant costs.
Those concerns undermine confidence in what should be a fair and objective investigative process. It's why I introduced HR 1653, which would strengthen the procedural protection surrounding the CFPB's use of civil investigative demands while preserving the Bureau's ability to investigate legitimate misconduct. Could you discuss how the CID process was abused under your predecessor and how greater transparency and due process in the Bureau's CID process can strengthen both public confidence in the agency and the effectiveness of enforcement efforts?
Russell Vought
Thank you, Congressman. I mean, when you have a financial regulatory entity that views themselves as a prosecutor and advocate, and they have the tools of the civil investigative demands to be able to open up and get any information they want and go on fact-finding missions, which is what the supervision aspects of the job often look like, you have great opportunities for mischief. And I think your bill is the kind of thing that needs to be done to bind the agency. And rarely do you have an agency head that comes to you and says, "Please bind our agency in as many ways as you possibly can because of the degree to which it has acted abnormally."
Andy Barr
Well, under your predecessor, the CID process was a fishing expedition. There was no requirement that they had to actually identify suspected illegal conduct. They just went in and they harassed law-abiding American companies and bankrupted them with this Gestapo tactics. That's why we need my bill and to reform CID and put some modicum of due process into this system. I invite my friend from New York to consider my legislation that would subject the Bureau to the congressional appropriations process.
To the extent he thinks you're doing a bad job, again, it's the authors of the Dodd-Frank's law fault because they put you beyond the congressional appropriations process. Could you discuss how bringing the CFPB into the annual appropriations process would strengthen the Bureau's stewardship of taxpayer resources, improve accountability to Congress, and frankly, give my friend, the gentleman from New York, more authority over you?
Russell Vought
It's the most important reform that you can do, full stop. The extent to which an agency has to come to Congress and justify the activities that it does in conjunction with the resources that it is requesting from the appropriations process. I do not believe, I do not understand why Congress would ever provide funding to an agency outside of that process. And so it has led to, I think, a cavalier attitude and a swagger on behalf of the CFPB that is ultimately what we've been trying to wind down.
Andy Barr
Well, I understand that my friends on the other side of the aisle are disappointed in your leadership. I was disappointed with your predecessor's leadership. If we care about making this agency accountable and less partisan, let's join together in a bipartisan manner and reclaim the power of the purse over this agency. I yield back.
J. Hill
The Chair recognizes the ranking member of our subcommittee on digital assets, Mr. Lynch of Massachusetts. You're recognized for five minutes.
Stephen Lynch
Thank you, Mr. Chairman. Director Vought, in 2023, the Department of Justice and Treasury reached a $4 billion settlement with Binance after the company willfully violated US anti-money laundering and sanctions laws. Binance had failed to safeguard its platform against terrorist organizations, ransomware attackers, and sanction actors in Iran, North Korea, and Syria. In March 2025, Binance wrote the code behind World Liberty Financial USD1 stablecoin. That's the crypto company predominantly owned by President Trump and his family, his sons.
Now, Binance also promoted the product to 275 million customers, and recent financial disclosures by the President indicate that he personally made $263 million on that deal.
Two months later, the UAE, United Arab Emirates state-owned investment firm MGX issued USD1, this is that the Trump stablecoin, to make a $2 billion investment in Binance, giving President Trump a direct financial stake in the very exchange, Binance, that he had responsibility for monitoring for for the previous money laundering. In November 2025, President Trump pardoned the CEO, Changpeng Zhao, who was the CEO of of Binance. Again, with the recent disclosures that we've received and and also supported by blockchain analytics data shows that over 1 million investors, these are consumers, these are the folks that you're supposed to be protecting, lost over $3.8 billion on the Trump meme coin, which has lost 90% of its value, while Trump has reaped over $1.4 billion in personal gain. All of that has raised massive legal issues for for those consumers who you're supposed to be protecting and and those are matters well within your jurisdiction. In addition, there are issues of abuse of power, improper emoluments under the Constitution, self-dealing, conflict of interest.
So, given your responsibility for protecting consumer, is any of that worthy of an investigation by your agency?
Russell Vought
This administration has the highest ethical standards. I would refer you to the statements made by the Trump organization that all investments are made by third-party financial institutions with modern technology.
Stephen Lynch
I'm asking you if if any of that, any of that, you know, the president getting $1.4 billion, the consumers that you're supposed to be protecting lose $3.8 billion, 90% of the value is gone, the president obviously promoted this meme coin as he was coming into office, none of that, none of that warrants an investigation, is that what you're telling this committee this morning?
Russell Vought
No, there is nothing that we have done that is a conflict of interest. This administration has the highest ethical standards with regard to that.
Stephen Lynch
Whoa, whoa, whoa, you're talking like we is you and the president. You're supposed to be the cop on the beat at CFPB. You're supposed to be protect it should be we the consumers feel or we the consumers see this, not you and the president. He he has scammed these the $3.8 billion that that these consumers lost. That that's what you should be policing.
That's where you should be investigating. You shouldn't be defending the president's deal, you got a responsibility to investigate. That's that's what we all did when we created the CFPB. So you're saying there's nothing here, none of that, the gain of the president, the pardoning of of Changpeng Zhao, the fact that that the UAE has used the Trump stablecoin to to invest in Binance, giving the president, you know, billions of dollars in in personal financial gain. You don't think there's anything and and the harm to the consumers, that's the key here.
Consumers lost $3.8 billion and you, sir, are responsible for protecting them and you don't think there's any any need for an investigation, is that what you're telling me?
Russell Vought
I'm not going to rely on the extent to which fake newspapers portray the events that you're describing.
That's what investigations are for.
J. Hill
Gentleman's time has expired. Just a reminder to both sides of the aisle, all members of the committee are reminded to observe the principles of decorum and courtesy in debate, House of Representatives and its committees. Members are reminded to direct their remarks to the chair and not to speak unless properly recognized and avoid engaging personalities or impugning the motives of another member or of the president. Chair now recognizes the chair of the House Small Business Committee, Mr. Williams of Texas, for five minutes.
Roger Williams
Just identified. Thank you, Mr. Chairman, and thank you for being here today. I'm I happen to be a car dealer back home and our industry got sucked into this by Cordray when we weren't even supposed to be in it. So your testimony is personal to our industry. Consumers deserve clear information about the financial products they use and at the same time the businesses that serve them deserve a clear rule so that they can comply with the law.
And as a small business owner myself, I understand how important regulatory certainty is. And when the agencies rely on enforcement actions instead of clear publicly available guidance becomes much harder for responsible businesses to understand their legal obligations under entering the marketplace. So Director Vought, how is the CFPB working to promote greater clarity and transparency regarding federal consumer financial laws, particularly its UDAAP authority, and so that responsible businesses understand that compliance obligations and consumers continue to receive meaningful protections?
Russell Vought
Thank you, Congressman. We've been very clear in putting out our guidance for supervision and enforcement on how we want to prioritize our tools. We want to find actual victims. We want to provide identifiable consumer harm, which we view as material and measurable. And we want to make sure that those are where we put all of our resources as opposed to some process that didn't get adhered to and in which the company came forward and self-corrected it.
That is where we believe we can put as much lead on the target on behalf of consumers, on behalf of the consumer protection laws that we have on this on the books in this country.
Roger Williams
Should be. As chairman of the Small Business Committee, I hear every day from entrepreneurs who rely on loans to hire employees, purchase equipment and grow their business. That many of these small businesses raised concerns about the previous administration's implementation of section 1071. We talked about that, small business lending rule, would impose significant compliance costs and ultimately make it difficult for lenders to simply extend credit. So recognizing these concerns, the Trump administration's CFPB revised the section 1071 rule by narrowing its scope, modifying certain data collection requirements, and extending complement compliance deadlines to reduce unnecessary regulatory burdens on lenders and small businesses.
So Director, can you explain how these revisions help right-size compliance requirements, improve access to credit for America's small business, and still ensure the CFPB fulfills its statutory responsibilities?
Russell Vought
Sure, Congressman. I mean, if you load up the regulatory burdens on lending and require for every small business loan 80 data fields to be filled in, none of which is relevant for the purposes of providing those kinds of loans, you've you've increased the cost of doing business and you're going to end up having fewer small business loans, which I don't think anyone in this this room wants. So that is the reason why we prioritized that rule with you all and we're very proud of our final product.
Roger Williams
Should be. The role of the CFPB is to enforce federal law, not to delay the work of financial institutions with burdensome mandates. Currently, we're fixing the disjointed framework where multiple agencies have overlapping jurisdiction overseeing the same institution. This often creates excessive regulatory demands and conflicting obligations for financial institutions. So Director, in closing, can you please tell me what the CFPB is doing to improve interagency coordination and minimize redundant oversight that burdens our financial institutions?
Russell Vought
Sure, we've tried to not get in the way of the prudential regulators.
We've tried to be very insistent that we stick to our portfolio and to acknowledge that the regulated entities have many different regulators. And we've tried to take that approach and provide clarity on that front.
Roger Williams
I'd just like to close by saying the cost of regulation is destroying, can destroy Main Street America, small businesses. And the less we can regulate some of these businesses, the better, better off we are. So thank you for being here today. Appreciate it.
J. Hill
Gentleman yields back. Chair recognizes our ranking member of our subcommittee on financial institutions, Dr. Foster of Illinois. You're recognized for five minutes.
Bill Foster
Yeah, well thank you. I wear several hats around here, among them one an actual manufacturer in this thing. We started a company that manufactures big part of the theater lighting equipment, and I could talk for a long while about how destructive this administration has been towards US manufacturing. But I'm also a PhD physicist. Okay, in your spare time between destroying federal regulation, regulators, you're also pretty far along in destroying the federal science enterprise.
Are you familiar with Omar Yaghi?
Am I familiar with what?
Speaker 25
Omar Yaghi. He's a Palestinian refugee. Grew up in Jordan. Came to the United States. Won a Nobel Prize.
And he's brilliant, charismatic guy. And he announced a few days ago that he is leaving the United States. And you know where he's going? China, where he will be leading the material science labs at one of their top universities. So my question is this: could you please tell your boss that his current score on Nobel Prizes is negative one?
Could you tell him that?
Speaker 27
No, I'm not going to tell him that because I think it's an inappropriate comment from you.
Speaker 23
I think it's a factual comment. Um, okay. Now, I was one of the few members who was still on this committee who was around during the global financial crisis, which was the result in large extent of abusive lending practices that caused dramatic failures in financial markets. Lenders made loans that were impossible to repay, and they knew it, with hidden fees, exploding adjustable interest rates, little or no evaluation of a borrower's ability to repay. These practices contributed to widespread defaults and debt that resulted in a seven hundred billion dollar taxpayer-funded bailout of the US economy, which is where you're heading us back down the track, the path you're heading us back down.
So this crisis caused Congress to create, among other things, the CFPB to address exactly the type of predatory lending practices that led to this crisis. The Congress giving it authority over non-bank mortgage lenders, credit cards, student loans, and other consumer lending products. Okay, maybe you think it's all fine now. But do you know how much debt the US households have, that how much debt they had prior to the peak of the 2008 financial crisis, total?
Speaker 23
No. It was twelve point six eight trillion dollars in 2008. Do you know how much debt the US households hold today?
How many?
Speaker 23
Eighteen point eight trillion dollars. There's more debt piled up on stressed American households than there was before the crisis. And we're unfortunately just as naked against the same sort of abuse that we had, as we had back then. We're facing, American families are facing significant economic challenges, all the while this administration and you specifically are attempting to cut ninety-five percent of the staff of the one agency empowered by Congress to protect them from abusive loans and predatory lenders. This is not to mention the mess that you and the President have gotten us into with tariffs and the conflict in Iran, you know, both of which are increasing cost and economic stress on Americans, and your administration has presented no intelligible strategy to end either one of these.
And so one of the underappreciated aspects of the pre-2008 economy was the lack of supervision over non-bank financial institutions. Before the crisis, many mortgages were issued by non-bank lenders, and that percentage increased from roughly forty percent in 2008 to around sixty-five percent today.
Pre-2008, no agency had authority to oversee non-bank mortgage lenders. This is the mortgage market that led to the financial crisis. Congress then gave the CFPB authority to oversee non-bank mortgage lenders, an authority that was not previously held by any financial agency. So do you know how many examinations the CFPB carried out on entities under its supervision since you've taken over as director?
Russell Vought
We have continued our supervision enforcement activities, and I would just say with regard to the non-banks, many of the legal theories that were used to supervise and enforce on non-banks were extrapolations that were quite novel from anything that you had ever passed. So our issue is not whether we're willing to regulate non-banks, the issue is the extent to which the legal theories and the statutes do not allow and need to go through Congress to the extent to which we need to have that debate here in the people's house.
Speaker 25
We did have that debate, we passed, I voted for and we passed the Dodd-Frank Wall Street Reform bill that gave you authority to deal with non-bank lenders. Alright, and when you got the administration, you're heading us down a path that is, I'm afraid, just going to send us right back. Now, you've made it abundantly clear you don't much care about ordinary Americans getting ripped off, but maybe you care about rich people. You remember Bernie Madoff? Okay, he scammed many, many very wealthy people, Republican donors that your boss cares about, okay?
And when we had hearing after hearing on how did that happen, it was because of underfunded regulators.
J. Hill
Gentleman's time has expired. Chair now recognizes the chair of our subcommittee on National Security, Mr. Davidson of Ohio, for five minutes.
Warren Davidson
Thank you, Chairman. And Chairman Vought, thank you for your multiple hats, but thank you for your work here at CFPB and answering our questions today. And I have a new plan for some of my time. I want to mention as a former manufacturing company owner growing businesses in Ohio, we're very thankful for President Trump's leadership, and that extends broadly across the administration. Because for the first time, somebody intends to do something about China's failure to comply with their commitment to be a market economy.
They've weaponized the rules of trade against the United States, and President Trump has made it a priority to grow jobs here in America. We've done that with the Work and Families Tax Cuts Act, we've encouraged, incentivized investments in America, we've done that with tariff and trade policy, and we've seen overwhelming commitments by countries and companies around the world to make bigger foreign direct investments in the United States of America than ever before. So far from the narrow experience of my colleague from Illinois, the broad market says that cash is flowing into the United States. And the reality is one of the Nobel Prize laureates that he has, despite their narrative that America is some insufferable, you know, terrible place, everyone in the world wants to be here. We let a million people in legally every year, and but we've cracked down on illegal immigration.
They said we need to pass laws to do that, we had laws, we didn't apply them. Now bringing that over into the financial sector and foreign investment, we've got Nobel Prize laureates who'd rather help China than the United States of America. That might be a sign we didn't get the immigration thing right. If you want to be part of helping China advance in a competition against the United States, good riddance, enjoy your time in China, please don't come back.
I hope Secretary Rubio makes sure you can't. So, those are the kinds of things that, you know, America's policies advance America's interests that are true across the board. And when I think about, you know, consistency there, I think about woke and weaponized government, and you certainly walked into an agency where that was off the charts. You were pushing initiatives through, or you weren't, your predecessor was pushing initiatives and predecessors going back to Richard Cordray were pushing initiatives that were at odds with not just law, but the interest of the United States. So could you highlight maybe some of the highlights of your experience there of how the agency was being abused from its proper purpose?
Russell Vought
Well, let me give you the example of Townstone, which was a small mortgage lending company in Chicago that was only 31 mortgages short out of about 879 of violating some arbitrary threshold under disparate impact standard, which we have now gotten away from and gotten rid of. And that began over a series of time. They used software to mine all of the public comments of this president of Barry Sterner, the head of Townstone, and they found out small portion that he criticized crime in Chicago, which were the very same statements that the Democrat mayor of Chicago had said. Well, they went after him for six to seven years, harassed him into paying a $100,000 fine, all wrong. No one ever accused him of discrimination.
They in fact did a survey of all of the people in the area that Townstone served, and not one person said that they believed that discrimination was occurring. All of that was done at the CFPB over a series of years, and when we went behind the curtain, we found that it escalated at key points about what different debates that we were having in this country, not unlike the George Floyd situation. So they were taking out frustration on Barry Sterner and his company because they could. And that is what we mean by a weaponized agency against the American people. And I can point to Cordova, and I can point to other examples of that, but that is what we found when we took control of the agency and what we've tried to put an end to.
Warren Davidson
Yeah, thank you. And sadly, that's been true across the whole spectrum, and I think, you know, in every committee of jurisdiction, we could have hours of testimony talking about how that's changed. And so thank you for, you know, being at the hub there. In your role, I guess, just could you give us a little clarity on where we're going on open banking? Because there was, you know, some effort there, some lack of statutory guidance, but there's clearly a role for calling balls and strikes there for whose property is whose in the realm of banking.
Russell Vought
We are very close to having a proposed rule. It is one of those things that I would like a newly confirmed director to be able to finalize, but we are very close. We will take our timing from the Senate as to the confirmation of hopefully Brian Johnson, but we are supportive of open banking as a concept and we're working hard on that rule.
J. Hill
Gentleman's time has expired. Chair now recognizes the ranking member of our subcommittee on National Security, Ms. Beatty of Ohio, for five minutes.
Joyce Beatty
Thank you, Mr. Chairman and Ranking Member. Director Vought, Section 1071 of the Dodd-Frank requires the collection of small business lending data to identify disparities in access to credit and enforce fair lending laws for small businesses. Yet under your leadership, the CFPB has sought to delay and significantly scale back implementation of this statutory requirement, even though women-owned businesses and minority-owned businesses have faced long-documented barriers to accessing capital.
Director Vought, Section 342 of the Dodd-Frank Act requires the CFPB to maintain an OMWI office to promote diversity in the Bureau's workforce, increase opportunities for minority and women-owned businesses in contracting, and access to diversity policies and practices of regulated financial institutions. However, multiple news reports have indicated that under your leadership, the CFPB has dramatically reduced the OMWI office as part of a broader workforce cuts, raising questions about whether the Bureau can still carry out these statutory requirements. Director Vought, I have heard directly from community development financial institutions in my state that they have experienced month-long delays in receiving funding that Congress had already appropriated through the CDFI funds. Those delays created uncertainty for lenders that finance affordable housing, small businesses, and underserved communities, even though Congress had already approved the funding. Director Vought, the recently released Comprehensive Housing Council Notice of Funding Opportunities is a drastic change from previous years.
The comprehensive funding is supposed to help families meet their housing needs, whether they are renters, homeowners, or homeless. Instead, under the Notice of Funding Opportunity, none of the CHC funding allowed by Congress can be used for pre-purchasing housing counseling at a time when there is a national crisis for first-time homeowners. In case you aren't aware, we passed a bipartisan housing bill because of this. Director Vought, the Small Business Regulatory Enforcement Fairness Act requires the Bureau to consult a small business panel. I am a small business owner for more than 30 years and to conduct a cost-benefit analysis before imposing rules with a significant economic impact.
Director Vought, can you tell me who is your OMWI director?
Speaker 31
Wait a minute. Because of time, I respect the chairman. I need a name or a yes or no. Do you know who your OMWI director is? Yes or no, do you know who your OMWI director is?
Speaker 42
The office of OMWI, which was put in by Dodd-Frank, Section 342 of OMWI.
What is the non-acronym?
Speaker 31
So that means you don't know. That's quite embarrassing. Mr. Chairman, I'm going to take my time back. Let me tell you something.
Happy to answer your question.
Speaker 31
No, you're not answering it because either you know the director and you know the person's name. I've had Democrat and Republicans over your department to come in here. Since someone mentioned Kathy Kraninger, she came, she testified, she supported OMWI. When we had Mick Mulvaney, he came and testified. Rich Cordray did, Chopin did, everyone before you.
It's embarrassing and insulting. This was created through Dodd-Frank. So let me ask you this: what is your justification for efforts to halt on the small business lending data on the collection which Congress explicitly requires?
Russell Vought
We're not halting it. We just did a rule on 1071 to make sure we go forward and implement the statute as you spelled it out in Congress.
Joyce Beatty
Well, that's not the information we had. So let me move on. What role did your, what role did you or officials at OMB play in delaying the CDFI fund distribution?
Russell Vought
We didn't delay it. We just authorized it to go out and apportion the funds to Treasury. They are 25 and 26 funds, which means they do not expire until the end of this year fiscally. But we have concerns with regard to that program. LGBTQ clinics that provide gender-affirming hormone therapy and serve clientele of any...
Speaker 31
I reclaim my time. You're not going to do this. You're not going to do this with me. Okay, I'm going to respect you and you're going to respect me. So I'll go back to OMB.
It is my suggestion that you send to me in writing who your director is and what are your plans to comply with Section 342 of OMB. And I yield back.
Speaker 30
Gentlewoman's time has expired and I appreciate the director's response to that question in writing. Chair now recognizes the gentleman from South Carolina, Mr. Timmons, for five minutes.
William Timmons
Thank you, Mr. Chairman, and thank you, Acting Director Vought, for being with us today and for your leadership in returning the CFPB to its statutory mission. This was a really good contrast because I think back to June 13th of 2024. I sat in this hearing with Director Chopra and we debated the proper role and scope of the CFPB. He repeatedly invoked, quote, the democratic rule of law, while arguing against Congressman Andy Barr's TABS Act and other carefully considered legislative proposals designed to provide greater accountability and stability for the Bureau. He opposed efforts to curb the CFPB's dramatic policy swings, even though those swings had created uncertainty and imposed real costs on American businesses.
At the time, I told him, quote, come January, whoever is sitting in your seat will have a very, very different view of the CFPB's role. My concern was that lasting policy should come from Congress, not from an agency whose priorities can shift dramatically from one administration to the next. Acting Director Vought, would you agree that your approach reflects a fundamentally different view of the CFPB's role? And can you explain to my colleagues across the aisle and to the American people why you believe this approach better serves American businesses?
Russell Vought
We believe this is the most democratic approach to how to ensure that we're going to be a good steward of the agency. Congress passed a law with regard to the CFPB and we are doing our duties under the law with regard to supervision, enforcement, regulation. And we tie very closely to the law. And so often we wish that Congress had given more detail when they wrote those laws, but we're certainly not going to take novel theories that the law does not countenance.
William Timmons
I couldn't agree with you more. As I said then, the wild swings in how the CFPB carries out its mission are not conducive to American competitiveness on the global stage. Businesses and consumers alike benefit when regulators provide consistency, predictability, and clear rules, rather than frequent shifts in policy. I told Director Chopra that when the administration changed, he and many of his Democrat colleagues would likely oppose the Bureau's new direction, as we can see in this hearing. That's why durable policy should come from Congress, not changing regulatory priorities.
I appreciate the work you and your team are doing to return the CFPB to its statutory mission and provide a more transparent, consistent, and accountable approach that benefits both consumers and the businesses in my district. Now let's turn to what comes next. One of the recurring concerns we've heard from banks and credit unions is the amount of duplication between CFPB examinations and those already conducted by the prudential regulators. The discussion draft before us would encourage a more tailored supervisory framework that relies on the expertise of those regulators while preserving the CFPB's authority to step in when real consumer risks emerge. From your perspective, how would a more coordinated supervisory approach reduce unnecessary duplication and allow the CFPB to better focus its resources on protecting consumers?
Russell Vought
Well, I think it's a vital piece of it. If you look on the back side of our supervision work, you will see a calendar that is open to all of the regulators, including the state regulators, so that when we have an interest in asking questions of a particular entity, we can align those with the event calendar of other regulators. And we think it's a really important part of the process to make this as easy on them as possible.
Speaker 34
Thank you for that. Do you believe that reducing overlapping examinations would free examiners to spend more time identifying bad actors instead of repeatedly reviewing institutions with established compliance programs?
William Timmons
The same principle applies to the Bureau's supervision of non-bank financial companies. The CFPB's resources should be focused where the risks to consumers are greatest, not spread so broadly that responsible companies face unnecessary uncertainty while bad actors receive less attention. How would the reforms in this discussion draft help the Bureau better prioritize its resources while giving responsible businesses greater regulatory certainty?
Russell Vought
We want to know where there are actual problems in our consumer financial markets. That takes examiners being freed up to focus on it, to look at trends, and we want to make sure they have the ability to do that, and I think the extent to which you're freeing us up to do that would be helpful.
William Timmons
One question, how often do employees at the CFPB work at 6:30 on a Friday afternoon? Is that a regular thing or is it more business hours, bank hours, 9 to 5?
William Timmons
I just want to point out that the last thing Director Chopra did before he left was send out a number of CIDs at 6:30 PM on a Friday. And that's the kind of it really just defines his legacy of using the CFPB in ways that was not intended to do. That's not consumer protection, that's just retaliation, and it's a good thing that we are moving in a much better direction. You just gave a great data point for why we did the humility pledge. Thank you, I yield back, Mr. Chairman.
J. Hill
Thank you, sir. Chair now recognize the ranking member on our task force of monetary policy, the gentleman from California, Mr. Vargas, you're recognized for five minutes.
Juan Vargas
Thank you very much, Mr. Chairman, ranking member. Well, I guess we can all agree on one thing. We're all going to be happy when you're gone, including yourself. And the reason for that, I think, that there's been a tidal wave of harm to consumers since you've been at the CFPB. A tidal wave.
Special interests are being protected and supported, just like you involved yourself in that getting that big one big ugly bill passed. And you said you were going to be draining the swamp, that's what you said you sounded here earlier too, they said we, when you talked either the royal we or you and the president are the same, you're going to be draining the swamp. Well, what's really happening, it's expanding. And it really is unfortunate. And you see this humility pledge, it's not a humility pledge, it's a surrender pledge.
And that's what you're doing, you're surrendering to large businesses. You don't have the consumers in mind at all anymore. And you make up numbers. You make up numbers, it's cost 300 billion dollars. No, real numbers is the money that went back to consumers that were getting ripped off previously under the other administration where you actually got money back when you were defrauded.
Instead you have this humility pledge, you go in with your examiners and say we're here kneeling before you big business, we're here for you, not for the consumer. That's what you're doing today. And again, you said yourself you're not going to be unhappy when you're not here, you're ready to leave, we're all ready to see you leave too. This this Bureau was created to protect consumers. And that's not what you're doing at all, in fact quite the opposite.
You're protecting big businesses. That's what you're doing. And and I was kind of curious, you throw out words like cavalier and swagger, the whims of an ideologue at the Bureau. I'm I did want to I was going to ask you if you didn't bite your tongue when you said that.
I mean, I don't know of a person who is more cavalier that has come before us, more swagger, or bigger ideologue. I mean, you seem to describe yourself well. I don't know if you were attempting to do that. With that, I'm just saying I'm I'll be very happy when you're gone, but unfortunately, I think we're going to find a bunch of crap happened. You're going to see redlining happen.
You're going to see discrimination. You're going to see fraud. You're going to see that businesses got away with a lot of things because you weren't the cop on the beat. You weren't at all. In fact, you were there for the businesses, for the big businesses, for the big special interests, you weren't there for the consumers.
With that, Mr. unless the ranking member wants me to yield some time, that's what I wanted to say.
Speaker 37
No, I think I said what I meant and I think I said enough. With that, Mr. Chair, I yield back.
J. Hill
Gentleman from California yields back and the chair recognizes the gentleman from Georgia, Mr. Loudermilk, for five minutes.
Barry Loudermilk
Thank you, Mr. Chairman. Mr. Vought, we appreciate you being here today. You know, the CFPB was designed, no matter how flawed that design was, was to protect consumers. But I think it's been clear to many of us who have sat at least in the dais and on this side of the room that for many years that was not what the CFPB was doing, but it was a name and shame organization against businesses and industries that it determined or its director determined they did not like. That is not the design, that is not the constitutional design nor the design of what any government agency should be.
And so our constitutional system entrusts Congress with writing the laws and the executive branch with faithfully executing them. That distinction is fundamental to ensuring that significant policy decisions are made by the people's elected representatives rather than by administrative agencies, which is what we've seen within CFPB for many years is writing their own rules and proceeding with their own agenda. Many have questioned whether the CFPB under the Biden administration at times interpreted broadly worded statutes in ways that effectively created new legal obligations beyond those Congress expressly enacted. Mr. Vought, do you agree that whether intended or not, that sort of behavior can erode confidence in both the agency and the regulatory process?
I do.
Barry Loudermilk
Thank you. Could you discuss how the CFPB is approaching its statutory authorities today and what principles guide your efforts to ensure that the CFPB faithfully executes the laws Congress has written without expanding its authority beyond those statutory limits?
Russell Vought
Well, we imposed a clear bar on doing any enforcement that is really a back-end way to do regulation. We dismissed those cases and as a result, we are very much in line with our priorities that are looking for consumer fraud that's identifiable and measurable, but not to do it in a way that we're using a novel legal theory to interrupt federal bankruptcy laws or some other aspect of statute that was never given to the CFPB.
Barry Loudermilk
Well, thank you for that. And I think what I hear, especially from the other side, is that operating within the scope of what the agency was legally authorized to do is somehow abandoning consumer protection.
We have seen, many of us who have been here for a while have seen how the CFPB continually, I wouldn't even call it mission creep, but mission advancement, would start regulating areas they were specifically prohibited from being into. One hallmark of good government is that agencies fully consider both the benefits and the costs of their regulatory actions before imposing new requirements on the American people. Consumer protection and economic opportunity are not mutually exclusive. In fact, regulations are most effective when they are carefully tailored to address demonstrable consumer harm while avoiding unnecessary costs that may ultimately be borne by consumers through higher prices, reduced access to credit, or fewer financial products. That principle is reflected in the Transparency and Cost-Benefit Analysis, my legislation to require CFPB to conduct more robust economic analysis and publicly evaluate the expected costs and benefits of its significant regulatory actions.
Greater transparency not only improves the quality of an agency's decision-making but also allows Congress, regulated entities, consumers, and the public to better understand the rationale underlying the CFPB's action. Mr. Vought, from your perspective, how would you require more rigorous cost-benefit analysis and greater transparency in the rulemaking process to improve CFPB's ability to create effective regulation?
Russell Vought
Great question. First of all, we're already doing it because we have brought in so-called independent agency regulations into the OIRA structure. So we are already doing that now, but it would be very valuable to have that be a requirement so that you would force the agency to do that even if there was a different administration that doesn't have the same view as it regards to independent agencies.
Barry Loudermilk
All right. Well, as I'm running short on time, I just want to say thank you for the job you're doing. I hope that you continue leading this direction to where it will truly represent consumers with that, Mr. Chairman, I yield back.
J. Hill
I thank the gentleman from Georgia. Chair recognizes the gentleman from Illinois, Mr. Casten, you're recognized for five minutes.
Sean Casten
Thank you, Mr. Chairman, and thank you for being here today. I want to just first flag that there's an intellectual inconsistency at the heart of your testimony today. You've said multiple times that the CFPB under your predecessor was a political agency and you've opposed the fact that Congress specifically made CFPB independent to isolate it from political pressures. You can choose one but not the other. I'm not asking for your opinion on that because your opinion's wrong.
The, we chose to isolate it from political pressures and we chose that in a political process in the best sense of the word. The job we have is political because balancing equities in a democracy is a political choice. When you drive home today and you fill your car with gas, you will pay the listed price for gasoline, not the price that the gas station thinks you can afford to pay because we passed a law that protects consumers against the political interests of a more powerful set of players in our economy. You may politically believe that you should stand with bullies against the bullied. You may politically believe that you should favor the powerful over the weak and the merciless over the meek.
Those are political choices that you make. We made the CFPB independent to protect us from that. And I want to, I'm not asking for, I will let you know when I'd like you to speak. Let's quantify some of the pain you have created on our society because since you have come in, the CFPB has voluntarily dismissed more than 20 enforcement cases that would have returned three and a half billion dollars to consumers who were ripped off or defrauded. Examples of a couple of those, these are all from the CFPB website.
The, you abandoned a lawsuit against a bank that mistreated seniors and disabled customers. A disabled woman who had tried to get a replacement card on the CFPB website said this left her unable to pay her rent and forced her to take out an 800 dollar loan. You eliminated an order against a credit union that had charged service members, veterans, people who have served our country, who've risked their life for our country, Department of Defense employees with 80 million dollars in illegal fees.
One service member said those undisclosed charges were a huge part as to why I had to file for bankruptcy. So my question right now for you as the director of the Consumer Financial Protection Bureau, what is your message today to the active duty service members, the veterans, the disabled folks, the senior citizens, the consumers who do not believe they have an advocate in your office anymore? Why should they trust you?
I don't agree with your characterization.
Speaker 45
I'm asking what your message is to the people who wrote those messages on the CFPB website and said I need help. Do you not care about them?
Russell Vought
We go around to military bases, we do this financial literacy all over the time.
Speaker 43
Anecdotes are not data. Three and a half billion dollars is data. You claimed a moment ago that the CFPB has been a net cost to society.
Russell Vought
You just used an anecdote against me, now you're saying that anecdotes are not data?
Speaker 46
Three and a half billion dollars is data. All of those cases that were dropped were data. You said a moment ago that the CFPB is a net cost to society, but you know that for every dollar that the CFPB spent, it returned $3 to consumers. You claim to be a fiscally responsible guy. How does abandoning efforts to provide billions of dollars in financial remedies and just turning this agency into a net cost consumer, how does that help consumers?
How does that help America?
Russell Vought
We cut the agency in half and returned $400 million that we didn't need to draw from the Treasury, from the Federal Reserve.
Speaker 46
To who? Sir, you understand that the United States economy actually has a private sector? When you take $3 from consumers to save a dollar in the federal government, I'll give you a second, the math don't match.
Russell Vought
I'm not going to concede the framework that suggests that all of the cost being put on by the agency...
Speaker 46
That's because you are lying. Have you, my goodness, you are smarter than this. You've said previously that the CFPB is a victory for the little guy, all your cuts. Is it your position that the majority of these terminated settlements were initially brought by mom and pop against mom and pop companies that you've protected small businesses through your actions?
Russell Vought
The majority of these were based on enforcement actions that we did not have the authority or were inconsistent with our guidelines that we have put forward.
Speaker 46
Okay, so the beneficiaries, according to Bloomberg, 70% of the beneficiaries from your cancelled settlements were firms that had more than $500 million in annual revenue, listed on the S&P 500. That's who you've protected. That's a choice. Last question, the ranking member had talked about some of what happened with DOJ. According to court filings, you sent an email granting DOJ employees unfettered access to 40 different CFPB systems containing PII data.
That's in the court filings. What role did you play in enabling people to illegally access confidential information with people's social security numbers who were in the CFPB system?
Speaker 44
I will say generally as the director of the agency, I was in charge of the administration being able to do its job at the CFPB.
J. Hill
Gentleman's time has expired. Feel free to answer that question in writing in detail, gentleman's time has expired. Chair now recognizes the gentleman from Indiana, Mr. Stutzman, for five minutes.
Marlin Stutzman
Thank you, Mr. Chairman, and thank you, Director Vought, for being here. And I want to say thank you for your humility today. You're taking a lot from the other side, which I think has been quite disturbing, especially my friend from California who's now left. I know him, and I know you, and I believe you both are good, strong, honest people who could probably work a lot of these things out rather than making a wild accusation from the dais.
I'm going to miss seeing you there. The other thing and I'm kind of curious if anybody on the other side of the aisle has actually read the CFPB humility and supervisions pledge. I looked it up. And I think if they were on the other side of the desk, if CFPB walked in to see them, they would be happy to hear the pledge that is made because just a couple of these points, the upcoming supervision examination cycle is going to be fundamentally different from the prior ones under the former Director Chopra, which bringing up Mr. Chopra, former Director Chopra made the agency political, pretending otherwise is a classic attempt by the other side of the aisle is trying to rewrite the history. And so I find it pretty rich coming from the people who defended Chopra constantly that he was at the White House every other week pushing the Biden political agenda.
Would you agree with that?
Russell Vought
I believe he certainly was a political appointee. He was nominated by the Biden administration, and he was a policy official for that administration. And honestly, that's what democracy is about is policy officials that come in with an administration doing the work of the executive branch based on an election.
Marlin Stutzman
Well, I want to go on back to the supervisions pledge. For this round of examinations, there will be greater transparency regarding the process and clarity regarding expectations. I think that's what we're all concerned have been concerned about from CFPB from the very beginning, that this is a little empire under itself that has very little accountability, that with the right person to accomplish an agenda without accountability is what the other side of the aisle wanted rather than actually holding them accountable to be sure that the people that it regulated were protected. And so it's easy for them to make out those who were regulated by the CFPB as the boogeyman when actually they made life more difficult for those who they were saying they were trying to protect. I think one of the most troubling examples of the CFPB overreach under prior leadership was the Townstone case.
In this case, CFPB advanced a novel legal theory that sought to expand the Equal Credit Opportunity Act beyond its traditional purview to regulate speech and marketing directed at prospective customers. Many view that move as another example of the bureau attempting to rewrite the law through enforcement. I was very pleased to see the CFPB under your leadership seek to vacate the final judgment citing infringement on the defendant's First Amendment rights. Looking back on the Townstone case, what do you believe it says about the enforcement philosophy of the previous leadership and how has your approach differed?
Russell Vought
It has differed starkly. Townstone was one of the best examples, not the only example, of the extent to which we saw direct evidence, particularly when we did the oversight within the agency of the way that they were ratcheting up the pressure on this particular mortgage lender because he had a podcast that was concerned with crime. And he had made comments that were basically the exact same thing that a Democratic mayor of Chicago had made, and yet they went after him for six to seven years in an attempt to ruin him. He ultimately settled for a hundred thousand dollars. We tried to overturn it.
We were unable to in court, but I was very proud to try and to call on behalf of the agency and to apologize to Mr. Sterner.
Marlin Stutzman
Thank you. And then finally, do you share our concerns that the current Dodd-Frank era statute and structure make the CFPB more susceptible to being weaponized again?
Russell Vought
Yes, because you do not have to come and ask for the resources from Congress each and every year to remain accountable to the American people.
Thank you. I yield back.
J. Hill
Gentleman yields back. The chair recognizes the gentlewoman from Massachusetts, Ms. Pressley, for five minutes.
Ayanna Pressley
Director Vought, I chew him, I'm glad that you're leaving. Sadly, your harm will remain for generations to come. I've every reason to believe that history will judge you harshly, especially in that you were a key author of Project 2025, again, implications that will be felt for generations. Like this. Five hundred billion dollars.
Director Vought, that's how much medical debt Americans hold. In fact, many families have medical debt over fifty thousand dollars. Now, that may not be a lot of money to Republicans like Trump, who quote, don't think about Americans' financial situation, but that is a lot of money for most people. This is debt people accumulated during the most challenging times in their lives, like battling cancer or recovering from an accident. The Consumer Financial Protection Bureau under Biden issued rules making sure that medical debt would not be reported on credit reports and put guardrails around how that debt can be collected.
Common sense things, like companies not being able to come after you for bills you've already paid. Now, to be clear, these kinds of protections were supported by families throughout the country, Director Vought, in rural communities, in urban communities, in suburban communities, and in Democratic and Republican districts. But Director Vought, you took that away when you rescinded those rules. Director Vought, give me one reason why companies should be able to harass cancer survivors to collect more than they owe for a medical bill.
Speaker 62
Well, they shouldn't be able to harass and we have laws on the books that, but the rules that we changed were specifically...
Speaker 64
Give me one good reason you rescinded the rule where medical debt would not have been reported on credit reports. Give me what, you don't have one good reason. Moving on. There is not one good reason. You claim, you avow that you are a self-proclaimed Christian nationalist, so I'm sure you spent some time in Sunday school.
That's a pejorative in your...
Speaker 64
I'm sorry, did you happen upon a scripture that said, thou shalt make their neighbor poorer, hungrier, sicker, and less safe? Because that's actually what you've done. I didn't ask you to speak. This makes no sense. You are as incompetent as you are cruel and callous.
Seriously, there are millions of families who have had to deal with an unexpected medical crisis, including yours, I'm sure, because cancer and illness do not discriminate. They don't care how fat your wallet is or what your zip code is. Everyone has been faced with some unexpected crisis that interrupted their life and destabilized their financial future, carrying the burden of caregiving, carrying the burden of sleepless nights, carrying the burden of debt unpaid, medical bills. But what upsets me most, please look at me, what upsets me most is the shame that people carry about that debt. So let me be clear to families throughout the country, the only people who should be ashamed of medical debt is the Republican party because they have obstructed progress for affordable healthcare at every turn.
And then they rescinded the rule that would have given you some relief.
Would the gentlelady yield?
I will not. This is my time.
Would the gentlelady yield?
Speaker 63
I will not yield. This is my time. And he's on his way out the door and he needs to know exactly the harm he's caused, but the American people deserve to know.
We should talk about Obamacare.
Speaker 64
I will not yield. Why are you speaking to me?
Why are you speaking to me when I didn't yield to you? Director Vought, you have gutted the CFPB. You have dropped settlements the CFPB brought against predatory companies that were supposed to provide relief to customers. $360 million to help people, gone. Americans are in dire need of financial relief, but Trump and his co-conspirators, his cult of co-conspirators, are making life worse for everyday people.
And I mean everyone: women, the disabled, young people, seniors, veterans, immigrants, and especially people of color who are most burdened by debt and predatory collection and reporting practices. That is exactly why I introduced legislation to stop you from hurting people, like getting rid of consumer protections related to medical debt. The American public deserves better. They deserve better than you. They deserve a CFPB director who puts the consumer protection in this, who actually gives a damn, instead of attacking hardworking families who are financially trapped by Trump's reckless policies.
Consumer protection should not be a partisan issue or a political game. You have dedicated your career to helping corporations get richer, making families sicker, hungrier, poorer, and less safe, and there is nothing Christian about it.
Speaker 65
The chair recognizes the gentleman from Tennessee, Mr. Rose, for five minutes. Mr. Rose, you're recognized.
John Rose
Thank you, Chairman Hill, and thank you, Ranking Member Waters, for holding this important hearing. And Director Vought, thank you for being with us today. Director Vought, if you'd like, I'd like to give you a little bit of time to respond to the attack on your Christian faith.
Russell Vought
No need to. She's using pejoratives that the other side has continues to use. That's okay.
Speaker 66
Well, thank you. And again, thank you for being here with us today. Director Vought, one of the recurring concerns surrounding the CFPB small business lending rule, implementing Section 1071 of the Dodd-Frank Act, has been the privacy implications associated with collecting and publishing detailed information regarding small business credit applicants. While Congress directed the CFPB to collect certain information, it did not adequately protect against the unnecessary public disclosure of information that could reveal sensitive details about individual businesses or their owners. Small businesses deserve confidence that proprietary financial information submitted to comply with federal law will be appropriately safeguarded and that transparency does not come at the expense of privacy.
That is the reason I introduced the Bank Loan Privacy Act to require the CFPB to clarify, through notice and comment rulemaking, how this information will be published while better protecting confidential information. Could you discuss how the CFPB can fulfill its statutory obligations under Section 1071 while ensuring that sensitive information regarding small businesses is protected from unnecessary public disclosure?
Russell Vought
We agree. We are going to, in the absence of your bill, we're going to put it through notice and comment to make sure the public has a chance to comment on it.
Speaker 66
Thank you. I appreciate that greatly. Effective regulation requires agencies to prioritize finite supervisory resources, and you've talked about that today, where they are most needed, frankly. Institutions with strong compliance management systems, histories of cooperation, and low-risk business models should not necessarily be subject to the same supervisory intensity as firms with repeated compliance failures or evidence of consumer harm. A risk-based supervisory framework not only allows the CFPB to focus on its greatest threats to consumers, it also reduces unnecessary regulatory burdens on responsible institutions that are making good-faith efforts to comply with the law.
Director Vought, how is the CFPB ensuring that its supervisory program is appropriately risk-focused, and what factors does it consider in determining where its examination and enforcement resources can have the greatest impact on protecting consumers?
Russell Vought
Thank you for the question.
We've done a lot of work to free up examiners by not requiring them to be in person for eight hours a day, eight examiners for eight weeks, that we believe, based on the travel budgets of the agency, were basically junkets. So we have both freed up examiners, and then we've been very clear about our priorities. We want to find identifiable victims with measurable material consumer damages, as opposed to just paperwork violations.
Speaker 66
Thank you. Um, you've had an opportunity to see up close and personal how CFPB has worked and how it has failed. And so I'd like your insights about how ambiguous regulatory standards coupled with an independent funding source and a single director structure uniquely insulate the Bureau from standard checks and balances, and why is comprehensive reform necessary to protect both consumers and the broader financial industry?
Russell Vought
Well, I mean, it's vital. This has been an agency that has had an edge to it, as I've said. It has been unaccountable to Congress and to the administration, and we have taken steps to deal with that. I think it's important that appropriations be a part of that reform. I think a single director is important because all of these agency heads work for the President of the United States, and some of these kind of bipartisan panels are a little bit more of a feature prior to some of the recent Supreme Court decisions.
So these are all really important reforms, and I really hope that you're able to pass some of them.
Speaker 66
Thank you, Director Vought. What is the purpose of the Administrative Procedure Act, and how does adhering to its requirements benefit consumers?
Russell Vought
The bottom line is that the APA allows the public to know the extent to which Congress or the administration will be doing the lawmaking that you've delegated essentially us by virtues of the statute that you've given us. And there's all manner of detail that goes into rulemaking that the public needs to be able to say, "Hey, this is going to have real costs, this part could have real benefits," and we need to know that before we make final decisions. It's why we do a proposed stage, it's why we do a final stage.
Josh Gottheimer
Chair now recognizes the gentleman from New Jersey, Mr. Gottheimer, for five minutes.
Thank you, Mr. Chairman. Director Vought, in your capacity as the director of OMB, you impounded numerous grant programs that directly impacted residents of New Jersey, including 16 billion in funds for the Gateway Train Project. I was proud to help pass the bipartisan infrastructure bill, which helped fund the most important infrastructure project in our nation. The impoundment of these funds put more than 95,000 jobs and 20 billion dollars at risk for our economy. Can you explain to me why you felt it was necessary to impound the funds that have had a direct impact on the lives of people in my home state, and I'm really curious to hear.
Speaker 67
They were not impoundments. They were going through a policy review as to the degree to which those contracts had been based on DEI preferences. The DOT has been in charge of that review, and I believe is moving forward on the project.
Josh Gottheimer
and sportsbooks. That's why I'm taking action introducing legislation that requires prediction markets and online sportsbooks to use facial recognition technology to verify users' age before they place a wager or make a trade. Director, shouldn't we be doing more to ensure that our children are not placing bets and gambling online?
Yeah, but everyone had signed off on it. There wasn't a DEI issue.
No, there was a review, there was a review that could not occur in the middle of that shutdown, but there was a review done.
What's that?
Russell Vought
That's not something we've taken a look at, but we're happy to take a look at any of the legislation that Congress has before it.
What do you think of the idea? Are you concerned with children?
Speaker 55
Okay. According to 2025 Internet Crime Complaint Center's Elder Fraud Report, the FBI received more than 200,000 complaints from victims over the age of 60, totaling approximately $7.7 billion in losses. This is an egregious number and financial scams that target our seniors need to be addressed. The ethos of the Trump administration has been fraud and abuse. Director, is the CFPB doing anything to crack down on this staggering fraud?
Russell Vought
We believe that there is fraud in the consumer financial protection markets and that's what our enforcement and supervision work is aimed at countering. We reject the characterization or I reject the characterization of how you described the administration.
Speaker 53
But how do you feel about elder fraud overall? You think it's an issue we should be spending more time on?
Of course.
Speaker 51
Right. And has that been something that you've made progress on during your period of time?
Russell Vought
It's certainly within the degree of things that we work at the CFPB.
Speaker 56
I think Representative Wagner and I are working on a piece of legislation called the Financial Exploitation Prevention Act, which passed the House of Representatives in June of 2026. I'd really love you to take a look at it if you would.
Sure. Thank you.
Josh Gottheimer
The government, in my opinion, should responsibly and transparently put AI to work by cutting red tape. This includes speeding up permits, translating public meetings, and shortening the time Americans wait on services they need. It also remains important in my opinion that AI is utilized as a tool to ensure the United States remains economically strong in our ongoing competition with China, while of course protecting Americans in every which way. Director, in your capacity as the director of OMB, you're responsible for managing how the federal government uses AI. Do you mind talking a little bit about how you are directing federal agencies to responsibly integrate AI to ensure that Americans receive better services from their government?
Russell Vought
Well, we're encouraging them to use AI to do important work that they might be underway. We're sharing best practices with them from other parts of the agencies that we get a bird's-eye view of. We're pioneering it ourselves with regard to ways that we can assess what spending is consistent with the administration's policy agenda. So from a wide degree of perspective, we're trying to use AI and encourage it.
Speaker 57
Are you putting any guardrails in place as you do it? Like how are you to make sure that it's used the right way or that there's not threats to our critical infrastructure? Have you looked at that perspective?
Russell Vought
We have put out guidance over the course of this last year and a half and I'm happy to share some of those guidances with you.
Speaker 52
I'd love to learn more about best practices, where in government you see it working well, how it's made government more efficient, how it's cut bureaucracy. That'd be really helpful if that's something that we could follow up on with you.
Be happy to.
Thanks so much. I yield back.
Gentleman yields back.
Mr. Chair?
Yes, what is the gentlewoman seek recognition for?
Speaker 58
Thank you, Mr. Chair. I ask unanimous consent to include an investigative report from July 2026 by Protect Borrowers entitled A Loan in Every Cart.
J. Hill
Without objection, be included in the record. Chair recognizes the chair of our subcommittee on digital assets, Mr. Steil, you're recognized for five minutes.
Bryan Steil
Thank you very much, Mr. Chairman. Director Vought, thank you for being with us today. I want to start with a thank you. This committee passed legislation to provide consumer protection in the earned wage access space, passing my bill, the Earned Wage Access Consumer Protection Act. You and your staff provided helpful technical assistance and I just want to say thank you.
We've talked a little bit about the structure of the CFPB. And as you serve on this committee, the sway of how much individuals agree or disagree with the director of the CFPB seems to go with the political persuasion and their alignment with the administration. I think you're doing a great job, may the record reflect. But I think there are structural deficiencies of the CFPB.
You spoke to this, in particular the ability to sue and settle to try to drive a political agenda, but also to fund the CFPB. You spoke on this a little bit before, but in your position also as the chair the full, as director of OMB writ large, could you just comment a little further as to what the risks are of having agencies that have their own self-funding structure and can make decisions that impact the funding not just in this administration, but writ large on the structure Congress created.
Russell Vought
I think those, I think it's a profound issue. I think it's very important to not have the seesaw impact with regard to the extent to which you have such uncertainty with regard to a new administration coming on board and how it approaches some of these discretionary jump balls. So subjecting it to appropriations is massively important. And I just also want to say thank you for your work on earned wage access products. They're very innovative and we were happy to put out guidance along those lines.
Bryan Steil
Thank you. To follow up on the risk of the swings, we have seen attacks on our state-based insurance regulations. The CFPB I think has the opportunity to continue to build clear jurisdictional boundaries in this space. Is that something you're thinking about or looking at at the CFPB?
Russell Vought
We are not looking to invade the regulatory space of the insurance markets. That's something that is very entirely not ours.
Bryan Steil
I appreciate that. I think that's right. I think we're well served by our state-based insurance program. There's a lot of talk earlier about the actions to continue to root out waste, fraud, and abuse inside and the great work that's being done inside this administration. Vice President J.D. Vance, chair of the President's Fraud Task Force, was in Wisconsin recently joined by Dr. Oz.
There are big opportunities to continue to root out waste, fraud, and abuse. We heard some comments from some of my colleagues. Can you just comment broadly about the successful work that we're doing and that in particular the Trump administration is doing in rooting out waste, fraud, and abuse in some of our federal programs?
Russell Vought
Well, the President has made it an all-of-government effort. And certainly the Vice President is running the task force in ensuring that there are no bureaucratic hurdles to ensuring that we have the resources to go after it with investigations and CMS to pull the IG community to make sure that we're enforcing, even if there might be a reluctance on some fraud cases to not take it because it's, it might be viewed in small amounts. But we've taken the reverse view. We've taken that kind of a broken windows approach to fraud that I think is going to pay huge dividends. And we're learning what statutory reforms are going to be needed for you all to come along and give us additional tools.
Bryan Steil
I appreciate that, because I think that's really significant. It's actually, it makes me reflect back on the Vice President's visit to Milwaukee. We were highlighting a specific case of fifteen million dollars of fraud, and one of the reporters asked, you know, it's a drop in the bucket, it's just fifteen million dollars. And that is a really dangerous approach that we have seen some of our federal agencies historically take, and in particular under the Biden administration. I appreciate you and the administration the approach of making sure that we're actually holding people accountable for wasting taxpayer dollars.
There's significant waste, fraud, and abuse in a lot of these programs. And holding individuals accountable and making sure that individuals know that they're going to be actually held to account, that they're going to actually have to pay a price for stealing from taxpayers, but also from stealing from the individuals who these programs were designed to help. And so I appreciate all of your work, not only at the CFPB but at the OMB writ large. Appreciate you being here and testifying today. And Mr. Chairman, I yield back.
Speaker 70
Gentleman yields back. Chair recognizes the gentlewoman from Michigan, Ms. Tlaib, you're recognized for five minutes.
Rashida Tlaib
Thank you so much, Mr. Chairman. Director Vought, is it true or false that your agency has dismissed and terminated more than forty lawsuits and settlements against predatory companies?
These were not predatory companies.
Speaker 87
You reversed even settlements against Toyota, Navy Federal, Bank of America.
Yeah, yeah. Are you friends with Capital One?
With Capital One, no, I don't know.
Walmart?
Nope.
Zelle?
Nope.
Would you like to know why?
Speaker 77
Oh, sure, because it looks like the past directors, you're getting so defensive. You're not friends with them, I wanted to make sure it wasn't personal. You're not friends with them, right? It's a direct question. Who do you work for, Director?
President of the United States.
Speaker 77
No! You work for the people of the United States. You do not work for the President. You have legislation and laws that we passed as elected body members here. You do not work for the President.
Wrong! You take an oath to the people of this country and we pass laws that you are supposed to enforce. You do not work for the President.
Speaker 88
I think the founding fathers would have a different view, Congresswoman.
Speaker 81
I am so glad this is on record. You should be fired because you work for the people, not the President. None of us work for the President.
Speaker 77
I understand, I'm not, hey, I'm not, I actually don't contest that like you all do. Now, is it true these cases and others dropped lawsuits could have returned hundreds of millions of dollars to consumers?
Russell Vought
They could have also set terrible regulatory initiative and enforcement decisions.
Speaker 77
I'd like to enter into the record, Director Vought, a memo, Chairman, from the Protect Borrowers, the Consumer Federation of America, and Americans for Financial Reform Education Fund, because I want the American people to see all the lawsuits you filed. Without objection, it's in the record. You decided not to pursue those lawsuits. And Mr. Chair, it's important for the American people to know this. Is it true or false, before 2005, CFPB only dropped one enforcement action and never terminated a settlement?
I actually don't know.
Speaker 77
Yeah, you don't know because you think that you work for the President. You actually don't see what the agency was created for. Why do you think the agency was created, because of the President? Because Congress created the agency because of the awful financial distress that it happened on our American people. You can blink your eyes all you want.
Last year, Americans lost roughly 16 billion dollars to fraud. 25 percent increase from 2024, on your watch. The highest level on record, on your watch. In fact, CFPB has received more consumer complaints in 14 months than in the first 14 years of its existence, your watch. Director Vought, do you think it's just a coincidence that consumer complaints have reached an all-time high at the same very same time that your agency has pulled back enforcement and dropped cases, cut staff, and revoked guidance?
Speaker 77
Because you're friends with Bank of America, Walmart, Zelle? Are you friends with them? Do you work for them? I'm saying this because you dropped all these lawsuits. These lawsuits didn't come out of thin air.
It's because they did wrong.
Speaker 77
Oh, novelty. So all those complaints from our residents are novelty, they're not real?
Russell Vought
No, that's the consumer portal of which we look at very closely and have taken steps to make sure we know.
Speaker 77
Why, you know, I know you're not going to take responsibilities because look, the loan sharks, Wall Street, mega banks, and I'm telling you, it is killing all of our residents because they are, you've basically sent a notice, you know, like a signal out there, go ahead. You're undermining, they're like, you signal to scammers and fraudsters out there, open season for our residents, go for it. Go ahead and violate their consumer protections that we, the Congress, passed, not the President, the Congress passed and created this agency.
In May, CFPB deleted more than 2,000 pages from its website. These include consumer advisories, blog posts. You didn't do it?
Speaker 78
Okay, Russell. How is CFPB adhering to congressional mandated consumer protection mission by removing consumer education and other materials from its website?
Russell Vought
We did not remove materials from the website, we put it in an archived section of the website.
Speaker 76
So you didn't remove them, no, you're right, you archived the Know Your Rights for veterans? You archived it?
We archived the policies of the previous administration.
Speaker 77
You archived the Know Your Rights, Russell, for veterans. You guys can get all upset all you want. He doesn't work for the President. He doesn't work for Zell or Walmart. He works for the people of the United States.
Romance fraud is up there. You can laugh all you want, but that targets our seniors. Shame on you. Really, on your watch, complaints are up. You literally took money away from pockets of our residents.
You can blink all you want, you're going to, your legacy will be the fact that people got hurt under your watch because you think you work for the President and not the people.
J. Hill
The gentlewoman's time has expired and the chair recognizes the chair of our subcommittee on oversight and investigations, Mr. Meuser of Pennsylvania, you're recognized for five minutes.
Daniel Meuser
Thank you, Mr. Chairman, thank you, Director, and, you know, some apologies for the pejoratives, the, um, the hysteria, um, when, when there's no evidence or facts, very often people resort to name-calling. And they will fight like hell, as we know, for their big government, unrestricted, one-party socialist plan. But we have laws, we have the Constitution, and I think the, we and the American people are going to stop them. Um, CFPB had gross, under, under Chopra, under the previous administration, gross and illegal, I believe illegal, overreach. Um, I'd like to enter into the record an article from the ABA president titled The CFPB: A Regulator Gone Rogue.
In it, he states the Biden-Chopra CFPB promoted a red-tape-laced regulatory nanny state that threatened to de-bank millions of hardworking Americans by pushing them out of the banking system.
Daniel Meuser
Thank you, Mr. Chairman. And, you know, no matter how much you look for evidence for promotion of the previous CFPB, you can't find any. The only ones you can find is when you have the hysteria and the hostility of stating how, how wonderful they are, when meanwhile it was all about overreach, which was well beyond what their jurisdiction was. So, um, when they issued and you revoked, um, under this administration, 67 guidance documents, eight policy statements, seven interpretive rules, 13 advisory opinions, which community banks, large and small, and big banks thought were outrageous but tended to follow, thinking they'd, they'd get in trouble from that previous Biden administration, um, and the previous CFPB, when you revoked all of those, uh, those compliance burdens, why was this action absolutely necessary?
Russell Vought
Well, we believe deregulation, uh, where it is good for the country, for the economy, for consumers, uh, where it can lead to innovation, is the right policy, uh, direction to pursue. Um, and we were very proud to be able to, uh, President had given a goal of ten-for-one deregulatory initiatives to everyone, uh, and we were able to hit 67 and we're very thrilled with that, and, um, and that was one of the, the key parts of the first year.
Daniel Meuser
Okay, and you're, you're aware we, we issued the SAFE Guidance Act to, uh, assure banks that such guidance letters from a rogue CFPB director, uh, are not law. Do you think that was helpful, will be helpful?
Russell Vought
We should not be, uh, regulating with guidance. Uh, guidance is something that agencies have long used to avoid notice and comment, and as a result, the country doesn't have a chance to participate in articulating their concerns.
Speaker 79
The previous CFPB was sued by eight different trade groups, banks, credit unions, online lenders, small businesses, representing the entirety of the financial services industry. That's quite a pattern of, of evidence showing that they, they were beyond their statutory authority, wouldn't you agree?
Daniel Meuser
The resources and employees under CFPB have shrunk since January 2025. It's closed 76% of its open supervisory actions and resolved or dismissed the large majority of its enforcement cases. What has a smaller, more disciplined bureau been able to get done compared to what the prior, larger, very broad-scoped bureau actually produced?
Russell Vought
Well, we're both continuing our supervision and enforcement responsibilities, and we've been very set on not doing regulation by enforcement and dismissing cases that were either duplicative of a state regulator or there was not a ground in statute to be for us to have taken the original action as an agency.
Daniel Meuser
And CFPB was not alone. The SBA, for instance, you know, a tidy, tight organization advocating for small businesses with immense responsibilities, doubled in size during the course of the Biden administration. And I bring that up because just to show the bloatedness of where our government was going to go and where it would go again. It went from 1,700 employees basically to almost 5,000. Now we've brought it back to 2,200 under Secretary Leffler.
Are you seeing such efficiencies that have occurred there? And by the way, the number of business loans have doubled since the last year of the Biden administration of 2024 and into 2025, 2026, just over a year's period.
Russell Vought
So at the CFPB, we have gone from about $800 million spent in 2024 to right now we're about $465 million. We could go lower, but we're under a court order that does not allow us to go under. So our view is that the long-term steady state should be $357 million per year. And then you've certainly helped that by passing legislation to lower our cap.
Ritchie Torres
Chair recognizes the gentleman from New York, Mr. Torres, you're recognized for five minutes.
Thank you, Mr. Chair. Mr. Vought, you have repeatedly asserted that the President has the constitutional authority to impound funds appropriated by Congress. And so I have a few questions about your theory of presidential impoundment. Under your theory, could the President refuse to spend 100% of the funds Congress appropriates for the Department of Defense?
Russell Vought
I don't engage in hypotheticals, Congressman. The President has articulated a view that I agree with, that for 200 years, presidents had the ability to spend less than the appropriation, and in none of those cases...
Ritchie Torres
I'm going to move on to my next question. And could the President refuse to spend 100% of the funds Congress appropriates for the Supreme Court?
Russell Vought
And again, in those 200 years of presidents using those executive tools, none of those presidents did what you just asked.
I'm not answering your...
Ritchie Torres
Could the President refuse to make 100% of the entitlement payments Congress has mandated under programs like Social Security and Medicare? Could he impound those?
Russell Vought
Impoundment authorities are not relevant in the entitlement category.
No, it does not.
Ritchie Torres
Yeah. The founding fathers were familiar with the concept of impoundment, and if the founders had intended to give the President the power of impoundment, they would have said so explicitly. These were not shy men. Can you cite a Supreme Court case in which the court held that the President has the constitutional authority to impound funds?
Ritchie Torres
You're wrong, actually. In Kendall versus United States, 1838, here's an exact quote: "To contend that the obligation imposed on the President to see the laws faithfully executed implies a power to forbid their execution is a novel construction of the Constitution and entirely inadmissible." So it looks like the Supreme Court did speak on the topic 187 years before Project 2025.
In the spirit of originalism, I want to share some history with you. The British monarchy once had a version of the power of impoundment. It was called the suspending power. But the crown lost the power to suspend laws, including spending laws, under the English Bill of Rights in 1689. The American Revolution, as you know, was fought to overthrow the tyranny of the British monarchy.
Is it seriously your position that the founding fathers intended to grant a president like Donald Trump impoundment powers that the British monarch himself did not possess when the American people overthrew him 250 years ago? Is that your position?
Russell Vought
The founding fathers themselves spent less than the appropriations that they were given. For 200 years—
Ritchie Torres
I'm asking about impoundment. You have a theory of presidential impoundment that would make Donald Trump more powerful than the 18th-century British monarch that we overthrew.
Russell Vought
That's not true. And what I would suggest is that you study the 200 years of experience under presidents who had the ability to not shove the money out the door at the end of the fiscal year just because it had to be spent and therefore—
Ritchie Torres
I want to move on. Like many in your party, you suffer from CFPB derangement syndrome. And having you serve as the director of the Consumer Financial Protection Bureau is a bit like having a Pope who doesn't believe in Catholicism. It's an absurdity. And let's be honest, Mr. Vought, you weren't appointed by Donald Trump to run the CFPB, you were appointed to sabotage it in lockstep with Project 2025.
During the first term of the Trump administration, the CFPB undertook 12 enforcement actions in 2018, 21 actions in 2019, and 62 actions in 2020. By contrast, the CFPB in 2025 has undertaken almost no enforcement actions. And so even by the standards of the first Trump administration, enforcement has all but collapsed and the CFPB under your leadership has been an absentee regulator. I want to move on to cybersecurity. We live in a world where the Chinese Communist Party could develop an open-source equivalent of Mythos, which has been portrayed as a cyber weapon of mass destruction.
A CCP equivalent of Mythos would pose an existential threat to the cybersecurity of the federal government. Would you agree with that?
Ritchie Torres
So you're not aware of current events like—I mean, it's pretty important. So in October 2025, the Office of Inspector General issued a scathing assessment downgrading the CFPB's information security maturity from level four to level two, from effective to ineffective. And so not only are you failing to deliver dollars to American consumers, you are endangering the sensitive information of the American people to the benefits of foreign adversaries like the CCP. The Inspector General gave you a level two for cybersecurity. I give you an F for failing the American people.
I yield back.
Young Kim
Gentleman yields back. Chair now recognizes the gentlewoman from California, Ms. Kim. You're recognized for five minutes.
Thank you, Chairman and Ranking Member, for hosting today's hearing and thank you, Mr. Vought, for joining us. As you know, I've long been supporting and championing the Community Development Financial Institution Fund. In my district, California 40 in Southern California, I saw firsthand the impact of CDFI Fund when I visited Vera's Sanctuary. This is a licensed residential treatment center that dedicate to helping the victims of human trafficking. And they tell us that they would not exist without the funds from CDFI financial institutions.
And this is the same thing that I'm hearing over and over across Orange, Riverside, and San Bernardino counties that I'm privileged to represent. And I heard countless stories like that about the valuable impact CDFI fund has in lifting or lifting up the American families. So I want to thank you for working with me and Treasury Secretary Scott Bessent to secure the release of some of the funds to the Treasury so that CDFI fund can distribute them before the expiration date that's fast coming up. But as we continue to build on the 21st Century Road to Housing Act and work on housing affordability, there is still considerable amount of housing construction funds that is available under the Capital Magnet Fund. I'm sure you're aware of that.
So can you provide any details as to when the recipients can expect those funds to be distributed?
Russell Vought
I'm happy to go back to you, come back to you on that matter. As you know, we've apportioned all the CDFI funds that will expire in '26, but we'll give you more detail below that.
Young Kim
Well, I hope we can continue to work together on seeking reforms at the CDFI so we can ensure that those funds can be released in a timely and efficient manner so we can allow the financial institutions to be able to utilize those funds and uplift the American working families as we mentioned. Another avenue that I've been working to uplift American families is through the small dollar credit. Millions of Americans rely on those products to bridge the temporary financial shortfalls or cover the unexpected expenses or avoid more costly alternatives. While it's important that consumers are protected from their unfair or abusive practices, it is equally important that responsible lenders have a clear and consistent regulatory framework that enables them to continue offering lawful, affordable credit products. So to that end, as you know, we I introduced the Small Dollar Loan Certainty Act to seek the greater certainty regarding the legal standards governing these products so that responsible providers can continue serving consumers while maintaining strong consumer protections.
So can you discuss how greater regulatory certainty for responsible small dollar lending can improve consumer access to affordable credit while we are still identifying and addressing the genuinely harmful practices that the CFPB can identify?
Russell Vought
Well, Congressman, I think these can be very innovative tools that meet people where they are in need for financing. We have a small dollar rule on our regulatory agenda. We looked to get to that, we hope to get to that as soon as possible, and I'm happy to look at your legislation as to better understand what it might do.
Young Kim
Thank you. One of the most effective ways to protect consumers is to prevent harm before it occurs. While enforcement plays an important role, consumers also benefit when they receive clear information that helps them make informed decisions to avoid fraud in the first place. So Director Voigt, how is the CFPB balancing enforcement with efforts to improve consumer financial education and prevent consumer fraud or harm?
Russell Vought
Well, we have a very active financial literacy program. We're going across the country having webinars pretty much constantly. We've had an emphasis in our supervision and enforcement for self-reporting, for remediation, for reconciliation before we get to the adversarial part of the process. So we believe that from the education all throughout is a is an important cycle to to have properly gone through so that we limit fraud in the future.
Young Kim
Thank you. Thank you for saying that because I serve as co-chair of the Financial Literacy and Wealth Creation Caucus, and we need to do everything we can. So I want to partner with you and CFPB so we can focus on consumer education. In the remaining time, I'm not sure if we have, but could you share the work you are doing to combat fraud and scams and how you have worked with financial institutions to that end?
J. Hill
I'd invite you to submit that in writing, Mr. Director. Chair recognizes the gentleman from California, Mr. Liccardo, for five minutes.
Sam Liccardo
Thank you. Good morning, Mr. Boat. During your testimony, you testified and I'm just quoting here from your written statement, that the purpose of the Bureau is to implement and enforce federal consumer financial law consistently so that all consumers have access to markets and that such markets are fair, transparent, and competitive. Is that fair?
Speaker 107
So are all financial markets currently fair, transparent, and competitive?
Russell Vought
We believe that it's important to make them more fair. I mean, that's why you have laws on the books and so if you see something, say something. We take the portal very seriously. We look for things as part of supervision to identify and and do our our job to make things more transparent, more fair wherever we can.
Sam Liccardo
Do you think that it's likely that markets are less than fair, less than transparent, less than competitive as we think about, for example, payday lending?
Russell Vought
Well, I think that the industry is an important one and I think it's it's important for consumers to have the access to products that are not predatory, that allow people to get loans when they need to get those loans. And I think it should be cheap to do that and to have good rules of the road so that industry abides by them.
Are there scams in the title loan industry?
Perhaps.
Perhaps.
And what about the credit repair industry?
Certainly.
Speaker 106
And digital wallets and payment apps, you think there's some scams there?
Sam Liccardo
So it seems like in a nation of more than 300 million people with massive number of actors in these financial industries, that there might be a target-rich environment for enforcement to uphold the Bureau's role to ensure that markets are, quote, fair, transparent, and competitive. Is that fair?
Russell Vought
I think the view of a target-rich environment assumes that consumers don't make decisions in their best interest and assumes that all businesses are predatory. We're going to look for opportunities to enforce the law and supervise companies.
Sam Liccardo
And since the time you took over CFPB, there's been exactly one enforcement action.
You filed only one.
Okay.
Correct.
Sam Liccardo
And you've indicated an intent to continue the enforcement of only a single digits, less than 10 of those. Is that fair?
Russell Vought
Well, we are continuing those cases. They remain priorities. We feel think there are good reasons for them and we're continuing them.
Sam Liccardo
And so among all the industries I named plus many others that CFPB might have jurisdiction over, given the jurisdiction provided under federal statute, your agency has initiated exactly one enforcement action in your tenure.
Russell Vought
Well, we had an enormous pileup of cases that we thought were inappropriate that we had to work through. We've set forward new enforcement and supervision guidance and we are now hard at work in that in that area. But if you're saying we would prefer a less adversarial process, you're right. So when we see...
Speaker 90
You have hundreds of millions of consumers in all these industries that you need to protect, and you filed exactly one enforcement action under your tenure.
Russell Vought
That doesn't mean that we are not taking steps to work with a company that we see evidence in the newspaper to decide what's going on with that company. We reach out to them.
Sam Liccardo
Sir, your written testimony indicates that you condemn a bureau driven by, quote, whims of ideologues. You've been in charge of this agency for more than a year, nearly a year and a half, and exactly one enforcement action's been brought against all these actors across all these financial industries. Aren't you an ideologue?
Absolutely not, sir.
J. Hill
Gentleman yields back. Gentleman yields back. Chair now recognizes the gentleman from Wisconsin, Mr. Fitzgerald, for five minutes.
Scott Fitzgerald
Director, thanks for being here this morning. Appreciate it. I think one of the concerns that many members have is now that we've kind of watched the actions that you've taken to clean up the CFPB, complete disaster, that they often relied on kind of vague statutory authority, regulation by enforcement, and these large expansive interpretations of the powers instead of actually having some clear rules and limits in place. So, I think my concern is moving forward that restoring kind of the legal clarity and the procedural fairness means not only kind of defining the CFPB's authorities more clearly, it also means making sure that they were within the proper jurisdiction, right? So, I have a bill, toot my own horn here, but Restoring Court Authority Over Litigation Act, it reflects the principles by clarifying that conduct of attorneys in litigation is regulated by the courts and not the CFPB.
I mean, it seems very obvious, I think, when you look at it from the perspective of the actions that you guys have already taken to fix things over there. But just one question then: how important is it for Congress to establish kind of the clear jurisdictional boundaries so that in the future, I'm worried about the future, I'm worried about a sliding back to this onerous, ridiculous agency, we've got to do something to put something a little bit more clear when it comes to enforcement authority and effectively so you can regulate the practice of law outside of the judicial system. So, I'm just wondering kind of your overall comments on that topic.
Russell Vought
I think clear boundaries need to be set by Congress to ensure that in a future administration, the CFPB can't grow and be in the novel statutory theory space, which is one of the main areas that it was doing with regard to its enforcement activities.
Scott Fitzgerald
Yeah, and so you as you work through this, again, which I said I appreciate somebody's cleaning up this mess, but as you work through this, I think it would be something at least to keep in mind that in the future that Congress have at least some direction on here's the things we need to do to make sure that this doesn't happen again. So, and with that, I'll yield back, Chairman.
Speaker 91
Gentleman yields back. Chair now recognizes the gentlewoman from Texas, Ms. Garcia, you're recognized for five minutes.
Sylvia Garcia
Thank you, Mr. Chairman. I apologize for having to step out, but I've been dealing with issues related to a shooting in my district last week in Houston.
So, Acting Director Boyd, you have sent out a letter, notices to members of your staff at the Consumer Financial Protection Bureau, directing them to either relocate to DC or lose their jobs. They have until July 21st next week to decide. How many Bureau employees do you currently have?
Speaker 97
1071. And how many employees can be accommodated in your new headquarters?
About 500.
Sylvia Garcia
So do you expect to have two or three people on top of each other, or how are you going to accommodate 1071 in a space that holds roughly 550?
Russell Vought
Well, there may be some rotational assignments as to how the space is allocated, but to answer your question, I think more fundamentally, we have put that on pause to wait for the Senate to confirm, hopefully, the nominee so that they can make that determination. It will also come in conjunction with the court proceedings with regard to our reductions in force.
Sylvia Garcia
Is that something you're acting on as Acting Director of CFPB, or was that your hat as head of OMB?
Purely Acting Director of CFPB.
Sylvia Garcia
Because sir, it seems to me, you know, I don't see how you can wear two hats and separate some of these issues. But so roughly half of your employees may not be able to be accommodated in the new headquarters. How many have responded to your letter?
Russell Vought
Well, we've had a number of requests to have an exemption to the policy. Some of them have good ideas. If you're working on a litigation in Denver, we're not going to ask you to come back to DC.
Speaker 98
The question was how many have responded to your letter? And I know you're telling me you put a pause, but obviously some people may have still responded to your letter.
Russell Vought
And we have those in place, and we're certainly can provide that in a QFR.
Question is how many people have responded to your letter?
Russell Vought
I said I don't know off the top of my head, and I'm happy to provide that in a QFR.
Sylvia Garcia
Well, because it seems clear to me that between this and the halt of certain enforcement activity, regulation and guidance rollbacks, employee administrative leave, and the overall significant reduction in size of the workforce, you and the White House are trying to close the only government agency intended to protect our consumers. And I disagree that this Bureau was a disaster. It's not a disaster, it is a lifeline. It is a lifeline for our seniors, our veterans, and people that have been that often are scammed either personally, in writing, and more importantly now through the internet and through emails. So Director Boyd, a recent semi-annual report published by the CFPB found that women and employees of color remain underrepresented in key roles like economists and examiners.
The recent actions taken at CFPB, including leadership changes, hiring freezes, and rollbacks of DEI initiatives are only exacerbating this. How do you respond to these concerns?
Russell Vought
We believe that our employees should be there on the basis of merit, and we have a colorblind employee process.
So you think that people of color have no merit?
Russell Vought
No, I said that we have an employee process of hiring that is based on merit and ensuring that everyone, regardless of who they are, have an opportunity to come and work at CFPB.
Sylvia Garcia
Okay, and again, do you have any evidence to convince me that the decisions that you're making at the Bureau are really about things that are the better or good for the protection of the consumer rights of our citizens around the country and not solely influenced by you as OMB Director?
Sylvia Garcia
Again, sir, you wear two hats. When you make your statements about the staffing issues, are you speaking as the CFPB Director or are you speaking as OMB Director?
Russell Vought
Yes, the CFPB FTE level was bloated. Director Chopra increased enforcement by 100 FTEs, nearly 60%.
Sylvia Garcia
And the question was not about bloating sir, the question was about reductions, reductions in the scope of work conducted and the workforce.
Russell Vought
Like I said, Director Chopra increased the FTEs in enforcement alone by 100.
Sylvia Garcia
Have you transferred any of the the bureau's work, roles, responsibilities, mission, any of it to any other agency in in in the government?
Russell Vought
No, we were under discussions when it was clear we may go to operating at zero level because of the way the law was written in our ability to take control of... So nothing has been transferred.
Speaker 110
Gentlewoman's time has expired. The gentlelady from California has the unanimous consent request.
Maxine Waters
Thank you, Mr. Chairman. I ask unanimous consent to enter into the hearing record seven letters I've sent to the witness that have gone unanswered.
Without objection, they'll be included in the record.
Thank you. I would also ask consent to enter into the record statements and letters from dozens of organizations in strong support of the CFPB as well as those that highlight all the ways our witnesses, our witness has unlawfully undermined the agency's ability to protect consumers, including from Americans for Financial Reform, Better Markets, Consumer Federation of America, Consumer Action, National Association of Consumer Advocates, and many other organizations including state and local groups across the country.
J. Hill
Without objection, they'll all be made part of the record. The chair now recognizes the chairman of our subcommittee on Housing and Insurance, Mr. Flood, you're recognized for five minutes.
Mike Flood
Thank you, Mr. Chairman. Acting Director Vought, thank you for being here today. I had a lot of disagreements with your predecessor, Director Chopra. Among them was Director Chopra's tendency to expand the CFPB's jurisdictional reach at every turn. For example, the CFPB issued a rulemaking in late 2024 defining digital consumer payment technology entities as "larger participants" and therefore subject to CFPB supervision.
I led a Congressional Review Act resolution overturning that move, and I'm proud to say that it was signed by President Trump into law in May of 2025. That move was one of many that the former director made to try and expand his own authority, his own agency's reach, and the bureaucracy of the CFPB with it. By contrast, during this administration, the CFPB released proposals indicating they may redefine what constitutes a larger participant in several non-bank financial markets. I appreciate that the CFPB is doing thoughtful work on which entities truly deserve to fall within their remit rather than instinctively pushing to expand its own authority. In most other areas of federal law, agencies evaluating market participants generally begin with a clearly defined relevant product market before determining whether a firm possesses sufficient market share to warrant heightened regulatory scrutiny.
This is one of the issues that we attempt to address in our draft CFPB comprehensive reform package. Acting Director Vought, do you believe the CFPB's large market participant framework should seek to more precisely define relevant markets and ensure that only firms with a significant share of those markets are subject to heightened supervision?
Russell Vought
Yes, and I would encourage Congress to actually do the work to put it into statute. I think that your hard work on that CRA indicates the degree of skepticism that I think that CFPB can do it well, and I would certainly appreciate additional guidance from Congress.
Mike Flood
Thank you. Next I'd like to run through some of the reforms proposed by the chairman of this committee to right-size the agency. Director Vought, do you believe that the CFPB would receive better oversight if it were funded through the regular appropriations process?
100%.
Mike Flood
Acting Director Vought, do you believe the CFPB would generally undertake better, more defensible rulemaking if the bureau's statutory cost-benefit analysis requirements were strengthened?
Mike Flood
Acting Director Vought, do you believe that the CFPB should have an independent inspector general just like almost every other federal agency?
Mike Flood
Acting Director Vought, do you believe as the draft legislation calls for that there should be a rulemaking more firmly defining what an abusive act or practice is in order to provide greater clarity to market players on what rules they must abide by?
Russell Vought
Well, it's certainly a possibility to do it as a regulation. I would prefer Congress to spell it out more clearly.
Mike Flood
Acting Director Vought, do you believe the CFPB should be able to keep hundreds of millions of dollars in unallocated balances in their civil penalty fund to be used as a slush fund, or do you believe those funds should be transferred back to the Treasury once the victims of any wrongdoing are paid?
Russell Vought
Once the victims of wrongdoing, but I also think that there's a role for there to be some balance to ensure that you have the fund to be able to pay when a particular entity has no more money and to be able to provide redress in that instance. So in terms of the timing, I'd want to look carefully on that.
Mike Flood
Thank you for your answers, Acting Director Vought. I appreciate your time today and believe that together we can move towards a CFPB that is more accountable in the future and appreciate your service to our country. I yield back the balance of my time.
J. Hill
The gentleman yields back. The chair now recognizes the ranking member of our subcommittee on oversight and investigations, Mr. Green of Texas, you're recognized for five minutes.
Al Green
Thank you, Mr. Chairman. I thank the witness for appearing today. Mr. Vought, I'm reviewing your website and there's an indication that you will receive complaints and if another agency is better suited to assist, you will send those complaints to this other agency. Is this a fair statement?
I think that's fair.
Al Green
All right. And do you maintain records on the complaints that you receive, sir?
Russell Vought
We maintain all the records of the consumer portal. We're taking great steps to rationalize...
Al Green
I'll take that as a yes. And in so doing, if you received a complaint about a Ponzi scheme, you would send that complaint to the appropriate agency.
Al Green
Okay. Well, let's just review what a Ponzi scheme is quickly. A Ponzi scheme, according to Investopedia, is a fraudulent investment scam that pays returns to earlier investors using capital collected from new investors, rather than from any actual business profit, named after 1920s swindler Charles Ponzi. The scheme creates a false illusion of a highly profitable enterprise to continuously lure in fresh capital. A Ponzi scheme.
Let's talk about a Ponzi scheme that has made the news as of late. Over a one-year period, President Trump's dollar sign Trump pump and dump meme coin has averaged about $1.7 million in profits per day, 1.74 million in profits per day. Over that same period of time, investors lost a combined $3.8 billion, 3.8 billion. This kind of Ponzi scheme has been reported to you. Can you give me at some point the number of complaints you've received about the President of the United States of America and his Ponzi scheme?
Russell Vought
Congressman, I'm not going to speak to the President's investments other than to say this administration has had the...
Speaker 116
Without going into his investments, I want to know about complaints that you've received. You said you receive the complaints. Can you just give me information about the complaints you've received? That is public information, isn't it?
I don't have that at my fingertips.
Speaker 117
I know you don't have it at your fingertips. The question is whether you'll give it to me now. That is unreasonable.
Speaker 113
Okay, well I don't know what respond means. Is that a yes, you'll give me the complaints? You'll let me know the number?
Speaker 116
I'm referring to complaints about the President of the United States of America, who made 1.74 million dollars per day while other persons were losing billions of dollars, 3.8 billion over the same period of time that he was making 1.74 million per day. I'd like to know the number of complaints that you've received as they relate to, let's take out the term President, as they relate to Donald John Trump.
Russell Vought
I've said I will respond to any of the QFRs that you might have when I don't have the information in front of me.
Speaker 116
That would be unreasonable. I would not expect you to have it in front of you, sir. Now, before I conclude, I want to associate myself with the statements of the ranking member and also Mr. Vargas, as I heard his statements. And I conclude with this. Charles, I want to call him swindler, but he was a predatory person who engaged in a Ponzi scheme.
He's the first person who originated this whole concept of a Ponzi scheme, Charles Ponzi. The President, dear sir, appears to be a person who has somehow legitimized a Ponzi scheme that would be called swindling in a righteous world. I can but only conclude that the President of the United States, in doing what he's doing to persons by pumping and dumping his Ponzi scheme meme coin, he's engaging in a swindle. And it does not in any way bring me joy to tell you that we have a swindler as a President. So now if you receive these complaints about the swindler, I assume that you will take appropriate action and that you'll at least send me information concerning the number of complaints.
But more than that, it would seem to me that this would be the kind of thing you would be interested in investigating if the President of the United States is engaged in a Ponzi scheme. Would you not concur?
J. Hill
The gentleman's time has expired. Mr. President, Mr. Chairman, just a moment. Mr. Chairman, I yield back. The time belongs to the Chairman right this moment. I haven't recognized anybody.
That gentleman's time has expired. And as I've done once before today, I want to remind all members of the committee to observe the principles of decorum and courtesy in debate in the House of Representatives and its committees. And once again, remind members on both sides of the aisle to direct their remarks to the Chair and do not speak unless properly recognized and avoid engaging in personalities or impugning the motives of another member or the President. With that, I recognize the gentleman from California.
Maxine Waters
Thank you very much. Mr. Chairman, Mr. Vought's testimony has been completely inadequate, to say the least. This is the first and likely only time Mr. Vought may testify before this committee this Congress, despite being required by law to do so biannually. As a result, members of this committee are being deprived of the ability to examine the significant administrative, budgetary, regulatory, and enforcement changes the Consumer Financial Protection Bureau has implemented under the leadership of Acting Director Vought.
So pursuant to clause 2(j)(1) of Rule XI of the Rules of the House and clause (d)(5) of Rule 3 of the Rules of the Committee on Financial Services, I and every Democratic member of the committee unanimously request to call additional witnesses selected by committee Democrats to testify in continuation of today's hearing, also known as Minority Day hearing. Continuing this hearing with a second panel will provide members of the committee and the American public the opportunity to examine the activities of the Consumer Financial Protection Bureau under the leadership of Acting Director Vought and their impact on consumer protection and the American financial system. I also request unanimous consent to enter our Minority Day hearing request letter into the record.
J. Hill
I thank the gentlewoman. Your letter will be entered in the record by unanimous consent, and I appreciate your request on holding a Minority Day hearing. The committee will review this request pursuant to clause 2(j)(1) of House Rule XI and Committee Rule 3(d)(5) and will work with the ranking member to determine a date for that requested hearing. We'll now proceed, and the chair recognizes the gentleman from Florida, Mr. Heradopolis, for three minutes.
Mike Haridopolos
I seek recognition. Thank you, Mr. Chairman. Thank you very much. First of all, thank you very much for your service. I know how dedicated you are to looking out for the taxpayer first, and it is a welcome change we've seen from the past.
I also want to express my disappointment in some of the unprofessional comments made towards you today. Every time you come here, you always handle yourself with class and dignity. I very much appreciate that. I think we need to elevate the conversation in Congress, and you've done that today. I also want to remind people that the Federal Trade Commission, the Federal Reserve, the Office of the Comptroller of the Currency, FDIC, the National Credit Union Administration, HUD, the Department of Justice, the SEC, the Federal Housing Finance Agency, and every state attorney general has the ability to look out for the consumer.
It's not just this one agency that you happen to chair at this point, and I think that should be recognized. Also, some of the comments made today about fraud. This is a welcome conversation. I saw today in the Senate that there is a hearing on fraud, and not one member of the other side of the aisle showed up for the meeting. And everyone is seeing these incredible reports about fraud in whether it be Minnesota, in California, where people are clearly just stealing money from the government, and some people just choose to turn a blind eye.
And it's shocking considering some of the allegations that have been made today. And so I've heard some of the disappointing comments today. So I'd like to give you a little bit of time as we conclude today to address some of the things that you still want to address before you conclude your testimony today.
Russell Vought
No, thanks for the comment. It's one of the approaches that we've tried to take with regard to utilizing the tools of the CFPB is to recognize that we're not the only cop on the beat and to take our responsibility seriously, but also to work with our other regulators to figure out who's the best person, who's the best agency with regard to congressional intent, and that's how we've designed our priorities.
Mike Haridopolos
And with that, Mr. Chairman, I would also applaud your efforts to keep this as even as we can today. Appreciate that. And again, I hope we can elevate the conversation because this is what really makes Congress a special place where we all serve and have the honor to serve. And I hope we can elevate the conversation as we move forward.
And with that, Mr. Chairman, I yield back.
J. Hill
I want to thank Acting Director Vought for his testimony today. You are dismissed. Thank you for being with us. Without objection, all members will have five legislative days to submit additional written questions for the chair. Questions will be forwarded to the witness for his response.
Acting Director Vought, please respond no later than August 19th, 2026. Let me recognize the ranking member.
Maxine Waters
Thank you very much, Mr. Chairman. Dodd-Frank requires that the Director of the Consumer Financial Protection Bureau testify semi-annually, meaning this should be at least the third time Mr. Vought testifies before this committee. Yet, contrary to the law, Mr. Vought has successfully avoided accountability despite trying to gut the Bureau's ability to go after bad actors and rolling back consumer protections like those related to medical debt, student loans, overdraft protections, and veterans. To make matters worse, Mr. Vought's testimony today is restricted to just three hours, denying members of both parties and the Americans they represent to hold him and our government accountable. So, pursuant to clause 2(m) of Rule XI and clause 2(k)(6) of House Rule XI, I move that this committee issue a subpoena to compel the appearance of Consumer Financial Protection Bureau Acting Director Russell Vought to ensure that his testimony before this committee again this Congress, so that they may do the job the American people sent us to do.
J. Hill
The gentlewoman has moved to authorize a subpoena. For what purpose does the gentleman from Georgia seek recognition?
I move to table the motion.
J. Hill
The gentleman has moved to table the motion. Motion is not debatable and the question now occurs on the motion to table. Those in favor shall signify by saying aye.
All those opposed signify by saying nay.
J. Hill
The ranking member requests a recorded vote. A recorded vote is so requested. We will now take that vote on the motion to table. We will suspend until the clerk is in place to call the vote. May I ask if the clerk is prepared to open the vote?
Just a moment. Very good. We're waiting for the screen. A little patience. Thank you.
Have all members voted? Is there any member who'd like to change their vote? Hearing none, the clerk will close the vote and report. One more, stand by, just a moment. Clerk will close the vote and report.
J. Hill
The ayes have it, the motion to table is agreed to. The hearing is adjourned.