Vought defends CFPB cuts, calls for congressional reforms

Russell Vought, the acting director of the Consumer Financial Protection Bureau (CFPB), testified before the House Financial Services Committee on Wednesday, arguing that the bureau has exceeded its statutory authority while lawmakers spar over its future.

During the contentious hearing — which marked Vought‘s first appearance before Congress in his role leading the CFPB — Vought defended the Trump administration’s overhaul of the agency and the rollback of the agency that he has overseen.

The hearing was convened to examine the bureau’s Spring 2026 report, which covers its activities from October 2024 through December 2025, as required under the Dodd-Frank Act.

Committee leaders also discussed a draft of the CFPB Reform Act of 2026, which would overhaul the bureau’s structure and authorities. The proposal would increase congressional oversight, revise the CFPB’s funding and governance, expand transparency and accountability requirements for rulemaking and enforcement, and recalibrate its supervisory and enforcement powers.

The proposal also includes an adjustment to the threshold for supervised institutions to $21 billion in assets to account for economic growth, up from the current threshold of $10 billion.

Vought told lawmakers during the hearing that the CFPB had become an agency that operated beyond its congressional mandate and imposed unnecessary costs on consumers and financial institutions. He said the bureau should not continue to exist in its current form and argued that Congress should subject the agency to the annual appropriations process rather than allowing it to receive funding directly from the Federal Reserve.

The hearing came as Vought’s tenure as acting director approaches its Aug. 1 expiration under the Federal Vacancies Reform Act. President Donald Trump has nominated former CFPB official Brian Johnson to serve as the agency’s permanent director, although the Senate has not yet scheduled him for a confirmation hearing.

If Johnson is not confirmed before Vought’s acting service expires, acting Deputy Director Mark Paoletta could assume the role.

Vought defends CFPB ‘culture’

Republican lawmakers praised Vought’s efforts to scale back what they described as regulatory overreach under previous administrations. They highlighted the bureau’s move away from “regulation by enforcement,” revisions to rules such as the Section 1071 small-business data collection rule, and efforts to bring more CFPB activities under congressional control.

“We have changed the culture,” Vought said, noting the agency is “about half of what we were when we came into office.” He called on Congress to reduce the bureau director’s discretion by clarifying statutory standards and limiting areas where agency leadership can make broad policy choices.

Rep. Andy Barr (R-Ky) defended Vought’s leadership choices. “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.”

When asked about bringing the CFPB into the annual appropriations process, Vought said placing the bureau under the process would be the “most important reform lawmakers could make.” He argued that the agency’s current funding structure has contributed to what he called a “cavalier attitude” and a “swagger” at the bureau.

When asked about raising the CFPB’s supervision threshold for financial institutions from $10 billion to $21 billion in assets, Vought said the change would allow the bureau to focus oversight on larger, higher-risk institutions.

Democrats ‘ready for Vought to be gone’

Democrats, meanwhile, criticized Vought’s leadership, arguing that workforce cuts and reduced enforcement activity have weakened the CFPB’s ability to protect consumers. They accused him of undermining the agency’s mission by shrinking staff and limiting investigations.

“You’re not protecting consumers; you’re protecting big businesses,” said Rep. Juan Vargas (D-Calif.)

Democratic lawmakers also raised concerns about the CFPB’s decision to dismiss or settle dozens of enforcement actions, its suspension of nonbank supervision and examinations, and its ongoing legal dispute with the National Treasury Employees Union over proposed workforce reductions.

Rep. Brad Sherman (D-Calif.) said previous CFPB actions returned billions of dollars to consumers. He compared the agency’s enforcement role to law enforcement protecting the public from corporate misconduct.

“The only person successful in defunding the police, sir, is you,” Sherman said, arguing that the bureau had been weakened under Vought’s leadership.

Rep. Gregory Meeks (D-N.Y), questioned whether Vought — who has not been confirmed by the Senate — has the authority to make sweeping changes to the agency. Meeks and other Democrats argued that Congress created the CFPB with a mandate for robust supervision and enforcement that cannot be unilaterally scaled back.

“In your testimony, you’ve said, ‘We’ve sought to downscale this agency to the maximum extent possible.’ 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,” Meeks said. “You may not like it, but it is what Congress set forth.”

Rep. Maxine Waters (D-Calif.), the top Democrat on the House Financial Services Committee, criticized Vought for “hiding while unlawfully trying, and thankfully failing, to dismantle the nation’s top consumer watchdog.”

“You’ve directed CFPB to drop enforcement actions even when the bad actor offered to compensate victims,” Waters said. “You’ve blocked billions of dollars from being returned to harmed American consumers. You’ve even been terrible for the financial services industry, denying or throwing out basic guidance and safeguards [the] industry had asked for.”

Waters also said that consumer complaints about financial practices have “exploded” under Vought’s tenure.

Consumer complaints

Lawmakers also questioned Vought about the CFPB’s approach to crypto-related consumer complaints and allegations of losses tied to digital assets. Vought defended the administration’s conduct and said the agency was focused on its statutory responsibilities.

The hearing also touched on the bureau’s handling of credit repair complaints. Sherman said credit repair companies have overwhelmed the CFPB’s complaint system with automated filings. Vought said the agency has added verification requirements, including confirmed email addresses and mobile phone numbers, to improve the integrity of its complaint process.

Vought confirmed during the testimony that the agency is nearing completion of a long-awaited open banking rule, but that the timing of the proposal will depend on the Senate confirmation process for Johnson

“It is one of those things that I would like a newly confirmed director to be able to finalize,” Vought said. “We are supportive of open banking as a concept, and we’re working hard on that rule.”