These are interesting times we live in.

During the transition period between Trump’s election and inauguration, Elon Musk stated that the there were “too many duplicative regulatory agencies” and he would “delete” the Consumer Financial Protection Bureau (CFPB).

Well, it looks like that process has been begun. And if not deleted, then erased significantly.

On Friday afternoon, Elon Musk tweeted out “CFPB RIP”. Subsequently, people noticed the CFPB’s website and X page went dark.

On Saturday night, Russell Vought, the director of the Office of Management and Budget tweeted that the CFPB will NOT be taking its “next draw of unappropriated funding because it is not ‘reasonably necessary’ to carry out its duties.” And the CFPB’s current balance of over $700 million is “excessive in the current fiscal environment”.

Then on Sunday, Mr. Vought, sent an email to all CFPB employees essentially telling them all to go pencils down and they must get approval from the Chief Legal Officer IN WRITING before performing any work task. The letter was signed by Mr. Vought as “Acting Director”.

So, a lot going on. But, what does this mean?

It is helpful to remember the CFPB is funded through the Federal Reserve without Congressional approval. This was the basis of the challenge which the Supreme Court ruled on last year.  The Supreme Court found that the CFPB’s funding scheme fell squarely within the definition of a Congressional “appropriation” in a vote of 7-2.

Therefore, since the CFPB is funded by Treasury, Mr. Vought declining to ask for more money from Treasury is the first step to defund the CFPB. However, it would not be that simple to eliminate the CFPB, the Bureau’s power could be significantly limited.

The legal maneuvers required to completely eliminate the CFPB could require a supermajority vote in the Senate, which seems unlikely, but how could a massive cutback in force affect lead generators?

First, does it stop all new enforcement and rulemaking? This is an organization that has filed over 140 enforcement actions in the last 5 years and has over 20 proposed rules in various stages.

Second, what actions does the new administration take regarding prior actions. Does it rollback all guidance including the guidance around lead generation and pay to play? Does it pause all litigation? This could radically change the playing field for comparison shopping websites and the lenders that rely on them.

These are big questions with many downstream effects in the ecosystem.

My initial suggestion:

Don’t let this change your current business practices.

Like the 1:1 rule being vacated, the cutback of the CFPB doesn’t eliminate existing laws or regulations. And also like the 1:1 rule, don’t be surprised if other parties step into the vacuum created by the CFPB’s sudden diminishing stature.