Project 2025's CFPB Abolition: The Supreme Court Rejected the Core Argument. The Legislative Threat Remains.
Project 2025 calls for abolishing the CFPB, claiming it is unconstitutional—a claim the Supreme Court rejected 7-2 in May 2024. While that legal avenue is closed, the plan’s legislative proposals to gut the agency, repeal Section 1071, and hamstring enforcement remain live threats to workers and consumers.
Project 2025 devotes pages 838–840 to a full-frontal assault on the Consumer Financial Protection Bureau (CFPB), the agency that has returned over $19 billion to consumers cheated by predatory lenders, student loan servicers, and mortgage companies. The blueprint's central claim—that the CFPB is "unconstitutional" because its funding structure violates the Appropriations Clause—was the precise argument the Supreme Court rejected in a 7-2 ruling in *CFPB v. Community Financial Services Association of America* (May 2024). The Court upheld the agency's funding mechanism, and the Director is already removable by the President under *Seila Law* (2020). The constitutional hook is gone.
Yet Project 2025 persists. The text (p. 839) urges a next conservative President to "order the immediate dissolution of the agency—pull down its prior rules, regulations and guidance." In the meantime, it demands Congress repeal Dodd-Frank Section 1071, which requires financial institutions to collect data on small-business lending—a rule designed to combat redlining and discrimination. It also demands that no CFPB enforcement action proceed unless it is based on a formal Administrative Procedure Act rulemaking, a poison pill that would paralyze the agency's ability to police "unfair, deceptive, or abusive acts or practices" in real time.
This is a coordinated plan to return consumer protection to the FTC and banking regulators—agencies that lack the CFPB's dedicated supervisory and examination authority over nonbank lenders, fintech companies, and debt collectors. The practical effect would be a return to the pre-2011 status quo: a patchwork of enforcers, weaker oversight of payday lenders and mortgage servicers, and a green light for the predatory practices that sparked the 2008 financial crisis. For workers, this means continued exposure to wage garnishment abuses, surprise medical billing, and discriminatory surveillance pricing. The Supreme Court has closed the constitutional door, but Project 2025 is still trying to break the agency through legislation.
The humanitarian alternative
Instead of abolition, Congress should strengthen the CFPB by codifying its funding structure, expanding its supervisory authority over digital payment giants like Apple and Google, and restoring the Civil Penalty Fund's consumer education mission. The next administration should appoint a director committed to aggressive enforcement against predatory lending, surveillance pricing, and discriminatory algorithms. The FTC and CFPB should jointly develop a framework for regulating buy-now-pay-later products and data brokers, ensuring that structural antitrust remedies — like breaking up dominant platforms — complement the CFPB's rulemaking and enforcement.
Original source — excerpted
project2025 Project 2025 ch. 30: Federal Trade Commission (pp 871-873)"— 838 — Mandate for Leadership: The Conservative Promise mortgage lending and servicing industries traditionally regulated by state bank - ing regulators. Consumer protection responsibilities previously handled by the Office of the Comptroller of the Currency, Office of Thrift Supervision, Federal Deposit Insurance Corporation, Federal Reserve, National Credit Union Admin - istration, and Federal Trade Commission were transferred to and consolidated in the CFPB, which issues rules, orders, and guidance to implement federal consumer financial law. The CFPB collects fines from the private sector that are put into the Civil Pen- alty Fund.42 The fund serves two ostensible purposes: to compensate the victims whom the CFPB perceives to be harmed and to underwrite “consumer education” and “financial literacy” programs. 43 How the Civil Penalty Fund is spent is at the discretion of the CFPB Director. The CFPB has been unclear as to how it decides what “consumer education” or “financial literacy programs” to fund. 44 As noted, critics have charged that money from the Civil Penalty Fund has ended up in the pockets of leftist activist organizations. In Seila Law LLC v. Consumer F…"