The Consumer Financial Protection Bureau is canceling more than $100 million in vendor contracts as part of a cost-cutting maneuver by the agency’s new leadership, potentially putting its cybersecurity efforts at risk.
The cuts come as Elon Musk’s Department of Government Efficiency pores over the CFPB’s internal finance and procurement data and while the agency is at a virtual standstill under an order from acting Director Russell Vought. Musk is currently developing his X social media platform into a payments platform.
Cybersecurity contracts and other internal management systems weren’t included on a list of “essential” contracts obtained by Bloomberg Law, meaning they’re vulnerable to cuts.
Vought also serves as the director of the Office of Management and Budget.
“Acting Director Vought is wasting no time getting to the bottom of the waste, fraud, and lavish spending at this rogue and weaponized agency and in bringing it to heel,” an OMB spokesperson said in a statement to Bloomberg Law. “We are in the process of canceling hundreds of wasteful and unnecessary contracts worth over $100 million.”
The agency budgeted more than $224 million for “other contractual services” in fiscal 2024, according to its annual performance plan and budget overview released in February 2024.
CFPB Contracts
Any cuts to cybersecurity and software system contracts could threaten the security of highly confidential information provided by banks and other companies the CFPB supervises, as well as customer data and employee information.
Among the cuts were 102 vendor contracts for the CFPB’s enforcement division, 33 contracts linked to the director’s office, and 16 contracts for the agency’s supervision unit, according to a Tuesday evening email from CFPB acting Senior Procurement Executive Joshua Galicki obtained by Bloomberg Law.
The email didn’t say how much those contracts were worth.
The CFPB’s list of essential contracts included spending on security guards with the Whitestone Group, a mailroom system from NewView Oklahoma, janitorial services from Didlake, and facilities maintenance from EML, according to a Monday email obtained by Bloomberg Law.
Contracts for the CFPB’s service desk, a contact center, and management of the agency’s civil penalty fund were also listed as essential.
The email didn’t indicate how much those contracts were worth.
The agency obligated $18.9 million in fiscal 2024 for “enterprise-wide cloud hosting infrastructure, system administration and related IT support services,” according to its financial report.
Another $8.1 million went to e-discovery and litigation services and $7.9 million for information technology data platform engineering and support, the fiscal 2024 financial report said.
The CFPB also agreed to pay $7.6 million to Salesforce Inc. for program support in fiscal 2024, the financial report said. The CFPB’s Supervision Examination System, a digital platform for the bureau’s examination force, is a Salesforce platform.
DOGE Cuts
The cuts come as DOGE moves through several government agencies, such as the US Department of Education and the US Agency for International Development, looking to eliminate grants and other spending it deems wasteful or inefficient.
In most cases, the spending DOGE and its teams are targeting at other agencies is appropriated by Congress. Federal judges have started blocking some of Trump’s efforts to cut programs, although the administration has indicated it may disregard court orders.
The CFPB cuts are different.
Because the CFPB is funded through the Federal Reserve, none of its spending is allocated by Congress. So Vought has a freer hand to slash the agency’s spending.
Vought on Feb. 8 announced he wouldn’t be requesting the CFPB’s next scheduled funding draw from the Fed, noting the consumer finance watchdog has more than $700 million in reserves.
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