Reed Calls Out Vought for Needlessly Blocking Aid to Vulnerable Americans & Making U.S. Servicemembers More Vulnerable to Financial Scams

***VIDEO: Reed Questions OMB Director Vought***

WASHINGTON, DC - His days in his second job as acting director of the Consumer Financial Bureau (CFPB) may be numbered, but today Russell Vought, whose full-time job is Director of the Office Management and Budget (OMB), got an earful from U.S. Senator Jack Reed (D-RI) who hammered Vought for failing to release approximately $750 million in affordable housing construction funds; a recent OMB proposal to end merit-based review of federal grant funding and inject hyper-partisanship into the decision-making process; and for Vought's gutting of the CFPB, specifically the Office of Servicemember Affairs and its examination function which is leaving U.S. servicemembers vulnerable to exploitation by predatory lenders.

Earlier this month, Senator Reed led 22 of his colleagues in demanding that the Trump Administration swiftly release $750 million in stalled affordable housing construction funding that has been held up by the Trump Administration for over a year. The funding is primarily from the Capital Magnet Fund (CMF) and Housing Trust Fund (HTF), which can be leveraged by states and local organizations use to develop, preserve, rehabilitate, and increase the supply of affordable housing. In his questioning of Vought, Reed pointed out that this funding could be used to build or rehabilitate about 63,000 affordable homes across the nation and wouldn't cost taxpayers a dime, as CMF and HTF funds come from Fannie Mae and Freddie Mac profits, not taxpayers.

Additionally, Reed criticized the Trump Administration's recent OMB proposal that would place all federal grants under constant threat of penalty or termination and subject them to hyper-partisan coercion from President Trump's political appointees. The OMB's proposed rule to end the federal government's longstanding merit-based, largely independent, peer review process for grantmaking decisions would stunt scientific progress, weaken national security, and undermine Congress's constitutional power of the purse while allowing President Trump and all future presidents to weaponize federal grants for political purposes.

As a creator of the CFPB's Office of Servicemember Affairs and a leading defender of the Military Lending Act, Senator Reed blasted Vought's gutting of the primary federal consumer watchdog which has left U.S. servicemembers increasingly vulnerable to financial manipulation from payday lenders and other bad actors who seek to exploit active-duty personnel and their families. Reed credits his own experience as a former U.S. Army officer who commanded paratroopers in the 82^nd Airborne as a central component of his efforts to create the dedicated watchdog to protect the financial security of servicemembers and their families. Since becoming OMB Director and acting director of CFPB, Vought has cut staff at the Office of Servicemember Affairs from 47 personnel to just 9 staff members while simultaneously slashing CFPB supervisory staff by 85%. Meanwhile, enforcement actions meant to return illegal fees collected from servicemembers have ground to a halt.

A video of Senator Reed's questioning of Director Vought can be found here and a full transcript follows below:

SENATOR REED: Mr. Vought, we have a housing supply crisis in the United States which is obvious to everyone. Yet, the Trump Administration is sitting on $750 million in homebuilding funds, mostly from the affordable Housing Trust Fund and the Capital Magnet Fund that could build or rehabilitate about 63,000 homes across the country. These programs are not funded by the taxpayer. They are funded from a portion of the profits of Fannie Mae and Freddie Mac. 22 of my colleagues joined me in writing on June 30 urging you to release these funds which you are holding. Will you commit to releasing these funds? And when will you do it?

DIRECTOR VOUGHT: I'm happy to look at that. I did see your letter and we will be happy to follow up. We are looking to expeditiously move on all of those apportionments as quickly as we can.

REED: How quickly is quickly?

VOUGHT: Well, it's halfway through the fiscal year. We obviously want to make sure that the funds get to the agency and they can be spent.

REED: You have been sitting on those funds now for more than a year. I doubt you'll need much more time. I urge you to respond quickly, actually immediately.

You have also proposed a regulation to overhaul the federal grantmaking process that would effectively end merit-based decisions and give political appointments unprecedented control of $1 billion in federal grants. There have been 350,000 comments already about your proposal - most of them I suspect are in opposition. In fact, we have already seen the effects of this kind of approach to decision-making. Last month, the Trump Administration began dismantling the NSF Ocean Observation Initiative which provides critical, real-time monitoring of our oceans. The political appointees who made the decision clearly did not know what they were doing, not understanding the science, and were forced to quickly reverse their decision. How will this rule ensure that political litmus tests will not be used to make grants?

VOUGHT: Senator, I think that this rule is about ensuring we have democratic control of the spending that is going out at the executive branch agencies so that when you have a policy official in charge of an agency based on themselves being in the cabinet, those are the ones making the final call on how and what we are spending money on through the grant program. I was up here last year, I think you were there, talking about the recissions process. One of the biggest questions I got was, Mr. Director, why don't you just not spend it on this or that? You have an opportunity to impose your own policy objectives. To the extent that's a valid argument, this CFR is part of that process. We want to make sure that NIH is not spending money on gain-of-function research that contributed to the last pandemic just because Tony Fauci, who was not a policy official of a political nature, decides it's a wise thing to do.

REED: Excuse me, so you have a non-doctor, nonscientist making decisions about scientific research which seems to me to be a fairly bad approach.

VOUGHT: In that case…

REED: Let me move on. I was the lead sponsor of the Military Lending Act, based on my experience as a soldier. In February of 2025, I sent you a very simple letter asking for an explanation and I still have not had a response. In fact, you are not at all very responsive. In June 2025, you testified to me at the Appropriations Committee that you specifically made military lending and enforcement a priority.

Well, let's look at the record. Before your tenure, the CFPB took 40 enforcement actions that yielded $363 million in relief for servicemembers. You have taken only two enforcement actions, securing only $6.75 million. Again, as Senator Warren has pointed out, you released the Navy Federal Credit Union from an obligation to refund $80 million in illegally charged fees to U.S. servicemembers. And this argument that oh, they'll all pay because it's a cooperative… These people were denied funds. You said stop, we are not going to pay them back.

You have reduced the Office of Servicemember Affairs from 47 employees to 9. You have reduced the CFPB's supervision staff by 85% and cut the number of annual exams from hundreds to only 70. You are basically abandoning the troops and the soldiers, sailors, and airmen that are being exploited by payday lenders, by all sorts of used car dealers and everything else.

To me that is a shame. Because you would probably be the first one to stand up and say how much you do for servicemembers. You are not doing anything for servicemembers. My time has expired.

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