Adds comment from White House in paragraph 8, consumer group in paragraph 17, bank stocks in paragraph 19, Fitch in paragraph 24/25

By Douglas Gillison

Feb 10 (Reuters) - President Donald Trump's newly installed chief of the U.S. Consumer Financial Protection Bureau told all of the agency's staff on Monday to stay away from the office and do no work, according to an email reviewed by Reuters.

The move followed a weekend decision to shutter the CFPB's Washington headquarters, idling a federal agency of nearly 2,000 workers tasked with enforcing consumer financial laws.

"Employees should not come into the office," acting CFPB Director Russell Vought said in an email to all staff. "Please do not perform any work tasks."

Vought, a longtime budget hawk, took control of the agency on Friday. He is architect of the right-wing policy manifesto known as Project 2025, which called for the CFPB's abolition.

Efforts by President Donald Trump's administration to neutralize the agency escalated over the weekend as billionaire Elon Musk's Department of Government Efficiency gained full access to CFPB computer systems. Vought ordered a stop to all oversight of consumer financial companies.

Musk has vowed to destroy the CFPB and on Friday posted "CFPB RIP" on his social media platform X. The agency would be responsible for regulating his planned business venture with payments giant Visa.

The White House said in a statement the CFPB has long functioned as another "woke, weaponized arm of the bureaucracy that leverages its power against certain industries and individuals disfavored by so-called elites."

The statement added, "the weaponization ends right now."

CONFRONTATIONS

Confrontations with staff, Democratic lawmakers and progressive organizations were set to continue on Monday, with a rally planned for outside the agency's headquarters near the White House.

Meanwhile, in a federal lawsuit filed Sunday, the National Treasury Employees Union, which represents CFPB staff, argued that Vought's actions violated the Constitution by undercutting Congress' power to set and fund the agency's mission.

The CFPB was created as part of the sweeping 2010 Dodd-Frank financial reform law, part of an effort to ensure a sole agency was charged with monitoring the financial wellbeing of consumers.

The agency does not receive direct funding from Congress, but rather requests its budget from the Federal Reserve. Vought has already said he intends to seek no new funding for the CFPB, which currently has cash reserves of over $700 million.

U.S. Senator Elizabeth Warren, the top Democrat on the Senate Banking Committee who first proposed and helped launch the agency, posted a video on Monday in which she said she was "ringing the alarm bell."

The Trump-Musk effort to kill the CFPB was a "payoff" to campaign donors who wanted to be rid of government oversight, Warren said.

She and U.S. Representative Maxine Waters, the top Democrat on the House Financial Services Committee, will meet in front of the CFPB's headquarters on Monday to demand answers regarding Musk's "takeover of the agency," according to a statement from Waters' office.

Efforts to undermine the CFPB put consumers at risk of falling victim to fraud and scams and other abusive financial industry practices, non-profit organization Consumer Reports warned.

"The administration’s latest efforts to halt activity at the CFPB makes clear that they are intent on effectively shutting it down for the next four years," said Delicia Hand, senior director, digital marketplace, at Consumer Reports in email.

Bank stocks were underperforming the broader market index .SPX on Monday with S&P 500 bank index .SPXBK down 1.9% in afternoon trade.

Synchrony Financial SYF.N Chief Financial Officer Brian Wenzel said the company has not changed the way it interacts with the CFPB so far.

"We are keeping our head down," he told a financial conference on Monday. "We have a lot of respect for the CFPB. We will continue to deal with them; it's business as usual."

CFPB backers say it has served as a critical safeguard for consumers, reaping billions in repaid funds to wronged parties. But the financial industry and Republican lawmakers have griped the CFPB is too powerful and lacks accountability.

Complaints escalated under its most recent Democratic director, Rohit Chopra, whom they said tested the boundaries of legal activity at the agency with his aggressive policing of the financial sector.

"It is likely that recent CFPB rulemakings on fees get rolled back, although they were not yet implemented, so status quo for consumers," said Christopher Wolfe, head of North American banks at rating agency Fitch.

"The CFPB has been a political football almost since its inception and looks like that will remain the case."

(Reporting by Douglas Gillison; Additional reporting by Tatiana Bautzer, Hannah Lang, Saeed Azhar and Pete Schroeder; Editing by Louise Heavens, Peter Graff, Lananh Nguyen, Andrea Ricci and David Gregorio)

((douglas.gillison@thomsonreuters.com;))