Consumer Financial Protection Bureau Ordered To Stop Work After Trump Says Treasury’s Bessent Now In Charge

Topline

The Consumer Financial Protection Bureau was told to cease operations on Monday shortly after President Donald Trump appointed Treasury Secretary Scott Bessent to serve as the watchdog agency’s acting director—appeasing Republicans and tech executives, who have criticized regulations at the agency implemented under the Biden administration.

Key Facts

Bessent told agency staff in an email that it must stop all regulatory work and “public communications of any type,” citing the need to ensure operations are consistent with Trump’s executive orders, according to multiple reports.

Staff were also reportedly instructed not to pursue enforcement actions or litigation.

The move comes after work at the U.S. Agency for International Development was also halted over the weekend following an executive order during Trump’s first week in office ordering a temporary pause in U.S. foreign assistance.

Reining in the CFPB has long been a target of Republicans and tech executives after the Biden administration implemented new regulations to address predatory lending and credit card and banking fees.

Trump appointed Bessent to take over the agency after firing Biden-era director Rohit Chopra over the weekend.

What Have Tech Executives Said About The Cfpb?

Billionaires Marc Andreessen, Mark Zuckerberg and Elon Musk have all attacked the CFPB, alleging the agency has taken a heavy handed approach to regulations. Musk, who is advising Trump on ways to scale back the size of the federal government, said in November he wanted to “delete CFPB” because “there are too many duplicative regulatory agencies,” shortly after the agency announced a new rule to enhance oversight of Big Tech companies and others offering digital funds transfers and payment wallet apps. Zuckerberg also lashed out at the agency, which threatened to sue Meta last year over allegations it improperly used financial data in its advertising business, telling Joe Rogan in a podcast interview the CFPB “found some theory they wanted to investigate” and questioning whether there was “a quiet consensus” among regulators that they wanted to punish the tech industry. Andreessen also alleged in an interview with Rogan that the agency is “terrorizing anybody who tries to do anything new in financial services.”

What Have Republicans Said About The Cfpb?

Republicans have sought to defund the CFPB and praised Chopra’s termination. Rep. French Hill, R-Ark., vowed Monday in a statement to help Bessent “finally rein in this unaccountable agency by putting the CFPB under the appropriations process, making it a bipartisan commission and providing appropriate statutory guardrails.” The CFPB receives its funding directly from the Federal Reserve, rather than through the congressional appropriations process, a mechanism designed to preserve its impartiality.

Key Background

The CFPB was formed in 2011, in the aftermath of the 2008 financial crisis, by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Trump previously sought to limit the CFPB’s authority during his first term, appointing former Rep. Mick Mulvaney, R-S.C., as its acting director. Mulvaney subsequently sent a budget request for the CFPB to the Federal Reserve for $0, ordered a hiring freeze and halted new enforcement actions, according to The New York Times. Former President Joe Biden subsequently hired Chopra to undo the deregulatory actions, and the agency under Chopra’s direction repeatedly clashed with big banks as Chopra spearheaded rules to limit overdraft fees, credit card late fees and eliminate medical debt from credit reports.

Further Reading

Elon Musk Homes In On New Government Target: Consumer Financial Protection Bureau (Forbes)