Work is halted at CFPB on acting head's orders

Consumer watchdog agency's staff told to stop crafting, enforcing rules

The Consumer Financial Protection Bureau halted much of its work to investigate and penalize corporate wrongdoing Monday, after Treasury Secretary Scott Bessent - tapped to lead the watchdog on an acting basis - ordered an agency-wide review to "promote consistency" with the new Trump administration.

Shortly after assuming the post, Bessent and his aides ordered the bureau's staff in an email to cease crafting regulations, enforcing rules, conducting probes or providing "public communications of any type," according to a copy obtained by The Washington Post, which said he had instituted the ban "effective immediately."

The missive appeared to herald a stark shift for the CFPB, a powerful agency formed in the wake of the 2008 banking crisis to protect consumers from unfair, deceptive or predatory financial practices. It came on the same day that President Donald Trump named Secretary of State Marco Rubio acting administrator of another agency, the U.S. Agency for International Development, which the administration moved to shutter as part of a broad and contested effort to slash government spending and regulation.

Much like USAID, the financial watchdog is a longtime target of Republicans' scorn. Party lawmakers have threatened for years to defund the CFPB or neuter its powers - and tech billionaire Elon Musk, who is advising Trump on his reconfiguration of American government, has called on Congress to "delete" the bureau entirely.

Under President Joe Biden, the CFPB was active and aggressive: Its leader, Rohit Chopra, issued a wide array of rules to crack down on predatory lending, reduce the burden of medical debt and cut fees that customers pay when they fall behind on their credit card bills or overextend their checking accounts. Chopra also expanded the bureau's watch over Apple, Google and other tech giants as their digital payment apps grew more popular with consumers.

But Trump fired Chopra on Saturday before his term was scheduled to end, pleasing Chopra's Republican critics, who had long accused him of engaging in regulatory overreach. Banks, tech giants and other businesses similarly delighted in Chopra's departure - and Bessent's ascension - after years of fierce legal and political clashes with the bureau over the extent of its oversight.

"We urge Secretary Bessent to begin reversing the damage caused by these misguided regulatory actions and stand ready to support his efforts to chart a better course for the Bureau," Rob Nichols, the president of the American Bankers Association, an industry lobbying group, said in a statement Monday.

A CFPB spokesman did not immediately respond to a request for comment.

"I look forward to working with the CFPB to advance President Trump's agenda to lower costs for the American people and accelerate economic growth," Bessent said in a statement after Trump designated him for the role. The president has not yet nominated a permanent director, who must be confirmed by the Senate.

On Capitol Hill, some Democrats assailed Bessent for pausing the bureau's work, stressing in particular that an interruption to its investigations would leave Americans exposed to scams.

"Shutting down CFPB enforcement actions that are on the verge of delivering money into the pockets of working people is at odds with President Trump's claim that he wants to lower costs for families - which he has done next to nothing on so far," said Sen. Elizabeth Warren (Massachusetts), the top Democrat on the Senate Banking Committee, who helped create the agency.

For now, Bessent's instructions appear to halt virtually all of the agency's activities, including implementing policies that were finalized at the end of the Biden administration.

Last month, the agency under Chopra moved to eliminate unpaid medical debts from millions of Americans' credit reports, in rules set to take effect in March. It also enacted limits on banks' overdraft charges, a policy scheduled to enter full force in October.

"They are trying to strangle rules that have already been lawfully finished, as part of the broad deregulatory agenda of Trump 2.0," said Carter Dougherty, communications director for Americans for Financial Reform, who added that the administration is "responding to the pressure of the big banks."

The treasury secretary Monday also ordered CFPB lawyers to cease defending their existing regulations in court, except to seek a delay in ongoing trials. The pause could set the stage for the bureau to stop defending its most contested rules - including those targeting so-called "junk fees" - against lawsuits brought by banks, tech giants and others that have sought to weaken the CFPB's mandate.

Trump similarly moved to restrain the CFPB during his first term. His acting director then - former congressman Mick Mulvaney - at one point requested no new money for the agency and settled pending enforcement actions, sometimes for as little as $1.

This time, Republicans have promised to pursue even more significant changes to the CFPB, targeting its leadership structure, investigative powers and funding source; the bureau gets its money from the Federal Reserve. Last week, Sen. Ted Cruz (R-Texas) unveiled the latest bill to curtail its funding, describing the CFPB as an "unelected, unaccountable bureaucratic agency."