New Acting Director of the CFPB Brings Sweeping Changes

On February 3, 2025, President Trump designated Treasury Secretary Scott Bessent as Acting Director of the CFPB following the departure of Rohit Chopra. Bessent will serve as acting director until President Donald Trump’s eventual nominee is confirmed by the Senate. 

As Acting Director, Secretary Bessent has made some significant changes. He sent out an email to staff, effective immediately, ordering a broad freeze to the agency’s operations including the following directions to CFPB personnel:

•    Refrain from approving or issuing any further rules or guidance; 
•    Suspend the effective dates of all issued and published final rules that are not yet effective;
•    Refrain from settling or taking further investigative activities in enforcement actions;
•    Refrain from issuing any types of public communications, including research papers;
•    Refrain from approving or executing material agreements, such as agreements related to employee or contractor matters; and
•    Refrain from approving filings or appearing in litigation, other than to pause the action.

What could this mean for credit unions?

The CFPB will not be proposing any new rules or issuing any guidance while this freeze is in place. Any proposed rules or guidance that was already issued, such as the Data Broker Proposal, which would amend Regulation V and require data brokers to be treated as credit reporting agencies, will be left as is and likely not get finalized. Additionally, I would not expect to see a final rule for the Digital Payments Proposed Interpretive Rule which would expand how Regulation E applies to digital payment platforms.

Furthermore, any final rules that were previously issued but have not yet become effective are going to be suspended. This includes:
•    The Overdraft Rule for Very Large Financial Institutions which was expected to become effective October 1, 2025. This rule would have amended Regulations E and Z to update regulatory exceptions for overdraft credit provided by financial institutions with more than $10 billion in assets, thereby subjecting extensions of overdraft credit to the consumer protection regulations and putting a $5 cap on overdraft fees.
•    The Medical Debt Credit Reporting Final Rule which was expected to become effective March 15, 2025. This rule would have prohibited creditors from using medical debt information from consumer reports when determining credit eligibility under the financial information exception. 
America’s Credit Unions is currently involved in litigation challenging the Overdraft final rule and we will keep credit unions informed of any updates. The Medical Debt final rule has also been challenged in court. 

Lastly, all activities are on hold, this includes moving forward with enforcement investigations, halting all rulemaking activities, and temporarily discontinuing any publications of research papers. Essentially, the CFPB has been told to cease most, if not all, of its operations.

What we do know is that it isn’t unusual for a new administration to limit activities until a new leadership team is in place. Moreover, Congress created the CFPB with the primary purpose of enforcing federal consumer financial laws. Consequently, these laws will remain in effect regardless of an agency’s freeze.  

America’s Credit Unions will continue to provide updates as more information unfolds.