.svg)
With the Trump administration yet to take any radical steps regarding the future of the US Consumer Finance Protection Bureau (CFPB), the regulator is both carrying on as usual and preparing for a new era.
Since the election, commentators, including Vixio, have speculated as to how the incoming administration is likely to treat the CFPB.
However, with the inauguration behind us, we are still yet to see dramatic reform or a systematic dismantling.
Director Rohit Chopra is still in post, unlike other regulatory heads such as Gary Gensler or Martin Gruenberg, who both resigned in the days before the changing of the guard in Washington, DC.
“It’s somewhat surprising that the current director remains in office, but perhaps that signals that banking and financial services are not top priority for Trump 2.0, and/or the challenges facing the implementation of a populist agenda,” said Eamonn Moran, a partner at Holland & Knight in Washington, DC and former counsel in the office of regulations at the CFPB.
Appointment challenges
Chopra’s robust consumer protection agenda and enforcement heavy approach clearly do not align to current Republican ideals.
However, there are other factors at play within the agency itself, according to Matthew Sheldon, a partner and co-chair of Goodwin’s banking and consumer financial services team.
“There is a very limited list of people that President Trump could put in place of Chopra if he fired him. One option is that there are complicated rules that could allow an interim replacement to come from a small pool of other senior people at the CFPB, but there may be no one there that the Trump administration wants to put in charge, even for an interim period,” he said.
According to Sheldon, in this situation there would normally be other candidates who could be an interim leader, such as officials confirmed by the Senate for other roles.
However, the administration has limited options there too, and so far appears to be unwilling to appoint other candidates who have already been confirmed by Congress.
“Perhaps the best guess on what is going on, is that the Trump administration is waiting to get someone confirmed for something else who they want to also give a side job to as the acting director of the CFPB,” said Sheldon.
He added that this could likely come from one of the financial services related posts currently being confirmed.
“But for some in the industry, the fear is that director Chopra is actually going to stay on, and that he would want to remain in his job if the Trump administration was willing for him to. He has said he's going to serve until the President replaces him. But as of now, there's no concrete indication that that's going to happen. It still appears to be more of a timing issue.”
The delay in decision-making for the role may also be a simple case of priorities — dismantling the CFPB through constitutional means is likely on the Trump administration’s agenda, but it may not be the most important item.
Caleb Logan, a San Diego-based lawyer focused on elder protection at Elder Law & Advocacy, believes this is the case.
“I don't know that the CFPB is as newsworthy an item as perhaps shutting down the border, ending the refugee programme or defining who gets to be a man and who gets to be a woman,” he told Vixio.
“It's not as headline grabby. Elon Musk tweeted that the CFPB needs to be deleted, so it could happen still. But I think it is just not his priority from the outset and generally won't demand the same amount of attention.”
Business as usual
Since the inauguration, the CFPB has issued two reports — one on repossessing vehicles and another on financial outcomes for cash-out refinance mortgage borrowers, which were found to help borrowers pay down credit card loans.
Neither are particularly polarising issues, but it does indicate that it is business as usual for the regulator, at least in the short term, despite the regulatory ban imposed by Trump on January 20.
On January 7, Seth Frotman, the CFPB’s general counsel and senior advisor to the director, indicated that the bureau believed that democracy was at a crossroads.
“I believe that we in the government — including and indeed especially the lawyers — have the awesome responsibility of making sure that what we do actually makes a difference for the American people,” he said.
“That’s the test: whether the pages and pages of laws and regulations — the words and the footnotes and the citations — are improving people’s lives.”
It may be that Chopra, Frotman and others are seeking to fulfil their civic duties while they still can.
State-level enforcement
One major policy shift at the CFPB is a passing of the baton from federal to state level when it comes to enforcement.
On January 14, 2025, the bureau issued recommendations to states about how they can update their own laws and regulations to meet the challenges ahead, perhaps implying that states should take up the cause if the federal agency is defanged.
Michael Sklaire, litigation lawyer at Goodwin Procter, said that the CFPB sent a message in late 2024 that it did not expect to be performing as much enforcement as it usually would, and pushed a lot of work into the courts so that they could get started.
“They’ve been teaming up with state attorney generals and providing guidance to state legislatures to pick up some of the slack. I think their actions speak loudly,” he said.
A similar change took place during President Trump’s first term, with California creating the Department of Financial Protection and Innovation, which Logan described as, “kind of like a state analog to the national CFPB”.
State-led action, consumer or otherwise, is limited by the Supremacy clause of the US constitution.
“But as long as there is no conflicting rule, then the state regulations would be able to take effect and that is unfortunate, just because it gives us kind of a patchwork of protection,” added Logan.
“Essentially, we're looking at a patchwork across the states at this point, and I doubt that many of the redder areas will have the same protections that the bluer areas do.”
This may mean the consumer protections swing back to a less aggressive stance on certain things.
There may be changes to rules governing buy now, pay later (BNPL) and other financial products that impact consumer credit choices, which have attracted criticism in recent years.
“Everybody is waiting to see when either the acting director or the new permanent director gets put in place — what does it mean for everything that Chopra has filed and sent out in the enforcement space, particularly the lawsuits,” said Sheldon.
“Are they going to go back and reconsider any of their lawsuits, and are they going to reconsider any of the confidential investigations they've opened, or is the new director going to let those things just play out?”
Despite the uncertainty with CFPB leadership, the move to state-level oversight and strong stance by Chopra indicate that protection lives on, for now.
Changes will come, along with a more pro-business agenda. The agency itself may cease to exist, or it might be led by someone who has no faith in consumer protection, so the future very much hangs in the balance.
