Alert

Trump 2.0: Potential CFPB Changes in 2025

November 6, 2024

Former President Donald Trump emphatically won a second term in office, and with his election, sweeping changes appear in store for the Consumer Financial Protection Bureau (CFPB or Bureau). While President-elect Trump did not discuss in any great detail his plans for the CFPB during his campaign, the CFPB’s current rulemaking, enforcement, and supervision strategies likely will not survive past early 2025. Here are a few predictions on what a Trump presidency might mean for the CFPB.

A New Director

There is no chance that Rohit Chopra will remain director of the CFPB. And the Supreme Court’s decision in Selia Law LLC v. Con. Fin. Prot. Bureau, 591 U.S. 197 (2020) makes clear that President-elect Trump does not need cause to fire Director Chopra. Rather, the director, like other executive agency appointees, can be removed at will by the President. Such a change is likely to happen very early in President-elect Trump’s second term.

While some conservatives have called for the abolishment of the CFPB altogether, that is probably not likely even under a Republican administration, although in a scenario where the Republican party controls both the House and Senate, there is a decent chance that legislation is passed that greatly limits the scope and/or reach of the CFPB’s authority. Perhaps the bigger question is who President-elect Trump nominates to take over from Director Chopra.

During his first term, President Trump’s first director, Mick Mulvaney, was a vocal critic and opponent of the Bureau he was tasked with leading. At one point, he famously requested an operating budget of $0.00 from the Federal Reserve. He nearly stopped enforcement actions and reduced the amount of civil monetary penalties obtained by the Bureau during his tenure. Conversely, President Trump’s second director, Kathy Kraninger, actually increased enforcement actions during her term. However, she also settled many actions for relatively small sums, including one for $1.00, while reducing consumer restitution as well. If the past is prologue, President-elect Trump may nominate a director who may be agnostic, if not downright hostile, to the Bureau’s stated mission of consumer protection.  

Impact On Current or Proposed Rules

President-elect Trump is likely to curtail the Bureau’s rulemaking activity. But not all rulemaking activities may be stopped. For instance, in September, President Trump made headlines by calling for a cap on credit card interest. While the proposal is not identical to the CFPB’s Final Rule curbing credit card late fees, it nonetheless may evidence President-elect Trump’s interest in reducing costs to consumers.

Assuming Republicans take complete control of Congress, President-elect Trump may also be able to utilize the Congressional Review Act (CRA) to roll back certain rules published by the CFPB. The CRA requires executive agencies to report new rules to Congress and then gives Congress sixty days to legislatively override such rules. That tends to be a high burden, as it requires a majority of both the House and Senate. Nevertheless, it is possible that in a Republican-controlled Congress, the Trump Administration would attempt to overturn recently finalized (or soon-to-be finalized) CFPB rules, including the proposed rule on consumer reporting of medical debt, the Dodd-Frank § 1033 rulemaking on a consumer’s personal financial data rights, the Bureau’s non-bank enforcement registry, and a host of recently final rules involving junk fees.

Rescission or Revisions to Existing Guidance

It is also nearly certain that President-elect Trump’s new CFPB director will look to rescind or revise interpretive rules, policy statements, and other non-rulemaking guidance issued by Director Chopra. Director Chopra has frequently relied on such guidance to shape the Bureau’s policies, often at the expense of the more formal and time-consuming notice-and-comment rulemaking process. Such guidance only has power and force if the new Director supports it. In fact, this is exactly what Director Chopra did with respect to certain policy statements issued by former Director Kathy Kraninger, including rescinding her policy statement on Abusive Acts from 2020. For example, a new director will likely revise or rescind the circular warning against “deception” in contract fine print, among others.

Elections have consequences, and a second Trump administration should have a significant impact on the Bureau’s current agenda under Director Chopra.