180 Degree Turn in 100 days: The CFPB Under Trump's Second Term

Since January 20, there have been significant restructuring and policy shifts related to the Consumer Financial Protection Bureau (“CFPB”).

With the flurry of executive orders and policy shifts since Trump’s second inauguration, it is difficult to track the status of any federal agency and its function from one day to the next. Below is a concise summary of executive orders, appointments and removals, and regulatory activity concerning the CFPB during Trump’s first 100 days in office for his second term.

Removals/Appointments of Directors

• February 1: Rohit Chopra is removed from his position as CFPB Director.
• February 3: Secretary of the Treasury, Scott Bessent, is appointed as Acting Director of the CFPB.
• February 7, 2025: Just 4 days later, Russell Vought, Director of the Office of Management and Budget (OMB), assumed the Acting Director Role.
• February 11, 2025: Jonathan McKernan (former banking lawyer, advisor to the U.S. Treasury, and former Board Member of the FDIC) is nominated to be the permanent CFPB Director.

McKernan’s nomination has been withdrawn in favor of his more recent appointment to become undersecretary of domestic finance for the U.S. Department of Treasury.

Executive Orders and Budget Cuts Impacting the CFPB

• 14215 (Feb. 18) – directs independent regulatory agencies, including the CFPB, to submit regulations to the OMB for review prior to publishing. This EO also directs the OMB to establish performance standards and objects for independent agency heads, to review independent regulatory agency directors’ actions for compliance and consistency with the President’s policies and priorities, and to report periodically to the President regarding their performance.
• House Financial Services Committee cuts the CFPB’s funding from 12% to just 5% of the Federal Reserve’s budget. This follows the April 17 layoff notices to approximately 1,500 staff at the CFPB, which would leave only about 200 personnel. The layoffs are currently undergoing a legal challenge and are currently stayed by an injunction issued by the U.S. Court of Appeals for the District of Columbia.

CFPB Actions and Priorities

• February 3: Acting Director Bessent issues a directive halting all new enforcement actions, investigations, and rulemaking activities.
• February 8, 2025: Acting Director Vought ceases monitoring large banks, predatory lenders, and other financial institutions for consumer protection violations.
• May 9: CFPB issues list of nearly 70 policy and regulatory guides, spanning nearly 15 years, which would be rescinded. Director Vought explained that these documents, in providing legal interpretations and bureau priority announcements, either imposed unlawful requirements on impacted companies or unnecessarily increased regulatory burden.
• Recently, the CFPB has announced a shift in priorities away from rules concerning Buy-Now-Pay-Later plans and toward addressing financial abuse of veterans.

The future in leadership and enforcement style of the revamped CFPB remains to be seen. We will continue to monitor and share significant updates.