Under President-elect Donald Trump, whose supporters have pledged widespread deregulation of businesses that handle American funds, consumer activists say they are bracing for significant changes at one of Washington’s newest financial watchdogs.
According to individuals who spoke to NBC News, the Consumer Financial Protection Bureau is considering which proposed regulations to finalize before Republicans regain control of the House, Senate, and White House in less than two months.
The CFPB, which was established by the Federal Reserve during the 2008 financial crisis and was the brainchild of Senator Elizabeth Warren, D-Mass., repealed banking restrictions during Trump’s first term while also scoring some victories for consumers. They included crackdowns on data breaches and a $1 billion settlement with Wells Fargo following a fraudulent account-opening scam.
More recently, however, Trump has appointed writers of Project 2025, which calls for the CFPB to be abolished, to high-level positions, and Republicans have signed proposals to defang the agency. Elon Musk, a multibillionaire Trump supporter who is expected to hold a high-level cost-cutting position, said on his social media site X: Delete CFPB on Wednesday.
Adam Rust, director of financial services for the Consumer Federation of America, a network of advocacy groups, stated that he would anticipate a deregulatory approach to regulations as well as attempts to abolish the agency itself.
“Breaking the CFPB is an open invitation to the worst actors in our economy to start screwing over working people again,” said Jesse Van Tol, the leader of the National Community Reinvestment Coalition, which works to develop wealth in underserved communities. He referred to the organization as the most successful working-class pocketbook guardian in contemporary American history.
Consumer advocates anticipate that Rohit Chopra, the director of the CFPB, will be ousted when Trump takes office. Chopra has led the agency during a period of aggressiveness. In an effort to control financial institutions, it has created a plethora of regulations and guidelines and recouped about $20 billion in customer relief.
Many of these initiatives are met with resistance from the financial services sector. The Consumer Bankers Association’s president and CEO, Lindsey Johnson, said in a statement that the CFPB has strayed from fact-based policymaking over the past four years and instead stumbled into political campaigning.
She claimed that rather than using real facts regarding consumer harm, the Biden administration’s war on junk fees, for instance, was based on political polls intended to help a reelection campaign. This led to a number of regulations that will eventually de-bank many Americans and raise expenses for almost all of them, some of which the current CFPB is hurrying to finalize.
On the other hand, the White House has maintained that its initiatives aim to reduce customer costs and combat inflationary financial practices. A request for comment from a Trump transition team official was not answered.
According to analysts, several of the CFPB’s guidelines, like as the one that was announced last week and expanded monitoring of digital payment systems like Apple Pay and Venmo, have already gained support from Republicans and are unlikely to be repealed. Vice President-elect JD Vance’s financial policy adviser congratulated the agency on X for stopping the debanking of conservative and conservative-coded sectors after the rule was finalized.
According to consumer groups, agency leaders have difficult decisions to make before Inauguration Day: they can either rush to enshrine additional protections that, if repealed under the Congressional Review Act, would stop future officials from proposing similar ones, or they can wait and hope that Republicans will leave well-received guidance in place.
According to someone familiar with leadership thinking who was not permitted to speak about it in public, CFPB officials are aware that they cannot guarantee their job for the ensuing four years. However, the individual stated that the actions taken by the current administration might turn out to be more resilient than some industry observers anticipate. According to the source, agency officials’ recent endeavors have required perseverance, resources, and priorities, particularly in the face of strong legal opposition, and their successors under Trump may encounter similar challenges.
The agency stated that it continues to conduct its work independently of political cycles, but it declined to speak on the record.
Much of what follows is political, just like everything else in Washington. What experts suggest might alter is as follows.
Limits on overdraft and insufficient fund fees
The biggest possible change, according to consumer activists, would be in the cost of bank overdrafts.
The CFPB reinforced the government’s authority to punish banks that charge consumers for inadequate cash in September, making it clear that the Electronic Fund Transfer Act requires an opt-in for such fees. Customers of smaller banks, some of whom have sued in response, may not see the same reprieve, even if many big banks have abandoned the practice in recent years.
“Everyone has had an overdraft, so that’s really where the rubber hits the road,” Rust added. This has nothing to do with some obscure, complex financial-protection rule that only those in the know can comprehend.
Because of this, experts predict that the new administration, which ran on a populist platform, would decide to ignore the guidelines.
Capped credit card late fees
However, advocates and attorneys say there is little chance that a previous decision that capped credit card fees would stand.
The measure, which lowered the maximum from $32 to $8 and was issued in March, quickly faced legal opposition. Card issuers contend that the changes will compel them to pass on greater costs to consumers, including those who pay their bills on time, and the matter is currently pending in the federal court system.
According to Armen Meyer, a financial policy consultant who has worked as a bank regulator and an executive in the fintech sector, you can definitely envision a future CFPB choosing to let the free market determine these fees and return [to] that $30 limit rather than maintain it at $8 and not vigorously defend that suit against the industry rule.
The shift back to a more detached attitude may resurrect grievances filed by consumer advocates during Trump’s first term. Then-CFPB Director Mick Mulvaney came under fire for actions that were perceived as eroding borrower protections.
Buy now, pay later protections
The administration swiftly erected barriers around BNPL services as their use soared during the outbreak. However, the CFPB decided that the installment lending businesses needed to adhere to the same rules as credit card issuers in the absence of new legislation.
According to Meyer, that will probably cause those safeguards to crumble.
Citing worries about expenditures and possible exploitation, he stated, “I believe the majority of people would agree with the general matter.” Regarding how it was done, the industry would disagree, arguing that it is incongruous and hinders their ability to conduct business.
The ruling permitted customers of firms like as Klarna and Affirm to contest charges and request reimbursements upon returns. In September, Chopra made it clear that the policy would first be based on good faith and that infractions would not be punished while it was being implemented.
Removal of medical debt from credit reports
The agency suggested barring medical debt from showing up on customers’ credit records this summer. Additionally, it cautioned businesses against pursuing payment on exaggerated or unconfirmed invoices in October, which sparked a fresh round of lawsuits from debt collectors who said it would be difficult to comply with those standards.
The government calculated that up to $49 billion will be deleted from 15 million credit reports as a result of its medical debt action.The CFPB will probably complete its plan before Trump takes office, according to legal experts who monitor the agency. Reuters said on Wednesday that officials are working to do just that, citing people with knowledge of the situation. Although it’s unclear how the new director might handle it, that would expose the legislation to congressional examination.
The CFPB stated that it continues to conduct its work independently of political cycles, but it declined to comment on the medical debt rulemaking.
Given that Colorado and New York recently implemented restrictions on medical debt reporting, the source with knowledge of agency decision-making stated that some state regulators are probably going to take the initiative on the matter in the upcoming months.
Similar legislation was sponsored by California Attorney General Rob Bonta this year, and he later wrote to the CFPB to support it for laying the groundwork for consumer protections and allowing states to implement more robust ones.
Like other policy matters, such as immigration, reproductive rights, and emissions regulations, the regulations pertaining to Americans’ financial affairs may become more location-specific.
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