League InfoSight Highlight: What will happen with the CFPB and Proposed Regulations?

Posted: Feb 7, 2025 | Author:

CFPB regulations

This past weekend, Rohit Chopra was let go as the director of the Consumer Financial Protection Bureau. While his position had a five-year term, the Supreme Court ruled that the president could fire the director at will. This didn’t come as a surprise; this administration took aim at the CFPB during its first term as well. Treasury Secretary Scott Bessent was put in place as the acting director of the CFPB. Quite a few articles have circulated about an email to staff and the suspension of rules/guidance, but what does that really mean for credit unions?

Executive Branch

The president doesn’t have the power to unilaterally rescind or cancel existing rules.
The president issued an executive order that requires an agency promulgating a new rule, regulation, or guidance to identify at least 10 existing rules, regulations, or guidance documents to be repealed.
The acting CFPB director can unilaterally withdraw guidance, pause pending rulemaking, and suspend new rulemaking. He cannot withdraw or amend rules already finalized. This would need to be done through the traditional notice and comment process.

Legislative Branch

Some rules (those finalized around or after Aug. 1, 2024) are subject to the Congressional Review Act. The House and Senate can pass a joint resolution of disapproval, and if signed by the president, the rule is canceled, and the promulgating agency is not permitted to issue a new rule in substantially the same form.
Congress, of course, can legislatively influence rulemaking. For example, Congress could amend Section 1071 of the Dodd-Frank Act (small business lending data collection), which would require a change to the CFPB’s implementing regulations.

Judicial Branch

CFPB can choose to stop defending rules that are currently subject to court challenge.
CFPB, in many cases, is asking for a continuance of current proceedings to allow more time for the new leadership to figure out its position on the rule.
CFPB would likely be unopposed to a request for an injunction to delay the mandatory compliance date of the upcoming rule while the agency takes time to figure out its position. In fact, this is exactly what happened at the 5th Circuit earlier this week. The CFPB said they would be unopposed to the plaintiffs asking for a stay of the mandatory compliance dates, which is probably necessary since Tier One institutions must begin complying in July of this year (small business lending data collection).

Keep your eye on InfoSight and CU PolicyPro for additional updates and information as we continue to learn more and create resources to assist with compliance.