CFPB put on mothball status

Rohit Chopra is out as director of the Consumer Financial Protection Bureau, and all of the bureau's work is now on hold. Chopra was fired by President Trump on Feb. 3, 2025, and Treasury Secretary Scott Bessent was named acting director of the bureau.

Upon taking on leadership at the consumer watchdog agency, Bessent instructed the agency "to stop all rulemaking, communications, litigation and other activities," Bloomberg Law reported.

In a brief statement posted on the bureau's website, Bessent said, "I look forward to working with the CFPB to advance President Trump's agenda to lower costs for the American people and accelerate economic growth."

A call to safeguard consumers

The CFPB was created under the Dodd-Frank Act, which was passed in reaction to the financial crisis of 2008. The crisis was seen as having devastated the financial lives of millions of Americans, leading to calls for stronger accountability for financial services firms and better safeguards for consumers.

Prior to its creation, consumer financial protections were fragmented across multiple agencies, which were focused primarily on regulating financial institutions, not safeguarding consumer interests. CFPB's mission was to focus exclusively on consumer protections like deceptive and abusive financial practices, along with promoting financial literacy.

It supervises banks, credit unions and non-bank providers of financial services (like payday lenders, mortgage brokers and debt collectors) to ensure compliance with consumer protection laws. And it operates a consumer complaint portal, where consumers can report issues with financial products.

Chopra worked on the implementation team that helped set up the CFPB and served a stint as the agency's assistant director. In 2017 he was appointed to the Federal Trade Commission before being appointed CFPB chief in 2021 by then President Biden

Stop work order

Republicans have long chomped at the bit to sideline the CFPB or do away with it altogether. During the first Trump Administration the agency did little, if any, rulemaking. And during the presidential campaign, Elon Musk, a close ally of President Trump, called for the agency to be eliminated altogether.

During President Trump's first term in office, Mick Mulvaney, a vocal critic of the bureau was appointed director—a position he held in tandem with his role as director of the Office of Management and Budget. During Mulvaney's tenure, the agency issued few regulatory actions, emphasizing voluntary compliance instead.

Under former President Biden, the CFPB took an active pro-consumer stance. For example, in 2024, the agency issued an interpretive ruling confirming that buy now, pay later companies must provide consumers with the same rights and protections that are associated with credit cards.

Chopra's tenure was also marked by billions in dollars in fines and consumer compensation against lenders such as Citigroup and Wells Fargo & Co.

In one of his last actions as head of the bureau, Chopra led an action against Block, owner-operator of the peer-to-peer payment app Cash App, requiring it to refund and pay other redress up to $120 million to consumers for shirking its responsibilities to protect consumers from fraudsters.

On November. 21, 2024, the CFPB finalized a rule that subjects Big Tech companies offering digital payment apps, including Block, to the same regulatory oversight as large banks and other financial institutions. This rule, which went into effect in late December 2024, allows the CFPB to oversee digital payment processors' compliance with federal privacy and fraud laws through proactive examinations.

Controversy around acting chief

The news of Chopra's departure and Bessent taking over at the bureau comes as Bessent is under increasing scrutiny for allowing Musk's Department of Government Efficiency (DOGE) access to the payment system maintained by the Treasury Department to collect and disburse funds.

That system contains sensitive personal information on millions of Americans, including data on government contractors; Social Security, Medicare and Medicaid recipients; and even tax refunds.

The move prompted a letter from Senator Elizabeth Warren, D-Mass., who was instrumental in setting up the CFPB, to the newly appointed Treasury Secretary. "It is extraordinarily dangerous to meddle with the critical systems that process trillions of dollars each year and are essential to preventing a default on the federal debt," she warned, adding that it "could trigger a global financial crisis."

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