Since newly Trump-appointed Treasury Secretary Scott Bessent has taken over the Consumer Financial Protection Bureau, the agency has mandated a complete halt of and review of services to “promote consistency” under the new administration.
Newsweek reached out to the CFPB via email for comment.
Why It Matters
The CFPB was first created after the 2008 banking recession to protect customers from unfair and predatory corporate behavior.
The halt means the Consumer Financial Protection Bureau (CFPB) will cease crafting regulations or enforcing any rules or investigations. The halt was “effective immediately,” The Washington Post reported.
What To Know
Republicans have attacked the CFPB as anti-business, with lawmakers calling to remove funding from the program. Department of Government Efficiency head Elon Musk has also pushed for Congress to eliminate the CFPB.
Former President Joe Biden‘s administration saw the CFPB make significant changes for predatory lenders under the CFPB’s former director, Rohit Chopra. The CFPB also lowered the burden of medical debt and helped customers see lower fees after missing credit card bills.
While under the direction of Chopra last month, the CFPB outlined new rules to eliminate unpaid medical debt on American’s credit reports. This move, approved to go into effect in March, would impact millions of Americans.
The CFPB has also been instrumental in fighting “junk fees” that unfairly target American consumers.
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What People Are Saying
American Bankers Association President Rob Nichols, in a statement: “We urge Secretary Bessent to begin reversing the damage caused by these misguided regulatory actions and stand ready to support his efforts to chart a better course for the Bureau.”
Treasury Secretary Scott Bessent, in a statement: “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.”
Senator Elizabeth Warren, in a statement: “Shutting down CFPB enforcement actions that are on the verge of delivering money into the pockets of working people is at odds with President Trump’s claim that he wants to lower costs for families — which he has done next to nothing on so far.”
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Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: “As with most moving pieces to the first weeks of the new administration, it’s difficult to know what components the CFPB halt will affect. The reason for the halt is to ensure the priorities of the Bureau are in alignment with those of the administration, but even this explanation does little to clarify exactly what position will be taken on medical debt.”
Kevin Thompson, a finance expert and the founder and CEO of 9i Capital Group, told Newsweek: “Bessent issued an order to halt any and all investigations and enforcement actions at this time. Based on his instructions, the agency will likely assess which payments need to be made and which enforcement actions should be disregarded.
“Given this directive, debt forgiveness efforts may be deprioritized as the administration focuses on reducing government spending. I truly believe they will eliminate whatever Biden has in place.”
What Happens Next
While Trump’s administration has been relatively quiet on medical debt, the halt will likely delay any Americans waiting to qualify for debt relief, Beene said.
“Unlike student debt forgiveness, medical debt forgiveness has been a topic this administration has been relatively quiet on both during the campaign and after entering office,” he said. “Regardless of whether medical debt forgiveness is supported or not, a halt to any existing or proposed procedures aimed at helping with debt relief is going to delay the many Americans who could qualify [from] receiving it.”
Thompson said that for junk fee regulations, many of the enforcement actions could be delayed or canceled altogether.
“Junk fees, such as overdraft fees and other charges imposed by financial institutions and corporations, have been under scrutiny for quite some time,” Thompson said.
“Some enforcement actions that were nearing payment may now be delayed or canceled altogether, depending on how the CFPB and Treasury secretary proceed. With multiple lawsuits pending, many cases may receive temporary relief, postponing or eliminating required payments.”
