By Saleha Mohsin and Paige Smith | Bloomberg
Treasury Secretary Scott Bessent is now the acting head of the US Consumer Financial Protection Bureau, signaling a potential shift away from the aggressive enforcement and regulatory approach under Rohit Chopra.
It comes after Chopra was fired by the Trump administration. The Biden-era appointee’s term was marked by billions of dollars in fines and consumer compensation collectively against lenders such as Wells Fargo & Co., Goldman Sachs Group Inc. and Citigroup Inc.
“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,” Bessent said in a statement on Monday.
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The Trump administration has yet to decide whether Bessent will handoff oversight of the CFPB to another official in an acting capacity or if he will continue in that role until a permanent head is nominated, according to a person familiar with the matter.
In his first move as acting head, he sent a memo to CFPB staff instructing the agency to refrain from issuing any public communications, and halt activities including the issuance of final rules, settlement of enforcement actions or participation in litigation proceedings. They have also been instructed to suspend the effective date of any final rules that have not yet gone into effect, according to a memo viewed by Bloomberg News.
Emergency notices filed Monday in two pending lawsuits at the 5th US Circuit Court of Appeals in New Orleans said that lawyers for the agency would attend the scheduled hearings, but only to “respectfully request a pause in proceedings.”
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“The President removed the prior Director of the CFPB from his position,” lawyers for the agency said in the filing. “Counsel for the CFPB has been instructed not to make any appearances in litigation.”
Both cases scheduled for oral arguments on Monday involve challenges to CFPB rules brought by different industry groups.
Bartlett Naylor with Public Citizen, a consumer advocacy nonprofit in Washington, decried Bessent’s actions.
“An oligarch hedge fund manager serving only rich clients will bring no reasonable instincts to official management of an agency meant to protect vulnerable Americans from predators,” he said. “There’s every reason to worry he will be little more than a human auto-pen for the thugs intent on dismantling this agency.
The CFPB did not immediately return a request for comment.
Legal fight
In 2017, Trump picked then Office of Management and Budget Director Mick Mulvaney to serve as acting CFPB director, triggering a dispute with Deputy Director Leandra English over the role.
The issue headed to court, with the Trump administration saying at the time it had the power to appoint an interim head under the Federal Vacancies Reform Act while English argued she should be the temporary director under the Dodd-Frank Act.
English resigned from the agency in 2018 after Trump nominated Kathy Kraninger to serve as the permanent CFPB director.