On February 1, 2025, President Donald Trump terminated Rohit Chopra’s tenure as the Director of the Consumer Financial Protection Bureau (CFPB). Early on the morning of February 3, 2025, the CFPB issued a press release noting that recently-confirmed Secretary of the Treasury Scott Bessent had been named as the Acting Director of the CFPB, pursuant to the Federal Vacancies Reform Act.
Within an hour of the press release, major media reported significant movement by Secretary Bessent, ordering effectively all work at the CFPB to be paused. Mr. Bessent reportedly sent an internal email to all CFPB staff, ordering them to: stop work on enforcement actions, investigations, and litigation; not to approve or issue any proposed rule or guidance, formal or informal; and to suspend the effective dates of all final rules that have yet to take effect. The communication apparently also told CFPB employees that they cannot open new investigations, or continue currently pending investigations, and ordered that the CFPB could not enter into any consent orders or enforce past settlements during this time.
Interestingly, Bessent also ordered CFPB attorneys to stop defending regulations in court, and the effect was immediately felt. The CFPB was scheduled to argue in front of the U.S. Court of Appeals for the Fifth Circuit on the morning of the 3rd, in two separate matters: Chamber of Commerce of the United States of America et al. v. CFPB, in which the CFPB is appealing the district court’s decision finding that the CFPB exceeded its statutory authority in issuing an update to its Unfair, Deceptive, and Abusive Acts and Practices Examination Manual to include discrimination; and Texas Bankers Ass’n v. CFPB, defending the district court’s decision upholding its small business data collection rule. Prior to the commencement of the arguments, the CFPB filed in both matters an “Emergency Notice” “to inform the Court of developments relevant to today’s hearing.” The CFPB informed the Court that the President had removed the “prior Director”, and that “Counsel for the CFPB has been instructed not to make any appearances in litigation except to seek a pause in proceedings.” The notice further stated that “counsel for the CFPB will appear at today’s hearing but will not present argument other than to respectfully request a pause in proceedings.”
In Texas Bankers Ass’n, the Fifth Circuit held the oral argument as scheduled on the morning of February 3. The argument began with counsel for Texas Bankers Association noting that the CFPB no longer opposed the Association’s request for tolling of the rule’s deadline until the Court holds another argument or issues a subsequent order. When the CFPB’s turn came to argue, the Court acknowledged the difficult position that the CFPB attorneys were in, and the attorney for the CFPB repeated the request for a pause. One of the panel judges asked for clarification on the meaning of “pause” with respect to the matter, but the CFPB attorney was unable to respond with clarity at the time.
The argument in Chamber of Commerce was less eventful, with the Court granting the request to continue the day’s proceedings until after counsel for the parties could meet and confer.
While the length of this stop-work order is not known, all activity at the CFPB has now effectively ended. Companies subject to CFPB regulation and supervision should consider carefully the implications of these actions on current and future actions. Saul Ewing will continue to monitor these and other actions affecting the CFPB and the consumer financial services industry.
