WASHINGTON – The Consumer Financial Protection Bureau, a federal agency designed to protect consumers from the banking industry in the wake of the Great Recession, is halting its operations, according to news reports.
The change comes shortly after Trump announced he appointed Treasury Secretary Scott Bessent to be acting director of the bureau, replacing Biden appointee Rohit Chopra, whom Trump fired over the weekend.
Bessent and his aides sent out an email to staffers at the bureau on Monday ordering them to stop conducting probes, implementing rules, providing public communications and other activities, according to the Washington Post and Bloomberg Law.
The latest move was taken “to promote consistency with the goals of the administration,” according to the email obtained by multiple news outlets.
The move sparked criticism from Democrats, who argued that it could have negative consequences for Americans.
“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,” Sen. Elizabeth Warren, D-Mass., helped create the bureau, said in a statement.
Rep. Pramila Jayapal, D-Wash., wrote on X, formerly Twitter, that the bureau exists to “protect YOUR data and interests, stand up to giant corporations, and bring BILLIONS of dollars back to the American people who are scammed out of their hard-earned money.”
“Trump’s appointee just froze the entire bureau’s work,” she wrote.
The Consumer Financial Protection Bureau will also no longer be defending banking rules in court that were put in place under former President Joe Biden, in cases challenging the scope of the bureau’s authority, according to Reuters.
The bureau is an independent agency and housed under the Federal Reserve, and the president selects its leader. Chopra was appointed to a five-year term that would have ended in 2026.
What does the Consumer Financial Protection Bureau do?
The Consumer Financial Protection Bureau was established as an independent agency in 2011.
It plays a key role in investigating consumer complaints about how companies have treated them, monitoring financial markets for potential fraud and abuse, and working to educate consumers about personal finance, like mortgages and credit cards.
It also enforces laws that aim to end discrimination in consumer finance, such as the Truth in Lending Act which requires lenders to provide consumers with information about loan costs. It has proposed and finalized rules that reign in excessive credit card and overdraft fees.
The agency has obtained over $21 billion in financial relief, it says on its website, for more than 200 million Americans from companies it has investigated and fined.
Republicans for years have called for the agency to be abolished.
Mick Mulvaney, a former Republican congressmember and White House budget director in Trump’s first term, told the Credit Union Times in 2014 that the agency has been a joke “in a sick, sad kind of way.” He argued that there’s little congressional oversight over the bureau, which gets its funding from the Federal Reserve, and that it has “tremendous authority over financial institutions.”
Elon Musk, the world’s wealthiest person and an influential voice in the Trump administration, called for the bureau to be abolished in November.
Progressive groups, in turn, have argued that the bureau has protected Americans’ financial interests.
“The CFPB… has made major contributions to families’ economic security by standing up for everyday people against Wall Street, predatory lenders, and other financial services companies trying to rip them off,” said the nonprofit group Americans for Financial Reform in a November statement. “Weakening the CFPB, slowing its work, or steering it to favor industry over the public interest would give bad actors a green light to do their worst, and further deepen this country’s racial wealth gap.”
Contributing: Andrea Riquier, Reuters