Trump names Treasury Secretary Bessent to run consumer watchdog CFPB

Bessent immediately ordered the CFPB staff to stop working on pending actions. Trump must now nominate a permanent director or try to close the agency. Bessent photo via Treasury Dept.

Bessent immediately ordered the CFPB staff to stop working on pending actions

President Trump today named Treasury Secretary Scott Bessent to run the Consumer Financial Protection Bureau and he immediately shut it down.

In an email, Bessent instructed the CFPB staff to stop working on enforcement actions and to suspend the effective dates for rules not yet in effect.

That follows the ouster of Biden appointee Rohit Chopra, who had more than a year left on his term.  The normal next move would be for Trump to nominate a permanent replacement for Chopra but the White House is under pressure from banking and other financial service interests to shut the agency down.

Chopra was widely reviled for aggressive enforcement of consumer lending, hidden fees, credit ratings and other topics dear to bankers' hearts.

Shutting the agency down might not be easy. It was established by Congress in 2011 following the nation's financial meltdown of 2007-08 at the urging of Sen. Elizabeth Warren (D-Mass.), who has vowed to fight for the agency.

“So I get there’s big talk, but the laws supporting the CFPB are strong, and support across this nation from Democrats, Republicans, and people who don’t pay any attention at all to politics, is also strong,” Warren said.

“The CFPB is here to stay,” she said in a Washington Post report

Cruz wants to defund

Republican lawmakers may differ, however. Sen. Ted Cruz (R-Texas) hs said he will introduce a measure to cut the agency's funding, effectively neutering or killing it. 

“The CFPB is an unelected, unaccountable bureaucratic agency that has imposed burdensome and harmful regulations on American businesses, banks, and credit unions,” Cruz shared in a statement, first reported by The Wall Street Journal. He has called the agency an “unchecked Obama-era executive arm.”

Cruz last week inroduced a measure, the Defund the CFPB Act, that would "limit to $0 the amount" that the agency could request. 

“The CFPB is an unelected, unaccountable bureaucratic agency that has imposed burdensome and harmful regulations on American businesses, banks, and credit unions,” Cruz said in a statement.

Consumer organizations object

The National Consumers League issued a statement saying it "strongly condemns" plans to turn CFPB's operations over to the Office of Management and Budget (OMB) or the Department of the Treasury. 

“It is crucial that we keep the CFPB strong, independent, and fully operational in order to protect consumers nationwide from financial harm,” said John Breyault, vice president of public policy at NCL. 

"Congress explicitly designed the CFPB to be an independent agency within the Federal Reserve System. Executive actions to place the agency under OMB or Treasury supervision are likely illegal," the NCL said. 

"NCL believes that undermining the CFPB’s independent structure would take the country backward, eroding the essential consumer protections that have helped combat abusive practices in the financial industry, such as payday lending, illegal credit card fees, deceptive loans, and mortgages, and more."

The Center for Responsible Lending (CRL) cautioned against abandoning the CFPB's efforts to protect consumers. 

"The CFPB is required to ensure that our financial marketplace operates in a way that both benefits and protects consumers," said Mitria Spotser, CRL Vice President and Federal Policy Director. 

CRL is committed to working with the CFPB’s new leadership to fulfill that mandate, which is not just a matter of law, but also the American public’s will. Annual surveys from a bipartisan polling team consistently show that Republican, Democratic, and independent voters all strongly support the CFPB’s mission.