Consumer Financial Protection Bureau shakeup: Chopra out, Bessent in charge

The Consumer Financial Protection Bureau, a watchdog agency Republicans have tried to dismantle or significantly scale back, is the latest shakeup in Donald Trump’s efforts to remake the federal government.

Trump fired Rohit Chopra, the agency’s director and a Biden appointee, over the weekend and installed Scott Bessent, a billionaire hedge fund manager who now serves as treasury secretary, as acting director. Bessent began freezing the agency’s operations on Monday.

The CFPB was founded in 2010 with a broad mandate to protect Americans from unfair and predatory financial practices.

In recent months, Chopra led the CFPB to rein in credit card late fees and overdraft fees, along with “junk fees” hidden in hotel and event ticket bills. The moves drew protests from banks and trade groups like the Consumer Bankers Association.

A less aggressive approach is expected from Bessent, founder of Key Square Capital Management, who was sworn in as treasury secretary last week. According to CNBC, the Consumer Bankers Association said it was “pleased” with Bessent at the CFPB.

“We’re hopeful that Secretary Bessent will take into account the real-world ramifications regulations have on America’s leading banks, the millions of consumers they serve, and the economy as a whole,” CBA president Lindsey Johnson said Monday.

Bessent has already paused a wide variety of CFPB work, including “all rulemaking, communications, litigation, and other activities,” according to an email obtained by Bloomberg Law. The email instructed the agency to “suspend the effective dates” for all policies that haven’t yet taken effect, and to also “not to approve or issue” any proposed or final rules.

Some of the affected policies include a proposed $5 cap on overdraft fees charged by banks, and a rule that removes unpaid medical bills from credit reports.

The CFPB had a pending lawsuit against JPMorgan Chase, Bank of America and Wells Fargo over their handling of fraud on Zelle, alleging the banks failed to investigate cases and reimburse consumers.

According to Bloomberg, an anonymous source from inside CFPB described the situation as an apparent attempt to shut down the entire agency. It has not responded to requests for comment, Bloomberg reported.

In November, Elon Musk, the world’s richest person who is leading an effort to slash the federal workforce, said he wanted to “delete” the CFPB because it’s one of “too many duplicative regulatory agencies” in the government.