CFPB moves to finalize rules before Trump can ‘delete’ the agency

The U.S. consumer finance watchdog is moving ahead with rulemaking in the final weeks of Joe Biden’s Democratic administration, in a bid to advance consumer protections before President-elect Trump overhauls the agency, said three people familiar with the agency’s thinking.

The Consumer Financial Protection Bureau hopes to finalize a ban on including medical debt in credit reports, a proposal championed by Vice President Kamala Harris, and to propose restrictions on data brokers which track and collect personal data, said one of the sources who has direct knowledge of the matter.

On a Nov. 8 call with reform advocacy groups, CFPB director and Biden appointee Rohit Chopra said the agency was still considering adopting more regulations, according to the other two sources with direct knowledge of the call.

The sources asked for anonymity to discuss sensitive policy matters.

The decision by Chopra to keep rulemaking, which Reuters is the first to report, is a blow for firms that had hoped the agency would shelve efforts to curb their businesses after Trump’s Nov. 5 victory.

It also defies congressional Republicans, who have called for agencies to cease rulemaking, and contrasts with the Biden administration’s bank regulators who told Congress last week they will stop work until Trump takes power in January.

A CFPB spokesperson said Chopra attended the call to listen to the groups’ concerns but did not share his plans.

“Director Chopra has not made any decisions about what the bureau may finalize before the change in administrations but we are continuing to work,” said the spokesperson, adding the CFPB is an independent agency which carries out its work regardless of political cycles.

The agency, which under Chopra has pursued major rules, has at least seven other pending proposals, including curbs on fees lenders charge on overdrafts and transactions declined for insufficient funds, and rules governing paycheck advances.

‘Delete CFPB’

Created following the 2008 mortgage crisis to protect consumers from predatory lending, the CFPB has been repeatedly targeted by Republicans and industry groups who argue it is a politically unaccountable impediment to free enterprise.

Trump has not outlined plans for the CFPB, but Democrats worry his administration and a Republican Congress will weaken the agency.

On Wednesday, billionaire Elon Musk and investor Vivek Ramaswamy, whom Trump has tasked with slashing government costs, called for the CFPB to be deleted. Ramaswamy separately said all last-minute rules merit “special scrutiny” and could be rescinded.

“Everybody expects the Trump administration to … weaken if not kill consumer financial protection,” said Dennis Kelleher, CEO of reform group Better Markets.

While agencies are not required to halt rulemaking ahead of a new administration, some have opted to do so in the past. Finalizing new rules at the eleventh hour is risky, since congressional Republicans, who will control both chambers next year, could overturn them via the Congressional Review Act.

That law allows Congress to rescind recently-adopted rules, but such resolutions also bar the agency from writing a similar one, restricting its powers and sometimes creating unforeseen consequences.

Still, Republicans are unlikely to overturn more than a handful of Biden administration rules with two years to push through other priorities, like tax reform and crypto legislation, said one of the sources and industry executives.

With Republicans taking a sharp populist turn in recent years, some of Chopra’s rules may also enjoy bipartisan support. Republican Senator Marco Rubio, Trump’s pick to be Secretary of State, for example, co-sponsored a bill with Democrat Elizabeth Warren in 2022 seeking to impose some curbs on data brokers.

Last week, the CFPB finalized regulations subjecting payment services from tech giants like Google and Apple to CFPB supervision. Big Tech has also been a target of some Republicans.

According to advocacy organization Americans for Financial Reform, recent polling shows overwhelming bipartisan support among voters for rules on overdraft protections and medical debt.

Trump transition spokeswoman Karoline Leavitt did not address questions about Biden rulemaking, but said voters had given Trump a mandate to act on campaign promises. Trump’s campaign promised to slash burdensome rules.

—Douglas Gillison and Pete Schroeder, Reuters