In the waning months of the Biden administration, the Consumer Financial Protection Bureau, or CFPB, released a flurry of new consumer protection rules, targeting everything from bank overdraft fees and credit card late fees to old medical debt on credit reports.
If the Democrats had fared better at the polls, then some of the rules might have taken effect by now. As it stands, the consumer agency itself is in limbo.
New President Donald Trump fired CFPB director Rohit Chopra and installed an acting director, Russell Vought, who ordered the agency to halt its work and shut its doors.
Elon Musk, the billionaire tasked with slashing Beltway budgets, broadcast Trump’s apparent intentions, and his own, in a Feb. 7 tweet that read, “CFPB RIP,” along with a tombstone emoji.
Trump has nominated Jonathan McKernan, a former Federal Deposit Insurance Corporation board member, as a new permanent head of the consumer watchdog group. But it remains to be seen what sort of agency McKernan might inherit.
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Most CFPB initiatives have obvious consumer appeal: Credit card customers would probably welcome lower late payment fees. But the financial industry has sued to block many of the rules, saying they might actually do more harm than good. A cap on overdraft fees, for example, could prompt a bank to stop protecting customers against overdrafts.
“You have to think, one way or another, these things will wind up in front of the Supreme Court,” said Mark Hamrick, senior economic analyst at Bankrate, the personal finance site.
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