Trump Names Treasury Secretary CFPB Director; Republicans Look to Rein in Agency
Treasury Secretary Scott Bessent will serve as acting director of the Consumer Financial Protection Bureau, the agency announced Monday. CFPB has key privacy authority under the Gramm-Leach-Bliley Act (GLBA). Capitol Hill Republicans told us in recent interviews they plan to use budget negotiations to rein in the agency's cost and scope.
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Former Director Rohit Chopra announced the end of his tenure Saturday. His statement to President Donald Trump noted the CFPB’s potential rule of regulating data brokers under the Fair Credit Reporting Act (see 2501070031), a proposal now in jeopardy under Republican control. Chopra said he hopes the next director “will continue to be a pillar of restoring and advancing economic liberty in America.”
Bessent, in his statement, said, “I look forward to working with the CFPB to advance President Trump’s agenda to lower costs for the American people and accelerate economic growth." The White House didn’t comment Monday on Bessent’s ability to helm both Treasury and CFPB.
The CFPB enforces GLBA requirements related to privacy notices and data-sharing restrictions under Regulation P. The agency under Chopra urged states to work with the CFPB to determine whether their data privacy law provisions are preempted under Regulation P.
Republicans told us they hope Congress can hold the CFPB more accountable and potentially subject the agency to the regular appropriations process. Based on the current statute, the Federal Reserve can grant the CFPB funding at its discretion. Elon Musk in November urged the federal government to “delete” the CFPB because there are “too many duplicative regulatory agencies.”
For Sen. Bill Hagerty, R-Tenn., who co-authored CFPB appropriations legislation in June, “Accountability is something that is sorely lacking at the CFPB.” Hagerty said he’ll be in touch with House Financial Services Committee Chairman French Hill (R-Ark.) about budget talks. Congress’ current continuing resolution runs through March 14.
Hill said in a statement Monday that he looks forward to working with Bessent to subject the CFPB to the appropriations process, turn it into a bipartisan commission and set “appropriate statutory guardrails.”
Sen. Elizabeth Warren, D-Mass., on Saturday defended Chopra’s record. If Trump and Republicans “decide to cower to Wall Street billionaires and destroy the agency, they will have a fight on their hands,” she said. Warren formulated the concept of the CFPB and was heavily involved in working with then-President Barack Obama to create the agency before her election to the Senate.
The Republican consensus is that the CFPB “needs to join the rest of the federal government,” said Sen. John Kennedy, R-La. “We need more balance in [CFPB] rulemaking so that the benefits and costs of a rule are carefully considered.”
Chopra announced the potential data broker rule on Dec. 3, with public comments due March 3. Trump in early January ordered a regulatory freeze, directing that agencies should stop sending Biden administration rules to the Federal Register until the White House has reviewed them (see 2501230053). Bessent reportedly ordered a freeze on all CFPB rulemaking, communications and litigation. The agency didn't comment Monday.
Congress was “derelict in its duties when they created [the CFPB] without oversight to begin with,” said Sen. Mike Rounds, R-S.D. “Whatever we could do to rectify that, I would be supportive.” On the CFPB’s funding mechanism, he said, “When you have bureaucrats that are unaccountable to anybody, it’s out of control. I think the CFPB is a great example of that. I would support whatever is necessary to assist in actually having elected officials be accountable.”