NEWS: On Monday, the Trump administration named Treasury Secretary Scott Bessent to serve as the acting director of the Consumer Financial Protection Bureau (CFPB) after firing CFPB Director Rohit Chopra over the weekend. Bessent will serve as acting director until the senate confirms a new nominee.
Within an hour of Bessent being appointed, an unsigned memo from the office of the director was sent to CFPB staff, instructing them to halt nearly all work. The contents of that memo are being widely reported in the news.
Specifically, the memo directed CFPB staff:
- Not to approve or issue any proposed or final rules or formal or informal guidance;
- To suspend the effective dates of all final rules that have been issued or published but that have not yet become effective;
- Not to commence, take additional investigative activities related to, or settle enforcement actions;
- Not to issue public communications of any type, including publication of research papers;
- Not to approve or execute any material agreements, including related to employee matters or contractors; and
- Not to make or approve filings or appearances by the Bureau in any litigation, other than to seek a pause in proceedings.
The memo was not surprising, given that President Trump issued an executive order directing the heads of all federal agencies to stop all rulemakings. He issued a similar order in 2017, as did President Biden in 2021, although at the time it was unclear if that order covered independent agencies like the CFPB.
In a letter yesterday America’s Credit Unions urged the CFPB “to immediately pause all active rulemaking, including proposed rules with open comment periods and the implementation of recently finalized rules.”
What it means for credit unions
Suspending upcoming effective dates and pausing litigation will affect many recently finalized and proposed CFPB rules. Industry experts have cited the following examples, but it remains unclear how other rules (like the CFPB’s open banking regulation) will be impacted.
$5 overdraft fee final rule
The rule, which was set to take effect Oct. 1, 2025, applies only to “very large financial institutions,” meaning insured credit unions and other depository institutions with total assets of more than $10 billion. Under the rule, those institutions would have three options when charging for overdrafts: 1) Capping their overdraft fee at $5; capping their fee at an amount that covers costs and losses; or disclosing the terms of their overdraft loan just like other loans. This League Compliance Courier summarizes the rule.
In January, The League joined 17 other U.S. credit union leagues and associations in filing an “amicus” brief (i.e., a “friend of the court” brief) in support of America’s Credit Unions’ federal litigation against the rule. Last week, the House Financial Services Committee posted a draft resolution to overturn the rule under the Congressional Review Act.
The effective date of that rule now appears to be suspended, per the CFPB memo. It is unclear whether the CFPB has sought a postponement of the pending litigation yet.
$8 credit card late fee final rule
The CFPB issued this rule last year, setting a ceiling of $8 per incident for credit card late fees. The rule, which only applies to card issuers with at least one million open accounts, also ends automatic inflation adjustments on late fees. This League Compliance Courier summarizes the rule.
This rule was to have taken effect in May 2024, but it has been enjoined by a federal court in Texas.
The rule’s effective date now appears to be suspended, per the CFPB memo. It is unclear whether the CFPB has sought a postponement of the pending litigation yet.
Medical debt credit reporting final rule
This rule was to take effect March 15, 2025. Finalized just weeks ago, in mid-January, it amended Reg. V to prohibit creditors (including credit unions) from using medical debt information to determine credit eligibility, with only limited exceptions, and to stop medical debt from appearing in credit reports. This League Compliance Courier summarizes the rule.
Legal challenges were filed almost immediately after the final rule was published, including a lawsuit by the Cornerstone Credit Union League, which asked a federal court in Texas to stop the law from taking effect.
The rule’s effective date now appears to be suspended, per the CFPB memo. It is unclear whether the CFPB has sought a postponement of the pending litigation yet.
Small business data collection final rule.
This rule (which implements Section 1071 of the Dodd-Frank Act and is sometimes called the 1071 rule) requires many financial institutions to collect and report data on lending to small businesses with gross revenue of $5 million or less. The rule is designed to help regulators and others uncover discrimination in small business lending.
Compliance was required for some lenders as soon as July 2025, with smaller lenders given later deadlines. The League’s ii Release No. B083 was recently added to summarize the rule.
The CFPB has reportedly asked for an adjournment of a lawsuit challenging the rule. Oral arguments had been scheduled to take place Monday in an appeal by the Chamber of Commerce.
The effective date of that rule now appears to be suspended, per the CFPB memo.
Proposed data broker rule.
This proposal, which would amend Reg. V and require data brokers to be treated as credit reporting agencies, will be left as is and likely not be finalized, according to America’s Credit Unions. The League had asked credit unions for comments on the proposal.
Proposed digital payments interpretive rule.
This proposal would expand how Reg. E applies to digital payment platforms. America’s Credit Unions says that it does not expect the rule to be finalized.