Scott Bessent has been appointed by President Donald Trump as the new acting head of the Consumer Financial Protection Bureau (CFPB), following the abrupt departure of Rohit Chopra. This appointment, which was officially announced on Monday, seems to be part of the Trump administration's strategy to reshape federal oversight of consumer financial protections.
Chopra, who had served as CFPB director since being appointed by former President Joe Biden, confirmed through social media on Saturday his term had concluded earlier than expected. His departure came just two weeks after Trump was inaugurated for his second term, indicative of the administration’s rapid shifts in personnel aimed at realigning federal agencies.
Bessent, who was confirmed as Treasury Secretary shortly before this appointment, expressed optimism about his new role. “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,” he stated, illustrating the new administration's focus on economic policies.
Upon taking command at the CFPB, Bessent launched immediate operational changes. He sent out directives pausing most of the agency’s regulatory work. According to reports from The Washington Post, staff were instructed to halt all regulatory proposals, cease current investigations, and suspend any public communications. Bessent cited the need for these measures “to promote consistency” with the administration’s overarching goals, which may signal major changes within the agency.
During his tenure, Chopra had taken aggressive steps to expand the CFPB’s regulatory authority, especially targeting the banking sector with intentions to mitigate burdensome credit card fees and promote consumer protections. Those traditional objectives were evident as he noted his hopes for the bureau’s next leader to pursue these reforms, even hinting at the possibility of introducing caps on credit card interest rates.
While enjoying support from progressive consumer advocates, Chopra's efforts had drawn sharp criticism from banking groups. Many claimed his reforms represented overreach, and stakeholders were apprehensive about the regulatory burden imposed on financial institutions.
Senator Elizabeth Warren (D-Mass.) voiced her concern over Trump’s decision to appoint Bessent. “Shutting down CFPB enforcement actions... could have negative consequences for Americans,” she argued. Warren, who was instrumental in the founding of the CFPB post-2008 financial crisis, suggested Bessent's actions contradicted Trump’s campaign promise to reduce financial burdens on families.
The banking industry had anticipated Chopra’s firing, with many believing such changes would occur under the Trump administration's leadership. Rob Nichols, president of the American Bankers Association, commended Bessent’s appointment, stating, “We urge Secretary Bessent to begin reversing the damage caused by these misguided regulatory actions.” This sentiment echoes widespread calls from banking officials for recalibrated regulatory oversight.
Similarly, Lindsey Johnson from the Consumer Bankers Association expressed optimism about Bessent's ability to reset the CFPB's priorities. “We look forward to seeing who President Trump will choose to lead the CFPB on a permanent basis,” Johnson said, reinforcing hopes for industry-friendly reforms moving forward.
Despite backing from financial trade groups, progressive consumer protection advocates warned against potential fallout from Bessent's appointment. Christine Chen Zinner of Americans for Financial Reform emphasized the need for the CFPB to remain true to its mission: “The CFPB was created through legislation passed by Congress and the law gives it a job to do... Bessent is not permitted to simply ignore.”
The CFPB was established after the Great Recession of 2008 to protect consumers from deceptive financial practices, facilitating accountability across the financial industry. Its creation marked significant regulatory reform aimed at safeguarding everyday consumers, helping provide over $21 billion relief to more than 200 million Americans, as claimed by the agency.
This transition might herald significant changes at the CFPB as the agency contemplates its future under Bessent's leadership. The immediate suspension of operations indicates potential for sweeping policy shifts, possibly venturing away from its established consumer protection role to align more closely with the Trump administration’s economic agenda. It raises questions about the future of financial regulation and consumer advocacy as the balance of power within federal agencies continues to shift.
With the nomination of Bessent as acting director, the CFPB stands poised on the brink of transformation, reflecting the broader ideological clashes over financial regulation and consumer protections—clashes destined to intensify as new leadership navigates these controversial waters.