CFPB fires Rohit Chopra, ceases active litigation

The Trump administration fired Consumer Financial Protection Bureau Director Rohit Chopra on Feb. 1, prompting questions regarding pending cases and the bureau’s direction. 

President Donald Trump has appointed Secretary of the Treasury Scott Bessent as acting director of the CFPB, according to a bureau release today. 

It’s been an honor serving as your @CFPB Director.

Every day, Americans from across the country shared their ideas and experiences with us. You helped us hold powerful companies & their executives accountable for breaking the law, and you made our work better.

Thank you.  pic.twitter.com/JD7lIcwmHa

— Rohit Chopra (@chopracfpb) February 1, 2025

The leadership change does not come as a shock, Jim McCarthy, founder and chairman of consulting agency McCarthy Hatch and a founding member of the CFPB, told Bank Automation News, a sister publication to Equipment Finance News. “Since the Supreme Court decided that the director can be terminated, it is expected to have a director shift at the change of administration.” 

As leadership changes, regulation is likely to experience a shift as well, McCarthy said.  

“I expect the junk fee regulation to be repealed as well as the overdraft fee proposal,” he said. “Any actions taken by Chopra since August will be under consideration for overturning. The CFPB will focus on examination and supervision and less on enforcement.” 

Section 1071 faces murky future

Bessent immediately paused rulemaking, communications, litigation and other activities at the CFPB, according to Bloomberg reports. 

Any CFPB litigation that has not reached a settlement or received a final judgement could be subject to review under new leadership, Jason Bichsel, member of law firm McGlinchey, told EFN sister publication Auto Finance News.   

“The new administration is going to review anything that was pending, and the likelihood is that some of the pending rulemaking or cases may be abandoned or dismissed,” he said. This includes cases the CFPB has brought against entities and those that have been brought against the bureau to halt enforcement of its rules, he noted. 

Bessent’s decision casts an air of uncertainty over Section 1071 of The Dodd-Frank Act, which directs financial institutions to collect and report data from loan applications by small businesses to the CFPB. The rule, set to take effect July 18, will create “significant paperwork and data management burdens that slow down credit access for those small businesses,” Crest Capital President Mark French previously told EFN. 

In April 2023, the Texas Bankers Association filed a lawsuit against the CFPB, alleging that it exceeded its statutory authority and failed to consider industry feedback when implementing Section 1071. After a federal court in the Southern District of Texas ruled in August 2024 that CFPB had not exceeded its authority, the TBA and American Bankers Association appealed the decision and were granted a preliminary injunction to halt Section 1071.

The oral argument for the appeals case was slated for today at the 5th U.S. Circuit Court of Appeals in New Orleans. However, CFPB lawyers have been instructed at hearings to “ask for a pause in litigation to allow the new leadership to evaluate the litigation,” CFPB attorney Justin Michael Sandberg said today at the 5th U.S. Circuit Court with regard to a separate case involving the U.S. Chamber of Commerce.

TBA, ABA respond

The TBA and ABA issued statements in support of Trump’s leadership change.

“The news that Treasury Secretary Scott Bessent will oversee CFPB ushers in a new day to end the politicization of bank regulation and enable community banks and banks of all sizes to better support the small businesses and enterprises that fuel local economies in Texas and across the U.S.,” TBA President and Chief Executive Chris Furlow said.

“While we have always supported the CFPB’s consumer protection mission, we have disagreed with many actions the Bureau has taken in recent years that have exceeded its statutory authority, harmed our economy and imposed significant costs on American consumers,”  ABA President and CEO Rob Nichols said. “We urge Secretary Bessent to begin reversing the damage caused by these misguided regulatory actions and stand ready to support his efforts to chart a better course for the Bureau.”