The CFPB will have to take formal actions to address final rules such as the medical debt credit reporting rule.
02/03/2025 4:15 P.M.
Rohit Chopra announced the end of his time as director of the Consumer Financial Protection Bureau in a letter addressed to President Donald Trump posted on X last week. President Trump fired the director over the weekend and on Monday, Feb. 3, Trump designated Secretary of the Treasury Scott Bessent as acting director of the CFPB.
“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,” Bessent said.
An email sent to CFPB staff on Feb. 3 stated:
“Colleagues,
Secretary of the Treasury Bessent has been named Acting Director of the CFPB, effective January 31, 2025. As Acting Director, Secretary Bessent is committed to appropriately stewarding the agency pending new leadership. In order to promote consistency with the goals of the Administration, effective immediately, unless expressly approved by the Acting Director or required by law, all employees, contractors, and other personnel of the Bureau are directed:
- 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.
- Not to make or approve filings or appearances by the Bureau in any litigation, other than to seek a pause in proceedings.
If you have any questions, please raise issues through your existing management for consideration by the Acting Director.”
As the email indicates, it is expected that new leadership at the CFPB will be taking some swift actions to address the CFPB’s midnight rulemaking. However, the CFPB will still have to take formal actions to address final rules such as the medical debt credit reporting rule. ACA is working to advocate for swift action aligning with Monday’s broad pronouncements.
ACA CEO Scott Purcell sent a letter to Secretary Bessent on Monday requesting that the CFPB delay or rescind two recent CFPB administrative actions originating with the prior administration:
- A final rule requiring the suppression of valid medical debts from consumer reports (Prohibition on Creditors and Consumer Reporting Agencies Concerning Medical Information (Regulation V) (12 C.F.R. §§ 1022.3(j); 1022.30; 1022.38)).
- An advisory opinion that implies the existence of new rules for collectors of medical debt and medical providers, despite the fact that the CFPB does not have jurisdiction over the health care industry (Oct. 1, 2024; 89 Fed. Reg. 80715–24).
ACA argued that, taken together, the CFPB’s two actions will increase prices, restrict access to health care, and damage the American credit system.
ACA also continues to support congressional and legal actions and will continue to provide updates to ACA members on this work.
“Secretary Bessent’s actions today are a critical step forward in rolling back flawed midnight regulations from the CFPB that harm consumers, businesses, medical providers, and the economy at large,” said Leah Dempsey, shareholder at Brownstein Hyatt Farber Schreck LLP. “However, our work is not done, and we will need to continue to educate new CFPB leadership and other policymakers about the need to take further actions directly addressing ACA’s concerns.”
Key Regulatory Impacts
According to Bloomberg Law, the bureau-wide pause specifically affects several major rules and operations:
- Suspension of the March 17 effective date for the medical debt credit reporting ban.
- Delay of the new $5 cap on overdraft fees.
- Freeze on all proposed and final rules.
- Halt on issuing any formal or informal guidance.
- Pause on all ongoing litigation.
The operational pause allows only activities that are either explicitly authorized by Bessent or required by law to move forward. It’s important to note that while this is encouraging for the accounts receivable management industry, this is not actually effective until official action is taken by the CFPB and it is recorded in the Federal Register.
ACA International Response
ACA International will be sending Bessent a formal letter requesting the suspension or postponement of the medical debt rule. This action aligns with the bureau’s current operational pause and provides an opportunity to review recent regulatory decisions.
ACA, along with several other financial services industry trade associations, today sent a letter (PDF) to Bessent asking for the proposed data broker rule, as ACA previously reported on, to also be withdrawn.
Administration Changes
Jeff Wrase, special assistant to the president for economic policy focusing on financial regulation and banking, will play a key role during the bureau’s leadership transition. Wrase brings significant experience, having previously served as chief economist on multiple congressional committees, including the Joint Economic Committee, the House and Senate Budget Committees, and the Senate Committee on Banking, Housing and Urban Affairs.
Leadership Transition
It is not uncommon to transfer regulatory leadership at the same time political party changes occur in Washington, D.C., but the process to replace Chopra this year included some delays influenced by “political dynamics” and federal laws, according to a report from American Banker.
The Trump administration had strategically timed the CFPB director appointment to align with Bessent’s confirmation as treasury secretary.
Bessent was confirmed by the Senate on Jan. 27, Roll Call reports.
House Financial Services Committee Chairman French Hill applauded the selection.
“Former Director Chopra’s repeated regulatory overreach wreaked havoc on our financial system to the detriment of the consumers his agency was created to protect,” he said in a statement.
Hill emphasized that Chopra’s removal is “a critical step in restoring Americans’ faith in our financial regulators.”
What’s Next?
The situation remains fluid, and additional guidance from Bessent is expected in the coming days regarding the status of specific rules and operations.
ACA remains engaged with CFPB leadership to advocate for members’ interests.
Source : ACA International