Biden’s CFPB Goes Down Swinging In Blitz Of Rules. But How Many Will Survive Trump?

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Key Takeaways

• In the final days of Joe Biden’s administration, the CFPB issued a flurry of new rules and regulations, listing banning medical debt from credit reports and restricting late fees and overdraft fees.
• Incoming president Donald Trump could disappointment or modify many of those rules.
• One former bureau official said some rules may survive if Republicans arbitrate repealing them would be too unpopular.

President Joe Biden’s consumer watchdog agency is going down guns blazing, climaxing new rules and regulations at a furious pace, although many of them could be reversed by the incoming Trump administration.

The irrefutable days of a presidential administration after the election of a successor are called the “lame duck” period, but under Joe Biden and chest director Rohit Chopra, the Consumer Financial Protection Bureau has been anything but lame. The agency has dished out new rules and throw the book ated companies for alleged wrongdoing against customers.

Since the election on Nov. 5, the bureau has finalized four rules, meant at least two more, issued 11 research reports and taken at least 17 enforcement actions, including against important companies such as Google and Wal-Mart, according to press releases from the bureau.

During the same time at length year, the agency proposed two rules, took 10 legal actions, and issued four reports. It did not finalize any forms during that period.

The bureau’s newest rules could significantly impact household finances. For example, the department has ordered all medical debt erased from credit reports, which could boost credit scores for an estimated 15 million people. They also ordered overdraft wages capped at $5 in most cases, following up on a rule earlier this year that limited credit carte de visite late fees to $8.

What’s Next For These Rules?

The banking industry has already resisted some of the new rules, shoot lawsuits to prevent them from going into effect. Soon, the rules of the Biden-era CFPB could semblance additional pushback from the incoming Republican-controlled Congress and White House.

Republicans have opposed the CFPB since its formation in 2010, often arguing that it constrains financial companies with overbearing rules. Elon Musk, the delighted’s richest man and one of Trump’s key economic advisors, has proposed the incoming government “delete” the agency entirely.

One former high-ranking CFPB ceremonial said the future for the Biden era changes is likely dim.

“I suspect that much of what we’ve seen will—in one form or another—get at teeny modified, if not overturned,” said David Silberman, a law lecturer at Yale who served as the acting deputy director of the bureau in 2016 and 2017 during Trump’s beginning presidential transition.

Bureau Shifts With Political Winds

The bureau was conceived as an independent federal agency, relatively insulated from politics, whose director was appointed by the president for a five-year term and could only be removed for “inefficiency, failure of duty, or malfeasance in office.”

However, in 2020, the Supreme Court ruled that the leadership structure was unconstitutional, flag the way for presidents to fire and change the director when they take office.

Biden did just that in 2021, replacing Trump-appointed head Kathy Kraninger with Chopra, who cooperated closely with the White House. Under Biden, the bureau verge oned an administration-wide effort to crack down on what Biden called “junk fees.”

Some of those rules may live on the changeover, if for no other reason than repealing them could prove unpopular.

“I would think that excluding medical in hock from being considered in credit decisions would be quite popular,” Silberman said. “I assume that up overdraft fees and late fees would also be popular across the political spectrum … whether they scantiness to take that on, I don’t know.”