
Evan Vucci/AP Photo
Treasury Secretary Scott Bessent listens as President Donald Trump speaks in the Oval Office of the White House, February 3, 2025, in Washington, as Trump signs executive orders.
On Saturday, Consumer Financial Protection Bureau director Rohit Chopra, who for two weeks had been hanging on as head of the agency despite clear Supreme Court guidance that directors served at the pleasure of the president, was fired. By Monday, President Trump had named a replacement: Scott Bessent, the current Treasury Secretary. Bessent immediately froze all rulemaking, litigation, guidance, enforcement actions, and even public communications upon taking the role, in order to “promote consistency with the goals of the Administration.” Other than activities that have to move forward by law, the agency is pretty much shut down, pending a review with no defined timeline.
In the grand scheme of unlawful actions taken over the past few days, this development trends a little closer to whatever you might call normal these days. During his first term, Trump replaced the CFPB director with someone already confirmed for another position (in that instance, Office of Management and Budget director Mick Mulvaney). He was bolstered by a 2020 Supreme Court ruling allowing presidents to fire the director; Joe Biden actually fired Trump’s director faster than Trump did. And a short pause pending a review isn’t completely unprecedented; Mulvaney did it when he came in.
But the fact that it’s Bessent taking over is one red flag, given that he’s the same guy who gave Elon Musk access to the Treasury’s payment system over the weekend. The fact that Musk has expressed his eagerness to “Delete CFPB” is another red flag. Because for all intents and purposes, CFPB is deleted at the moment, despite being an agency established by Congress to protect consumers and enforce a number of financial laws going back decades.
Musk, of course, wants to turn his social media platform X into an everything app like WeChat in China, and that very much includes financial operations. Just last week, X made a deal with Visa to become a partner in its Money Account, a Venmo-like tool for peer-to-peer payments. He most certainly does not want an active consumer agency snooping around while he sets this up.
Bessent closing active litigation and enforcement stalls out CFPB’s efforts to police fraud on peer-to-peer payment apps in particular. The agency had just sued the nation’s biggest banks in December over failing to counter fraud on their payment app, Zelle. The same month, CFPB sued Walmart for opening bank accounts for their own delivery drivers with exorbitant junk fees that cost the drivers at least $10 million. Four days before Trump’s inauguration, CFPB fined Cash App $175 million, including $120 million that goes directly to harmed customers, over responding to fraud allegations with “intentionally shoddy” investigations and customer service.
These are just a few of the many actions CFPB had to put on hold on Monday. Attorneys for the agency had to plead courts for continuances while the review continues, with no timeline set for its conclusion. Even some of the rules that were finalized and awaiting their effective date were suspended, including the ban on using medical debt in credit reports and the $5 cap on overdraft fees. Both of those are potentially vulnerable to legislative rollbacks via the Congressional Review Act.
In the midst of this, Hal Scott, a retired and rather cranky Harvard professor, has hit the Wall Street Journal editorial page to demand that Trump shut down the CFPB permanently by executive order. Adam Levitin makes quick work of this argument, which tendentiously asserts that because CFPB is funded through “earnings” of the Federal Reserve System, it cannot be funded at all in years when the Fed operates at a loss. It is ridiculous to think Congress intended for the CFPB to be open for business only in certain years. But surely someone will show this hash of an argument to Musk, who has every motivation to kill CFPB and will welcome any argument that offers a pretense for it.
So even a “normal” transfer of power, in the hands of this president and his billionaire minion, could be far more debilitating to millions of Americans now exposed to cheating and abuse from big corporations. Bessent has shown himself more than willing to follow whatever order crosses his desk. He gets no benefit of the doubt in how he will handle the only agency in the federal government with a singular consumer protection mission.