Since its creation in 2010, the Consumer Financial Protection Bureau has taken on credit card companies, banks, debt collectors, and other financial firms on behalf of consumers.
Most recently, it ordered investment bank Goldman Sachs and Apple to pay combined penalties of $89 million after its investigation showed the companies’ conduct left hundreds of thousands of Apple Card customers with incorrect credit reports and unresolved charge disputes.
But, in a new Trump administration, the role of the CFPB is likely to be diminished, just as it was in the first Trump administration.
The Federal Trade Commission, another independent agency that has taken on business interests in the name of consumer protection, is also likely to undergo a makeover under Trump.
Here are some things to know about how a Trump administration is likely to affect consumers:
Rohit Chopra, the young, activist CFPB director appointed by President Biden, is all but certain to be replaced. Chopra was narrowly confirmed by the Senate in 2021, with Vice President Kamala Harris providing the tie-breaking vote on a procedural vote.
The CFPB has proposed or finalized a series of consumer-friendly rules that are now in jeopardy. The rules have been challenged in court and the CFPB, under new leadership, could allow them to be wiped away by withdrawing its legal defense of them.
Under rules promulgated by the CFPB, credit card companies would be required to cut late fees from $35 to $8 and reduce overdraft fees for bounced checks from $35 to no more than $14. The CFPB also proposed rules to remove medical debt from credit reports and require lenders to give homeowners behind on their mortgages more time and options to stave off foreclosure.
Trump installed Mick Mulvaney, his director of the Office of Management and Budget, as acting director of the CFPB. Mulvaney cut back on the bureau’s enforcement activity, slashed the budget, and lamented that the law creating the CFPB prevented him from shutting down the agency.
The amount of money the agency won for consumers under Trump was markedly less than either the Obama or Biden administrations, with less than $2 billion returned to consumers in the last three years of the Trump administration, compared to more than $6 billion in the first three years of the Biden administration (no statistics are available for 2024).
Elizabeth Warren is widely credited with coming up with the idea for the CFPB in the aftermath of the financial crisis of 2008, and with working with former president Barack Obama to set up the agency. She then returned to Massachusetts and won her Senate seat in 2012. (She was reelected to a third term on Tuesday.)
The CFPB has survived several legal challenges, mostly recently in May, when the Supreme Court rejected, 7 to 2, a challenge to the unusual way the agency is funded. Going forward, Congress could vote to repeal the law that created the CFPB in 2010, and if it did, it’s likely Trump would sign it into law.
Consumer advocates are wary. “The CFPB was significantly weakened under the first Trump administration, and I hope that doesn’t happen again,’’ said Lauren Saunders, associate director at the Boston-based National Consumer Law Center.
The FTC is chaired by another young, dynamic leader — Lina Khan, 35. (The CFPB’s Chopra is 42.) Khan has brought antitrust suits against tech giants Meta, Amazon, and Microsoft, saying healthier market competition would benefit consumers. The FTC under Khan also brought suit against an online data collection broker to protect consumers’ privacy.
The FTC is a century-old agency that shares jurisdiction over federal civil antitrust law enforcement with the Department of Justice. The FTC is also authorized to challenge “unfair methods of competition’’ in the marketplace.
Khan’s three-year term expired in September. Under the law, she’s allowed to continue as chair unless she is replaced. Days before the election, Elon Musk, the owner of X and a strong Trump supporter, wrote on his platform that Khan “will be fired soon.’’ Last week, a powerful, Republican-controlled House Committee released a report accusing Khan of abusing her authority to promote “a left-wing agenda.’’
Many of the actions of the CFPB and FTC — and of other federal agencies — are routinely challenged by business interests in litigation before federal judges. More than 200 of Trump’s nominees to the bench were confirmed by the Senate in his first administration, including three sitting Supreme Court justices. Trump’s mark on the federal judiciary, where judges are appointed for life, will certainly grow in a second term and continue long into the future.