Insights / articlesInsights
Insights / articles

Alert

CFPB Upheaval Continues: An Update

Read Time: 2 mins

As we highlighted on Monday, the Consumer Financial Protection Bureau (CFPB) is currently facing an existential crisis as the Trump Administration and DOGE work to dismantle large parts of the consumer watchdog. Here’s what has happened in the past forty-eight hours.

A Permanent Director has been Nominated

After firing former Director Rohit Chopra, the Trump administration first appointed Treasury Secretary Scott Bessent as acting director of the CFPB. That appointment was short lived as a few days later, Office of Management and Budget director Russell Vought assumed the acting director title. Now, the Trump Administration has nominated a permanent director, Jonathan McKernan, a former board member at the FDIC. McKernan, whose private and governmental career has focused on banking and financial services, will most likely be a popular pick with industries subject to the Bureau’s enforcement, supervisory, and regulatory oversight. He will also almost assuredly be approved by Congress, as even President Trump’s most controversial agency picks have been confirmed to date.

Agency Employees Terminated – Lawsuits Ensue

Acting Director Vought has also been busy terminating CFPB employees, including a number of employees in its enforcement division. The National Treasury Employees Union (NTEU), of which CFPB employees are members, has decried the terminations as unlawful and has filed a new lawsuit seeking injunctive relief, which follows in the footsteps of an earlier suit filed by the NTEU on behalf of CFPB employees.  Despite this, the Bureau has also begun to expand its terminations beyond probationary employees, laying off dozens of term employees on Thursday. 

Cancelled Contracts: A Prelude to an End to Enforcement?

Nearly $100 million in vendor contracts have also been canceled by the CFPB, including expert witness contracts in ongoing enforcement actions. And while many lawsuits do not necessitate an expert witness, those that do could make it incredibly hard for the Bureau to support its theory in a given case without an expert. More importantly, these targeted cuts, which disproportionality impacted the Bureau’s enforcement division, coupled with directives to stop work in current enforcement actions, evidences an intent to significantly scale back, if not cease altogether, enforcement activities for the time being.

The changes at the Bureau are coming fast and furious, so stay tuned for more updates from McGlinchey.

Subscribe for Updates

Subscribe to receive emails from us regarding timely legal developments and events in your areas of interest.

sign up + subscribe >

Insights

Alert

Trump on Education: DOE Targets DEI, Threatens Federal Funding

February 19, 2025

On February 14, 2024, the Office for Civil Rights (OCR) within the Department of Education (DOE) issued a “Dear Colleague” letter threatening the federal funding of any academic institution that considers race in any manner of operation.

Alert

FTC’s CARS Rule Vacated — What Finance Companies Need to Know

February 14, 2025

In a procedural decision, the U.S. Court of Appeals for the Fifth Circuit vacated the CARS Rule (officially, the Combatting Auto Retail Scams Trade Regulation Rule, sometimes known as the Vehicle Shopping Rule) which was designed by the Federal Trade Commission (FTC) to prevent deceptive practices by auto dealers, particularly in the sale of voluntary protection products (sometimes known as “add-ons” or “ancillary products”).

Alert

Trump on Education: Transgender Women in Sports

February 7, 2025

The order, titled Keeping Men Out of Women’s Sports, noted that it would be the policy of the United States to “rescind all funds from educational programs that deprived women and girls of fair athletic opportunities” and “oppose male competitive participation in women’s sports.” In effect, the order bans transgender women from competing in women’s sports at federally funded institutions.

Alert

SCOTUS Hears Arguments on Judicial Interpretation of Agency Authority Under the TCPA

January 28, 2025

On January 21, 2025, the Supreme Court heard oral arguments in McLaughlin Chiropractic Associates, Inc. v. McKesson Corporation, et al., a case and decision that may have an outsized impact on the nature of judicial review of federal agency legal interpretations. At issue before the Court was whether the Hobbs Act requires district courts to follow the Federal Communications Commission’s (FCC) interpretation that the Telephone Consumer Protection Act (TCPA) does not prohibit unsolicited advertisements via fax.

Alert

“Junk Fee” Revolution Continues: FTC Prohibits “Junk Fees” in Live-Event Ticketing and Short-Term Lodging Industries

December 18, 2024

The Federal Trade Commission (FTC) finalized its “Rule on Unfair or Deceptive Fees” (Junk Fees Rule) designed, the FTC noted, to prohibit bait-and-switch pricing and mandate clear and conspicuous price disclosures in the live-event ticketing and short-term lodging industries. While similar in nature to some of the junk fee rules finalized by the Consumer Financial Protection Bureau (CFPB), the FTC’s Final Rule targets industries outside of the CFPB’s authority and highlights the Biden Administration’s continued focus on all-things junk fees, even in the waning moments of the Biden presidency.