During a visit to Asheville, North Carolina on August 14, 2024, former President Donald Trump, who is the Republican presidential nominee, took a moment to listen to investor Scott Bessent’s insights on the economy. This event marked an important shift in the leadership of the Consumer Financial Protection Bureau (CFPB).
Over the weekend, President Trump made news by replacing former CFPB head Rohit Chopra with Scott Bessent, the recently confirmed Treasury Secretary. Bessent, who has a background in hedge fund management, will assume the role of acting director of the CFPB until a permanent successor is chosen. In a statement released by the CFPB, Bessent expressed enthusiasm about collaborating with the bureau to further the administration’s goals of reducing costs for Americans and boosting economic growth.
Chopra, who had been a significant figure in the Biden administration since 2021, often found himself at odds with the banking industry. He attempted to clamp down on various banking practices, including those related to credit card late fees and overdraft charges. These efforts were met with resistance from banking trade groups, who argued against the new regulations, claiming they were either ill-conceived or unwarranted.
Many in the banking sector anticipated Trump’s immediate dismissal of Chopra with his inauguration. However, Chopra remained in his role for nearly two weeks after Trump began his second term. During this time, he continued to release statements and engage in debates, including discussions on whether banks were rightfully closing accounts.
Chopra officially announced his departure on February 1, underscoring in a social media post to Trump the potential for the next leader of the CFPB to implement significant reforms, such as a possible cap on credit card interest rates.
Formed in the wake of the 2008 financial crisis, which was partly triggered by reckless banking practices, the CFPB has since been under scrutiny. Various trade groups have unsuccessfully argued in the courts that the agency’s funding structure breached constitutional protocols. Notable conservative voices, including Trump advisor Elon Musk, have also been vocal advocates for dismantling the CFPB.
With Bessent now at the helm, the Consumer Bankers Association expressed satisfaction with the appointment, urging him to overturn what they viewed as partisan policies enacted under Chopra. CBA President Lindsey Johnson highlighted the hope that Bessent would factor in the real-world impact of regulations on both leading banks and their customers, as well as the broader economic landscape.
