CFPB Withdraws Defense of Biden-Era Rules in Court Amid Leadership Change
In emergency notices filed with the 5th U.S. Circuit Court of Appeals in New Orleans, lawyers for the Consumer Financial Protection Bureau (CFPB) announced that they "have been instructed not to make any appearances in litigation except to seek a pause in proceedings."
This withdrawal comes as the agency faces two pending appeals. One concerns a CFPB appeal from a Texas federal judge's ruling that the agency unlawfully expanded its authority by examining banks for possible discrimination. The other case involves banking industry groups appealing a judge's ruling allowing the CFPB to enforce a rule requiring lenders to gather demographic data on small business borrowers.
At a scheduled hearing of the discrimination case, a CFPB lawyer requested a pause "to allow the new leadership to evaluate litigation." The court directed both parties to confer on the necessity of oral arguments.
The agency's move follows the departure of former CFPB director Rohit Chopra, who announced his resignation on Saturday despite his term extending until 2026. Chopra's forceful approach to consumer protection enforcement drew opposition from Wall Street.
The Trump administration is anticipated to curtail the CFPB's activities and potentially rescind recent regulations. U.S. Treasury Secretary Scott Bessent has been appointed as acting CFPB director.