Despite ongoing efforts related to the potential disassembly of the Consumer Financial Protection Bureau (CFPB), current acting director Russell Vought is reportedly seeking to review all prior agency guidance and remove anything that wasn’t created under a formal regulatory review process.
This is according to a memo Vought issued on Friday, which was reviewed by American Banker and Fox Business. Critics of the powerful consumer bureau have long cast it as an entity that operates beyond the scope of its congressionally approved authority — including critiques that it imposes regulation by enforcement.
Vought’s memo seeks to end such practices at the bureau, according to the text of the memo as published by Fox Business.
“For too long this agency has engaged in weaponized practices that treat legal restrictions on its authorities as barriers to be overcome rather than laws that we are oath-bound to respect,” Vought wrote, according to the outlet.
Such “weaponization” happens with the agency’s “use of sub-regulatory ‘guidance,’” he added, calling it “unlawful and [which] deprives the public of fair notice of what conduct is prohibited.”
Going forward, the bureau will “no longer engage in this practice,” he said. Effective immediately, “bureau components may not issue guidance documents that purport to create rights or obligations binding on persons or entities outside the bureau.”
Doing so in a prospective manner was not enough, Vought contended, saying it is necessary to “rescind all ‘guidance’ that has unlawfully regulated private parties in the past. To that end, the Bureau is conducting a comprehensive internal review of guidance documents to ensure that the Bureau is not imposing rights or obligations through guidance.”
Any additional guidance the CFPB puts forward will have to clearly explain that it is nonbinding, Vought added in a subsequent memo. It must refrain from using declarative language unless it is rooted in a preexisting statute or implemented regulation.
Any obligations that future guidance details will not result in enforcement actions, Vought said, according to Fox Business.
He added that the “overwhelming majority of the Bureau’s existing guidance appears to not clear this bar,” and that a 14-day review of prior guidance will be conducted. The report added that the memo “listed more than 100 policy statements, interpretive rules, advisory opinions and other guidance that will be subject to the review and could be rescinded by the agency.”
This is the latest salvo in the Trump administration’s ongoing efforts to dismantle or diminish the CFPB. While attempting to dismiss agency employees en masse and shut down the bureau’s offices, courts have intervened to either slow or walk back some of these actions.
Shortly after the legal roadblocks began to mount, Vought stated that it was not the Trump administration’s intent to completely shutter the CFPB but rather to “streamline” its operations. The administration has routinely pointed to the fact that it has nominated Jonathan McKernan for the role of full-time bureau director.
McKernan sat for a contentious Senate confirmation hearing in late February before his nomination was forwarded to the full Senate along party lines. A confirmation vote has yet to take place, but Senate Banking Committee Chairman Tim Scott (R-S.C.) recently said that could happen as soon as early May.
