Before he was predictably fired by President Trump, Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra published a template for state-level regulators to continue the core mission of the agency after he’s gone and Republicans work to dismantle the consumer watchdog.
After firing Chopra, Trump appointed Secretary Treasury Scott Bessent to assume double duty as acting CFPB director, and he wasted no time freezing the agency’s activities. Bessent issued a memo on Monday ordering CFPB staffers to stop pursuing enforcement actions, rule-making processes, continuing active litigation or implementing approved final rules that have not yet . Behind the scenes, Republican legislators are working to cut the bureau’s primary funding sources from the Federal Reserve.
But in what could be seen as a “parting shot” ahead of his dismissal, one of the final acts of Chopra’s CFPB was the publication of a report that is designed to offer a blueprint for bolstered state-level enforcement of consumer protections, a process begun in certain states during the first Trump administration.
The report, published in mid-January just ahead of President Trump’s inauguration, aims to illustrate the leading role states have taken in consumer protection matters in the past, and calls for those efforts to be redoubled in light of changing economic conditions.
“Enforcing consumer protection law has long been a state-federal partnership in which the states have often taken the lead,” the report said. “Over the last century, in response to evolving markets, states have refreshed the core standards of fair dealing that form the bedrock of consumer protection law. States should once again refresh their [unfair or deceptive acts and practices (UDAP)] statutes to address the challenges of the modern economy.”
One of the attributes the report targets is “increased corporate concentration” that gives rise to “new forms of abuse,” as large companies employ robust legal teams to employ “more advanced tricks, using fine print and product complexity to increase profits at the expense of American families,” the report said.
New and novel technologies have also “supercharged the ability to scam and defraud,” while companies use forced arbitration to “select their own private judge, prevent injunctive relief, impose secrecy, and make it virtually impossible for consumers to defend themselves against law-breaking companies.”
The report makes six core recommendations. The first is to amend existing state laws to ban “abusive” practices, particularly those which “obscure product features or use power imbalances to gain advantage and increase costs,” the report said. The second is to ensure that state attorneys general are empowered with sufficient investigative authority to pursue consumer remedies.
The report also calls on states to “remove evidentiary hurdles, such as the requirement that plaintiffs prove individual monetary harm, that frustrate private rights of action,” and to ensure that consumer protection laws “also protect businesses.”
Finally, the report says that states should authorize forms of private enforcement “that can remain viable in the face of forced arbitration,” and to ban “common schemes in the modern economy, including junk fees and abuse of personal data.”
The report also outlined what the bureau characterizes as easing the states’ abilities to enforce federal consumer protection laws. The Consumer Financial Protection Act (CFPA), it says, intended to use “federal law to establish ‘minimum standards’ for consumer protection and not to ‘preclude the States from enacting more protective standards.’ Congress believed that state regulatory or law enforcement activity sends an ‘important signal’ that Congress and federal regulators may also need to act.”
But economic evolution requires additional attention to more novel technology issues, calling attention to an increasingly small number of corporations that exert a large degree of influence over the day-to-day lives of American consumers.
The report even cites the words of 19th century political philosopher Alexis de Tocqueville, who in 1835 warned that the “industrial aristocracy” was “the direction in which the friends of democracy should constantly fix their anxious gaze; for if ever aristocracy and the permanent inequality of social conditions were to infiltrate the world once again, it is predictable that this is the door by which they would enter.”
The fewer number firms competing in the marketplace, the report argues, “the easier it is for those firms to gain leverage over consumers and coerce them into accepting low-quality services or paying high prices, or committing other unfair, deceptive, or abusive practices,” it said. “The supposed efficiencies of greater size routinely fail to result in lower prices or better-quality services for consumers, and instead often lead to higher profits.”
The bureau cites a 2024 report it issued on the practices of credit card companies as an example, where it found smaller credit card issuers generally feature more favorable terms for consumers than the largest players in the industry.
Use and abuse of consumer data and the “proliferation of junk fees” were also cited by the report as two concerning economic trends requiring action from consumer protection laws. Particularly as companies “use fine print to evade or undermine state law,” state-level enforcement becomes more important, the report said.
“For these reasons, the time to strengthen state-level consumer protection has come,” the report added. “Since its founding, the CFPB has promoted state-level consumer protection. Now, just as the Federal Trade Commission (FTC) did before in the 1970s, the CFPB supports states in strengthening their own state-level consumer protection laws.”
The report then goes into more granular detail about its six core recommendations.
