Treasury Secretary Scott Bessent has been named Acting Director of the Consumer Financial Protection Bureau (CFPB), following the departure of the previous Director, Rohit Chopra, who has led the agency since October of 2021 under the Biden administration.
What could this mean for those in the financial services industry? As you may know, the CFPB under the first Trump administration brought many enforcement actions. Given the likelihood of political control over the CFPB’s enforcement, we should continue to recognize that higher education is a highly charged political issue and that consumer protection could be an avenue of attack should the Trump administration choose to use it.
The financial services industry should be prepared for a possible shift in priorities and actions from the CFPB under Bessent’s leadership. While he is only acting in the role until a permanent director is confirmed, this could still result in short-term changes to how the CFPB approaches consumer protection.
Additionally, the January 2025 publication of the CFPB’s Roadmap for the States could keep our membership and the higher education community on edge, especially since the document encourages states to take a more aggressive approach to consumer protection. If states follow these recommendations, companies may face a patchwork of stricter regulations at the state level, adding complexity to compliance efforts.
The higher education community must stay informed about federal and state regulatory shifts.
And What about the Department of Ed?
It has also recently been reported that the Trump administration is monitoring the Education Department and considering ways to potentially dismantle it and transfer some of its functions to other agencies.
The Trump administration is preparing an executive order with plans to reduce or restructure the U.S. Department of Education significantly. While the order is still being finalized, reports suggest it would not entirely abolish the department but could involve eliminating or shifting some of its functions, potentially to other government agencies. Media outlets have highlighted that the order may align with Trump’s campaign promise to defund or shrink the Department of Education, and the Education Secretary could be tasked with figuring out how to break up or reduce the agency’s scope. This could mean significant changes to the department’s responsibilities and operations, but it remains to be seen exactly what form the order will take.
Only Congress has the constitutional power to eliminate or restructure federal agencies, so an executive order alone wouldn’t have the authority to dismantle the Department of Education altogether. However, the Trump administration could still use the order to reduce the agency’s influence and scale back its operations. By cutting staff, halting specific programs, or reallocating responsibilities, they could effectively weaken the agency’s role without entirely abolishing it. This would send a symbolic message about reducing the scope of federal involvement in education while complying with legal limitations. It would be a way to fulfill some of the president’s campaign promises without going through Congress.
COHEAO will continue to monitor developments in the CFPB and the Department of Education and will share them with you as they arise.
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