CFPB Rescinds Nearly 70 Pieces of Guidance

The Consumer Financial Protection Bureau (CFPB) recently withdrew 67 pieces of prior guidance, including those regarding overdraft fees, BNPL, fair lending, earned wage access programs, and more. Acting CFPB Director Russell Vought claimed that many of the documents imposed “compliance burdens” and are inconsistent with statutory text.

“Even where the guidance might advance a permissible interpretation of the relevant statute or regulation, or afforded the public an opportunity to weigh in, it is the Bureau’s current policy to avoid issuing guidance except where necessary and where compliance burdens would be reduced rather than increased,” Vought said in the filing.

Vought noted that some of the guidance might be reissued in the future, but anything that goes beyond the regulation or statute it refers to is “unlawful,” and undermines “any reliance interest in retaining that guidance.” Under Vought, the CFPB has changed its enforcement policy to focus on possible violations of the Military Lending Act and other protections for service members.

Three of the rescinded guidance documents were issued by former CFPB Director Kathy Kraninger under President Trump’s first administration, but the majority of rescinded guidance was issued under former Biden administration Director Rohit Chopra. Banks largely criticized the CFPB’s use of guidance documents when Chopra was Director and applauded Vought’s move toward rescission.

“While banks welcome guidance that helps them understand and comply with the law, too often in the past the CFPB has characterized something as guidance that is actually a rule Congress requires to go through the notice-and-comment process,” said Rob Nichols, President and CEO of the American Bankers Association.

Alternatively, Brady Williams, legal counsel for consumer advocate Better Markets, said that the Bureau’s efforts to withdraw guidance was “an alarming move that threatens the integrity of consumer oversight, erodes transparency, and signals a dangerous capitulation to industry influence,” according to Banking Dive.