Executive Order Pauses All Pending Rulemaking Activity for Federal Agencies: Impact on CFPB

President Donald Trump’s executive order titled Regulatory Freeze Pending Review directs federal agencies to stop all rulemaking activity pending within the agency and to consider all rules already published as paused for 60 days. This LawFlash discusses the effect this regulatory freeze may have on the Consumer Financial Protection Bureau.

The executive order (EO) specifically states that agencies are to

1. halt all rulemaking that the agency has not yet transmitted to the Office of the Federal Register until an official appointed by President Trump after his January 20, 2025 inauguration (Trump-appointed official) has reviewed the rule, an authority that can be delegated by the Trump-appointed official;
2. withdraw any rules the agency transmitted to the Office of the Federal Register so they may be reviewed by the Trump-appointed official;
3. consider whether the agency should postpone, for 60 days from the date of the EO, the effective date of any rule issued by the agency for the purpose of reviewing any questions of fact, law, and policy that the rules may raise:
   1. During this 60-day period, where appropriate and consistent with applicable law, agencies are to consider opening a comment period to allow interested parties to provide comments about issues of fact, law, and policy raised by the rules postponed under this memorandum and consider reevaluating pending petitions involving such rules.
   2. As appropriate and consistent with applicable law, and where necessary to continue to review these questions of fact, law, and policy, the agencies are to consider further delaying, or publishing for notice and comment, proposed rules further delaying such rules beyond the 60-day period.
4. for rules that raise no substantial questions of fact, law, or policy, take no further action after the 60-day review period, meaning agencies can finalize those rules. For rules that do raise substantial questions of fact, law, or policy, agencies may not finalize the rules without consultation with the director of the OMB, who will establish a process to oversee administration of this EO; and
5. the EO defines “rules” as both final rules promulgated under the Administrative Procedures Act as well as proposed rules, notices of inquiry, and advanced notices of rulemaking. Further, the EO’s requirements apply to any agency statement of general applicability and future effect that sets forth a policy on a statutory, regulatory, or technical issue or an interpretation of a statutory or regulatory issue. The EO closes by noting that if any actions were taken prior to January 20, 2025 that would “frustrate” the purpose of the EO, the president reserves the right to amend the EO accordingly.

WHAT TO KNOW ABOUT THE EO’S IMPACT ON THE CFPB

The EO does not explicitly state that its coverage is limited to a rule the effective date of which is after January 20, 2025. The more likely reading of the EO is that the rules subject to reevaluation are those with future effective dates. Regardless of the scope of the EO, an agency may initiate a new rulemaking procedure under the Administrative Procedures Act to review an existing rule already in effect. For the Consumer Financial Protection Bureau (CFPB), the agency has a massive rulemaking agenda to evaluate.

Since January 2021, the CFPB issued as many as 60 agency actions ranging from proposed rules, final rules, advisory opinions, interim final rules, and advanced notices of proposed rulemakings. Since August 2024, the CFPB proposed five rules and finalized nine rules. Seven of those rules currently are subject to a litigation challenge, which may also factor into a decision to review a particular rule.

Another factor to consider is whether Congress will move quickly to invalidate any of the rules issued since August under the Congressional Review Act. It is likely that the CFPB leadership will begin compliance with the EO by delaying the effective dates of rules where the effective date is post-January 20, 2025, followed by a close evaluation of all rules proposed and finalized with particular emphasis on the last year. In all, the CFPB has nearly 30 actions during that timeframe to consider.

The following proposed and final rules will likely be prioritized for reevaluation pursuant to the EO:

• Small Business Lending Under the Equal Credit Opportunity Act Rule (Section 1071)
• Overdraft Lending Final Rule
• Final Open Banking Rule and the corresponding Industry Standard Setting Final Rule
• Final Rule Extending Supervisory Authority Over Digital Wallets
• Credit Card Late Fee Penalty Rule (effective date stayed due to pending litigation)
• Prohibition on Medical Debt Information on Consumer Reports Final Rule
• Buy Now, Pay Later Interpretive Rule
• Prohibited Contract Terms Proposed Rule
• Proposed Rule to Subject Data Brokers to the FCRA

It is an open question whether the new leadership will determine that, for the category of agency statements of general applicability, the 16 Consumer Financial Protection Circulars issued since January 2021 meet that definition. If the circulars are considered within the EO’s scope, the CFPB would need to evaluate what process they need to use to reconsider them. In 2021, the then-acting CFPB director rescinded similar policy statements without advance public notice.

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