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Capstone thinks the Trump administration is intent on dismantling the Consumer Financial Protection Bureau (CFPB), even as the agencyconstrained by restricted budgets and staffingmoves forward with a broad deregulatory rulemaking agenda favorable to market. As federal enforcement and guidance decline, we anticipate well-resourced, Democratic-led states to step in, developing a fragmented and uneven regulatory landscape.

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While the supreme outcome of the litigation stays unidentified, it is clear that customer financing business across the community will benefit from minimized federal enforcement and supervisory dangers as the administration starves the agency of resources and appears dedicated to minimizing the bureau to a company on paper only. Because Russell Vought was named acting director of the agency, the bureau has dealt with litigation challenging various administrative decisions meant to shutter it.

Vought also cancelled many mission-critical agreements, released stop-work orders, and closed CFPB workplaces, to name a few actions. The CFPB chapter of the National Treasury Worker Union (NTEU) immediately challenged the actions. After evidentiary hearings, Judge Amy Berman Jackson of the United States District Court for the District of Columbia issued a preliminary injunction pausing the reductions in force (RIFs) and other actions, holding that the CFPB was trying to render itself functionally inoperable.

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DOJ and CFPB lawyers acknowledged that removing the bureau would require an act of Congress and that the CFPB stayed responsible for performing its statutorily required functions under the Dodd-Frank Wall Street Reform and Customer Defense Act. On August 15, 2025, the DC Circuit released a 2-1 decision in favor of the CFPB, partly abandoning Judge Berman Jackson's initial injunction that obstructed the bureau from implementing mass RIFs, but staying the decision pending appeal.

En banc hearings are rarely given, but we expect NTEU's demand to be authorized in this circumstances, provided the comprehensive district court record, Judge Cornelia Pillard's lengthy dissent on appeal, and more recent actions that signal the Trump administration plans to functionally close the CFPB. In addition to litigating the RIFs and other administrative actions focused on closing the firm, the Trump administration aims to construct off budget cuts incorporated into the reconciliation expense passed in July to even more starve the CFPB of resources.

Dodd-Frank insulates the CFPB from direct appropriations by Congress, rather authorizing it to demand financing straight from the Federal Reserve, with the quantity topped at a portion of the Fed's operating expenditures, subject to an annual inflation adjustment. The bureau's capability to bypass Congress has regularly stirred criticism from congressional Republicans, and, in the spirit of that ire, the reconciliation plan passed in July lowered the CFPB's financing from 12% of the Fed's operating costs to 6.5%.

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In CFPB v. Neighborhood Financial Solutions Association of America, defendants argued the financing approach violated the Appropriations Stipulation of the Constitution. The Trump administration makes the technical legal argument that the CFPB can not legally demand financing from the Federal Reserve unless the Fed is rewarding.

The CFPB said it would run out of cash in early 2026 and might not lawfully request financing from the Fed, citing a memorandum opinion from the DOJ's Office of Legal Counsel (OLC). As a result, since the Fed has been running at a loss, it does not have actually "integrated profits" from which the CFPB might lawfully draw funds.

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Appropriately, in early December, the CFPB followed up on its filing by corresponding to Trump and Congress stating that the agency needed around $280 million to continue performing its statutorily mandated functions. In our view, the new however repeating funding argument will likely be folded into the NTEU litigation.

A lot of consumer financing business; mortgage lending institutions and servicers; car lending institutions and servicers; fintechs; smaller sized customer reporting, financial obligation collection, remittance, and car finance companiesN/A We anticipate the CFPB to push aggressively to implement an ambitious deregulatory program in 2026, in stress with the Trump administration's effort to starve the agency of resources.

In September 2025, the CFPB published its Spring 2025 Regulatory Agenda, with 24 rulemakings. The program follows the firm's rescission of nearly 70 interpretive guidelines, policy declarations, circulars, and advisory opinions going back to the agency's creation. The bureau released its 2025 guidance and enforcement top priorities memorandum, which highlighted a shift in supervision back to depository organizations and mortgage loan providers, an increased focus on areas such as scams, support for veterans and service members, and a narrower enforcement posture.

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We see the proposed rule changes as broadly favorable to both consumer and small-business lenders, as they narrow possible liability and direct exposure to fair-lending examination. Especially relative to the Rohit Chopra-led CFPB during the Biden administration, we anticipate fair-lending supervision and enforcement to practically disappear in 2026. A proposed guideline to narrow Equal Credit Opportunity Act (ECOA) policies aims to eliminate diverse effect claims and to narrow the scope of the discouragement provision that prohibits financial institutions from making oral or written statements planned to prevent a customer from applying for credit.

The new proposal, which reporting recommends will be finalized on an interim basis no behind early 2026, dramatically narrows the Biden-era guideline to exclude certain small-dollar loans from coverage, reduces the limit for what is considered a small organization, and gets rid of many information fields. The CFPB appears set to release an upgraded open banking rule in early 2026, with substantial ramifications for banks and other standard banks, fintechs, and information aggregators throughout the customer finance ecosystem.

The rule was finalized in March 2024 and included tiered compliance dates based on the size of the banks, with the biggest required to begin compliance in April 2026. The last guideline was immediately challenged in May 2024 by bank trade associations, which argued that the CFPB surpassed its statutory authority in releasing the guideline, specifically targeting the prohibition on fees as illegal.

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The court provided a stay as CFPB reconsidered the guideline. In our view, the Vought-led bureau may think about permitting a "affordable cost" or a similar requirement to allow data service providers (e.g., banks) to recoup expenses associated with offering the information while likewise narrowing the risk that fintechs and data aggregators are priced out of the market.

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We expect the CFPB to dramatically decrease its supervisory reach in 2026 by finalizing four larger individual (LP) guidelines that establish CFPB supervisory jurisdiction over non-bank covered persons in numerous end markets. The modifications will benefit smaller operators in the consumer reporting, vehicle financing, customer financial obligation collection, and international cash transfers markets.