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Capstone believes the Trump administration is intent on taking apart the Consumer Financial Protection Bureau (CFPB), even as the agencyconstrained by minimal spending plans and staffingmoves forward with a broad deregulatory rulemaking agenda favorable to industry. As federal enforcement and guidance decline, we anticipate well-resourced, Democratic-led states to action in, producing a fragmented and uneven regulative landscape.

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While the supreme result of the lawsuits remains unidentified, it is clear that consumer financing business throughout the ecosystem will take advantage of reduced federal enforcement and supervisory dangers as the administration starves the company of resources and appears dedicated to reducing the bureau to an agency on paper just. Since Russell Vought was called acting director of the agency, the bureau has faced lawsuits challenging various administrative choices meant to shutter it.

Vought also cancelled many mission-critical agreements, provided stop-work orders, and closed CFPB offices, 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 US District Court for the District of Columbia provided a preliminary injunction pausing the decreases in force (RIFs) and other actions, holding that the CFPB was attempting to render itself functionally inoperable.

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DOJ and CFPB attorneys acknowledged that eliminating the bureau would need an act of Congress and that the CFPB remained responsible for performing its statutorily needed functions under the Dodd-Frank Wall Street Reform and Customer Protection Act. On August 15, 2025, the DC Circuit issued a 2-1 choice in favor of the CFPB, partly leaving Judge Berman Jackson's initial injunction that blocked the bureau from executing mass RIFs, but remaining the decision pending appeal.

En banc hearings are hardly ever given, but we anticipate NTEU's request to be approved in this circumstances, provided the in-depth district court record, Judge Cornelia Pillard's lengthy dissent on appeal, and more current actions that signal the Trump administration means to functionally close the CFPB. In addition to prosecuting the RIFs and other administrative actions targeted at closing the agency, the Trump administration aims to build off spending plan cuts incorporated into the reconciliation bill passed in July to even more starve the CFPB of resources.

Dodd-Frank insulates the CFPB from direct appropriations by Congress, instead licensing it to request funding directly from the Federal Reserve, with the quantity capped at a percentage of the Fed's operating expenditures, based on a yearly inflation modification. The bureau's ability to bypass Congress has routinely stirred criticism from congressional Republicans, and, in the spirit of that ire, the reconciliation bundle passed in July minimized the CFPB's funding from 12% of the Fed's operating expenditures to 6.5%.

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In CFPB v. Community Financial Solutions Association of America, offenders argued the funding technique broke the Appropriations Stipulation of the Constitution. While the Fifth Circuit agreed, the United States Supreme Court did not. In a 7-2 decision in May 2024, Justice Clarence Thomas' bulk viewpoint held the CFPB's financing approach constitutional. The Trump administration makes the technical legal argument that the CFPB can not legally request financing from the Federal Reserve unless the Fed pays.

The CFPB stated it would run out of cash in early 2026 and could not lawfully demand financing from the Fed, citing a memorandum opinion from the DOJ's Workplace of Legal Counsel (OLC). As a result, because the Fed has been running at a loss, it does not have "combined revenues" from which the CFPB might legally draw funds.

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Accordingly, in early December, the CFPB acted on its filing by sending out letters to Trump and Congress stating that the company needed approximately $280 million to continue performing its statutorily mandated functions. In our view, the new but recurring funding argument will likely be folded into the NTEU lawsuits.

Most customer financing business; home loan lenders and servicers; car loan providers and servicers; fintechs; smaller sized consumer reporting, financial obligation collection, remittance, and car finance companiesN/A We anticipate the CFPB to press strongly to implement an ambitious deregulatory program in 2026, in tension with the Trump administration's effort to starve the company of resources.

In September 2025, the CFPB published its Spring 2025 Regulatory Program, with 24 rulemakings. The program follows the firm's rescission of almost 70 interpretive rules, policy declarations, circulars, and advisory viewpoints dating back to the firm's inception. The bureau released its 2025 guidance and enforcement concerns memorandum, which highlighted a shift in supervision back to depository institutions and home mortgage lending institutions, an increased focus on areas such as scams, support for veterans and service members, and a narrower enforcement posture.

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We view the proposed guideline modifications as broadly beneficial to both consumer and small-business lending institutions, as they narrow prospective liability and exposure to fair-lending scrutiny. Specifically relative to the Rohit Chopra-led CFPB during the Biden administration, we expect fair-lending supervision and enforcement to practically vanish in 2026. A proposed rule to narrow Equal Credit Chance Act (ECOA) policies aims to eliminate disparate effect claims and to narrow the scope of the discouragement provision that prohibits lenders from making oral or written declarations planned to prevent a consumer from applying for credit.

The new proposal, which reporting suggests will be finalized on an interim basis no later than early 2026, drastically narrows the Biden-era guideline to leave out specific small-dollar loans from protection, lowers the threshold for what is thought about a small company, and removes numerous data fields. The CFPB appears set to issue an updated open banking rule in early 2026, with considerable ramifications for banks and other standard financial organizations, fintechs, and data aggregators throughout the customer financing environment.

The guideline was finalized in March 2024 and included tiered compliance dates based upon the size of the financial organization, with the biggest required to begin compliance in April 2026. The final guideline was instantly challenged in May 2024 by bank trade associations, which argued that the CFPB surpassed its statutory authority in releasing the rule, specifically targeting the restriction on costs as illegal.

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The court issued a stay as CFPB reassessed the rule. In our view, the Vought-led bureau might think about permitting a "reasonable cost" or a similar standard to make it possible for information service providers (e.g., banks) to recover costs connected with offering the information while likewise narrowing the threat that fintechs and data aggregators are evaluated of the market.

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We anticipate the CFPB to drastically reduce its supervisory reach in 2026 by finalizing four larger individual (LP) guidelines that develop CFPB supervisory jurisdiction over non-bank covered persons in different end markets. The changes will benefit smaller operators in the customer reporting, auto financing, consumer debt collection, and global cash transfers markets.