Trump names Scott Bessent acting director of consumer protection agency

In a significant move by the Trump administration, Scott Bessent was appointed as the acting director of the Consumer Financial Protection Bureau (CFPB), which was established in 2010 following the financial crisis to protect consumers from unfair financial practices. The appointment came after the firing of Rohit Chopra, the previous director, who had a year left in his five-year term. This shift occurred against the backdrop of ongoing Republican efforts to dismantle or reform the CFPB, as the agency has been a long-standing target for conservative lawmakers. Bessent's prior role as Treasury Secretary and his background as a hedge fund executive suggest a shift in the agency's priorities. The White House directive instructed CFPB staff to halt all agency operations, including rule-making and enforcement actions. This move reflects a broader strategy to reshape the agency in line with Trump's agenda, reinforcing concerns that the CFPB's authority may be significantly curtailed. Observers noted that the CFPB’s previous actions, which secured substantial consumer relief and imposed hefty civil penalties against financial institutions, could be at risk. As Bessent begins his role, he is positioned to reverse many of the policies implemented under Chopra, a Democratic appointee, which might lead to more lenient regulations for financial institutions. Republican leaders and banking associations have expressed their support for Bessent, encouraging a reassessment of the agency's regulatory approach to improve the economic climate for banks. However, critics, including Senator Elizabeth Warren, who was instrumental in the creation of the CFPB, warned that undermining the agency could result in a fierce political battle, highlighting the continuing conflict between consumer protection and financial industry interests.