From heavy hand to light touch: How CFPB rulemaking shifted in 2025

The Consumer Financial Protection Bureau (CFPB) was established in response to the 2008 financial crisis to serve as a watchdog over financial markets and champion fairness and transparency for everyday Americans. Since its inception, the CFPB has been a focal point of debate over federal regulatory power, drawing both praise for robust consumer safeguards and criticism for aggressive intervention. The tension between regulatory zeal and market freedom is not new, but it has been especially pronounced over the past few years.

In 2024 alone, the CFPB under Director Rohit Chopra finalized 24 rules and issued 27 enforcement actions. By contrast, under Acting Director Russ Vought, the CFPB finalized eight rules and issued a single enforcement action, while cutting staff and withdrawing 67 guidance documents. Not only was the CFPB’s regulatory output lower in 2025 than in 2024, but it also focused more on procedural adjustments and rescissions instead of the aggressive regulatory agenda pursued in 2024. This year‑over‑year change provides a clear lens through which to examine how CFPB policy and practice are evolving.  

Why procedural rules matter
The last CFPB final rule for the 2025 calendar year is entitled Rules of Practice for Adjudication Proceedings. It sounds drier than a saltine cracker. Yet these seemingly mundane procedural rules have real consequences for consumers. Under the Biden administration, the CFPB director was given extensive authority over procedural decisions on timing and evidence that could influence outcomes and raise concerns about impartiality.

The 2025 update returns that decision-making authority to more neutral hearing officers, who are normally administrative law judges (ALJs). While the ALJ process is far from perfect, and while CEI has previously written about the importance of access to Article III courts for those accused of regulatory violations, concentrating authority for procedural decisions politicizes the process even further. Procedural fairness is vital because it reduces the likelihood of Bureau overreach or penalties that ultimately raise costs or restrict access to financial products.

At the same time, this predictability and restraint will help stabilize markets. When businesses can anticipate how enforcement cases will be handled, they are less likely to pull back from lending, raise prices, or limit products, all of which keep credit flowing and the financial marketplace functioning smoothly for consumers.

Cutting red tape: Rescinding the nonbank registry
In 2025, the CFPB took a small but noteworthy step toward regulatory restraint by rescinding the Registry of Nonbank Covered Persons requirement. In this context, nonbank firms are financial companies that offer credit or other financial services but are not traditional banks, such as online lenders, mortgage brokers, or payday lenders.

The previous requirement forced certain nonbank entities to be listed publicly if they had agency or court orders against them. Industry groups, such as the US Chamber of Commerce, argued that the CFPB’s nonbank registry imposed costs on firms without providing real benefits to consumers, noting that all the information it would disclose was already publicly available and unlikely to change consumer behavior. This rescission will eliminate the need for unnecessary reporting and administrative work. As a third-party analysis from the Small Business Administration shows, this rescission could save small businesses between $28.7 million and $143.4 million in compliance costs over the next decade.

Course correction on Buy Now, Pay Later
Buy Now, Pay Later (BNPL) is a short-term financing option that lets consumers split a purchase into fixed installments, usually without interest. Unlike traditional revolving credit, BNPL loans are closed-end loans with a set repayment schedule. As former CEI Research Fellow Patricia Patnode explained, the appeal of BNPL is that “modern BNPL platforms provide transparency and convenience, empowering consumers to make informed financial decisions and offering much-needed competition to traditional leasing agreements or layaway options.”

These differences highlight the CFPB’s lighter-touch approach in 2025 when it withdrew the previous administration’s interpretive rule treating BNPL products as credit cards under the Truth in Lending Act. Unlike a final rule, an interpretive rule provides guidance on how regulators believe existing law applies. The previous CFPB had attempted to impose credit-card-style requirements on BNPL providers, disregarding their fixed-installment, closed-end structure.

While no official dollar estimate exists for the withdrawn BNPL interpretive rule, a Government Accountability Office (GAO) report reviewing analogous CFPB credit card regulations under Regulation Z shows that compliance with disclosure, billing, and dispute procedures requires substantial operational infrastructure. Applying a revolving credit framework to a nascent, evolving BNPL market would have likely imposed even greater burdens, slowed product rollout, and increased costs, such as retrofitting systems designed for fixed-installment loans to meet rules intended for open-end credit. By withdrawing the rule, the CFPB avoided these unnecessary burdens, letting the market innovate while maintaining consumer access to flexible, transparent payment options.

Restraint benefits both markets and consumers
The policy decisions under Director Vought signal a practical, outcomes-focused approach to financial regulation. By limiting regulatory overreach, the Bureau has created space for competition and innovation. Businesses can focus on delivering products efficiently while consumers continue to enjoy access to diverse, transparent financial options. Even within the constraints of federal oversight, measured restraint proves far superior to aggressive intervention. The CFPB exercising restraint shows that less intrusive regulations are the most prudent path forward for market proliferation and consumer protection.