FinReg Currents - Week 4

Each week of the first 100 days of the new Trump administration, we will publish updates on key federal financial services regulatory and related developments.

This week, we review the following developments as of Wednesday:

• New Consumer Financial Protection Bureau (CFPB) Acting Director, Permanent Director Nomination
• Further Developments at the CFPB
• New Acting Head of the Office of the Comptroller of the Currency (OCC), Permanent Head Nomination
• Potential Federal Banking Agency Consolidation
• Commodity Futures Trading Commission (CFTC) Chairman Nomination, Crypto CEO Forum

New CFPB Acting Director, Permanent Director Nomination

On February 7, 2025, newly confirmed Office of Management and Budget (OMB) director Russell Vought replaced Treasury Secretary Scott Bessent as acting director of the CFPB.

• In a February 9, 2025 post on his X account, Vought said that, pursuant to the Consumer Financial Protection Act, he “notified the Federal Reserve that CFPB will not be taking its next draw of unappropriated funding because it is not ‘reasonably necessary’ to carry out its duties. The Bureau’s current balance of $711.6 million is in fact excessive in the current fiscal environment.” The CFPB receives its funding from the Federal Reserve, rather than through congressional appropriations.

On February 11, 2025, President Trump nominated Jonathan McKernan to be the permanent director of the CFPB for a five-year term. McKernan resigned from his position on the board of the Federal Deposit Insurance Commission on February 10, 2025. He also has prior experience at the Federal Housing Finance Agency and as Republican staff counsel to the Senate Banking Committee.

Further Developments at the CFPB

According to press reports, on February 7, 2025, three employees of the Department of Government Efficiency (DOGE) arrived at CFPB headquarters in Washington, D.C. and requested read-only access to procurement, human resources, and financial data. Press reports said the DOGE employees were added to the CFPB staff directory as “senior advisors.”

On February 7, 2025, DOGE head Elon Musk posted “CFPB RIP” on his X account.

According to press reports, CFPB Acting Director Vought:

• On February 8, 2025, expanded the halt of CFPB proceedings to include supervisory activities;
• On February 9, 2025, informed employees that CFPB headquarters would be shut down for the week; and
• On February 10, 2025, ordered employees to “not perform any work tasks” and to inform the OMB chief legal officer if anything urgent comes up.

On February 9, 2025, the National Treasury Employees Union, which represents federal employees, including those of the CFPB, filed two lawsuits against Vought as acting director, one to challenge “the Executive Branch’s ongoing effort to dismantle the CFPB” and one to stop the CFPB’s “ongoing disclosure of employees’ personal information” to DOGE.

In a February 10, 2025 press release, the White House said the CFPB “leverages its power against certain industries” and disfavored individuals.

On February 11, 2025, according to press reports, the CFPB’s enforcement director and supervision director resigned. Additional press reporting said the CFPB is canceling more than $100 million in vendor contracts, including more than 100 contracts for the enforcement division, more than 15 contracts for the supervision division, and more than 30 contracts for the office of the director. According to another February 11, 2025 press report, the CFPB has terminated approximately 70 probationary employees.

New Acting Head of the OCC, Permanent Head Nomination

On February 7, 2025, Secretary Bessent announced the appointment of Rodney Hood as a deputy comptroller of the currency and designated him the first deputy comptroller, a role in which Hood will also serve as acting comptroller of the currency. Effective January 10, 2025, Hood succeeded Michael Hsu, who had served as acting comptroller of the currency since May 2021. Hood served as chairman of the National Credit Union Administration Board from 2019 to 2021. As part of this position, Hood was a member of the Financial Stability Oversight Council and vice chairman of the Federal Financial Institutions Examination Council.

On February 11, 2025, President Trump nominated Jonathan Gould to be the permanent comptroller of the currency for a term of five years. Gould is a former senior deputy comptroller and chief counsel at the OCC. There is no timeline for Senate consideration of Gould’s nomination.

Potential Federal Banking Agency Consolidation

According to a February 11, 2025 press report, the Trump administration is considering consolidation of the federal banking agencies. Options reportedly under consideration include consolidating the FDIC into the Treasury Department or consolidating certain FDIC functions with those of the OCC. The OCC is an independent bureau of the Treasury Department.

CFTC Chairman Nomination, Crypto CEO Forum

On February 11, 2025, President Trump nominated Brian Quintenz to be chairman of the CFTC. Quintenz was a former Republican CFTC commissioner and head of policy at the digital asset division of Andreessen Horowitz, a.k.a. a16z.

On February 7, 2025, the CFTC announced that it is in the process of organizing a CEO forum of industry leaders to discuss the launch of the CFTC’s digital asset markets pilot program for tokenized non-cash collateral such as stablecoins.

For more details on any of these developments, or to discuss how these changes may impact your business, please reach out to our team. Stay tuned for next week’s update, where we will continue to bring you the latest in federal financial services regulatory and related developments.

You may use the following links to access our prior issues:

FinReg Currents – Week 3 | Morrison Foerster

FinReg Currents – Week 2 | Morrison Foerster

FinReg Currents – Week 1 | Morrison Foerster