How the Uncertain Future of the CFPB Could Impact Your Money
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Learn more at Schwab.com slash trading. Here's your money briefing for Wednesday, February 19th. I'm Mariana Aspuru for The Wall Street Journal.

Upheaval at the Consumer Financial Protection Bureau has left the agency's future unclear and proposed rules on things like selling customer data and capping credit card late fees in doubt. We're talking about a federal regulator that consumers can go to report on their negative experiences with banks and financial payment apps. There really isn't any other that is as consumer facing as the CFPB.

So the options will be pretty limited for consumers if the CFPB is downsized or if it goes away. We'll talk with Wall Street Journal reporter Angel Au-Young about what's at stake and how it could impact you after the break. ♪

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Angel, what are some of the main functions of the CFPB? The CFPB is a federal regulator, and they supervise banks, payment companies, basically any financial institution that touches consumers and consumers interact with on a regular basis to move money, make transactions, etc. So your credit card accounts, your debit card accounts, like those kinds of companies. Yes, your credit cards, payment apps like Venmo, Cash App.

high-yield savings accounts. And why is the fate of the agency up in the air right now? The Trump administration has essentially identified the CFPB as having overreached its authority. This isn't an argument that is particular to Trump. And so since its founding, the CFPB has been a political target. And in the last couple of years, as the CFPB have ramped up their efforts to regulate banks,

Payments companies, other financial institutions, the Republicans have increasingly viewed this agency as overreaching its authority. Earlier this month, Trump installed a new head of the agency. And that agency, over a weekend, sent a memo to the entire staff of the CFPB, basically asking them to halt all supervisory activity and to stop making any decisions on active litigation from that moment on.

He also shut down the CFPB's headquarters for about a week. And after that memo was sent out, the fate of the agency has become really unclear. Are there any immediate changes that people will notice? Not so much. How the agency works is they basically do market research on certain industries. They create rules that are meant to protect the consumers.

And when they create these final rules, there's usually a couple months between the final rule being announced and the rule actually being implemented before consumers see any changes.

So many of the rules that are now in question have actually not been implemented yet. What key rules are currently at stake here? Some of the rules that are at stake include a cap on credit card late fees. Last March, the CFPB pushed out a final rule that said that credit cards cannot charge late fees more than $8. That rule was announced last March, and it was supposed to be implemented a couple months later.

But banking industry groups sued the CFPB to block that rule from being implemented. What's unclear about that rule now is whether the CFPB is even going to continue defending itself in court or if it's going to withdraw its appeal. There was another rule that the agency finalized late last year, which basically capped overdraft fees on checking accounts at $5, which

which is much lower than compared with the average fee of $35 that checking accounts usually charge today. The day the rule was announced, banking industry groups again sued to stop that rule from going into effect. And it was supposed to go into effect this October. The agency filed a motion basically asking the courts to pause the case,

And in the motion filing, it said that there was new leadership and had to review its position on various agency actions. The CFPB passed a rule about medical debt. Where does that stand? The medical debt rule is another rule that the agency pushed out in the last couple weeks before the Trump administration began. The rule basically bans the inclusion of medical debt on credit reports.

This rule was supposed to take effect in March. The fate of it is as unclear as the credit card lay fees and the overdraft rule. The CFPB also plays a heavy hand in regulating payment apps like Venmo and Apple Pay.

Is that regulation likely to change? In January of this year, the agency did pass a rule that would give them the authority to regulate payment apps in the same way that it actually regulates banks. This rule, it hasn't just been finalized, it's already been implemented. While it is less at risk than the other rules that we have discussed, it is still quite uncertain. To take a step back, people have also used the CFPB to file complaints and seek financial help.

Will those resources still be available if the future of the agency is uncertain? The Consumer Complaint Database is really a great resource for consumers to report any negative experiences that they're having with banks, financial payment apps.

And it is another factor that is unclear. And whether the CFPB, if it is restructured, if it is defanged, what happens to that database and what happens to the website, what happens to how it's managed, it's unclear. But if the CFPB is downsized, if it goes away, that is not going to be a great thing for consumers, to just put it bluntly.

There are consumer watchdog groups, so basically non-government entities that consumers do report to. Most of them are nonprofits. And so those will still be available to consumers. But when we're talking about a federal regulator that consumers can go to report on their negative experiences with banks and financial payment apps, there really isn't any other that is as consumer facing as the CFPB.

So the options will be pretty limited for consumers if the CFPB is downsized or if it goes away. That's WSJ reporter Angel Au-Young. And that's it for Your Money Briefing. I'm Mariana Aspuru for The Wall Street Journal. This episode was produced by me with supervising producer Melanie Roy. Thanks for listening.

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