The CFPB is not required to comply with President Trump’s executive order limiting new regulations, according to a memorandum from The White House. Trump’s order—which requires covered agencies to repeal two regulations for every one new regulation adopted—does not apply to the CFPB, which is considered an independent agency.
The order, which Trump signed on Jan. 30, caused a flurry of speculation among observers in the payments and financial services industry as to whether the rule would apply to the CFPB. But in a follow-up memorandum, Dominic Mancini, acting administrator of the White House Office of Information and Regulatory Affairs (OIRA), clarified that the CFPB is not covered by the “1 in, 2 out” requirement. According to an entry in the memorandum’s FAQ section, the requirements set forth under the order “apply only to those agencies required to submit significant regulatory actions to OIRA for review.” Agencies not required to do so—such as the CFPB—are exempt. “Nevertheless, we encourage independent regulatory agencies to identify existing regulations that, if repealed or revised, would achieve cost savings that would fully offset the costs of new significant regulatory actions,” the memorandum said.
The CFPB’s current status as an independent agency could change depending on the outcome of an ongoing court battle challenging the bureau’s structure as unconstitutional, along with proposed legislation that would change the leadership structure to a bipartisan commission. Should the consumer watchdog be stripped of its independent status, it would be required to comply with the executive order. A court loss also would mean President Trump could remove CFPB Director Richard Cordray for any reason. Before taking office in January, Trump met with former U.S. Rep. Randy Neugebauer, a longtime critic of the CFPB, about potentially taking the reins of the agency.
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