The Consumer Financial Protection Bureau just made a move that most Americans will never hear about, but they should. Last week, Acting Director Russ Vought rescinded a dangerous interpretive rule that had, until now, deputized state attorneys general to enforce a wide swath of federal consumer protection laws, laws they were never elected or authorized to police.
At the Southwest Public Policy Institute, we consider this to be a very big deal.
The rule in question, issued by former CFPB Director Rohit Chopra in 2022, effectively allowed states to bypass Congress and the courts in order to enforce not only the Consumer Financial Protection Act (CFPA) but also the Truth in Lending Act, the Fair Credit Reporting Act, and other federal statutes. It was a bold power grab dressed up as “consumer protection,” and it dramatically expanded the reach of activist attorneys general in states like California, New York, and Massachusetts.
The consequences of that overreach were predictable: duplicative investigations, inconsistent enforcement, and a chilling effect on innovation in the financial sector. For businesses trying to operate nationally and consumers seeking access to credit, this kind of regulatory chaos is not merely inconvenient; it’s destructive.
Vought’s decision to reverse course should be applauded. His analysis, published in the Federal Register, correctly recognizes that the CFPA does not give states a blank check to enforce federal laws. It respects the constitutional boundaries between federal and state authority, restores legal predictability, and reaffirms a fundamental principle: federal law should be enforced by federal agencies, ideally under clear guidance, not through backdoor rulemaking.
This rescission is also part of a broader reform effort at the CFPB. Under Vought’s leadership, the Bureau has walked back more than 67 guidance documents issued during Chopra’s tenure. Many of these were policy statements and advisory opinions issued without notice or public comment. This circumvents the Administrative Procedure Act and undermines due process. In another sign of good faith, the CFPB has dismissed or withdrawn more than half of its pending enforcement cases, acknowledging that many were built on shaky legal ground or activist ideology.
For those of us who believe in limited government, the rule of law, and the importance of financial inclusion, this is a critical reset.
Of course, progressive critics are already howling. They claim this change will weaken consumer protections. But let’s be honest: consumers aren’t protected when the rules change with every new administration, when businesses are afraid to innovate, or when law enforcement becomes a partisan tool. What consumers need is stability, transparency, and access to products that fit their needs.
So, to Acting Director Vought: attaboy. This is the kind of leadership we’ve been waiting for at the CFPB. And to everyone watching: let this be a reminder that policy matters, even when it doesn’t make headlines.
We’ll be watching, and we’ll keep advocating for a regulatory climate that respects both liberty and the law.