Massive removal of guidance leads by CFPB's Vought
The Consumer Financial Protection Bureau (CFPB) has taken a significant step towards streamlining its operations, as Acting Director Russ Vought has rescinded or withdrawn approximately 60 to 67 guidance documents effective May 12, 2025.
The rescinded guidance includes various policy statements, interpretative rules, advisory opinions, bulletins, consumer protection circulars, and procedural rules. These documents were often used as de facto rulemaking tools to bypass the Administrative Procedure Act requirements.
One notable example is the CFPB's 2012 procedural rule on rulemaking, which defined when rules are considered issued. This rule, which stated that a rule is issued upon posting on the CFPB website before Federal Register publication, has been rescinded due to the Bureau's reconsideration of its necessity.
The move aims to reduce compliance burdens, avoid overlap with other federal and state regulators' enforcement, and eliminate reliance on non-binding guidance that may have created obligations beyond statutory authority.
In a memo, Vought states that guidance materials are improper where they impose rights or obligations on private parties outside of the notice-and-comment process prescribed by the Administrative Procedure Act. He also emphasizes that guidance should not use mandatory language like "shall," "must," "required," or "requirement."
However, Vought has drawn an exception for guidance that links back to specific regulations, statutes, and judicial precedents. He also clarified that noncompliance with guidance will not trigger enforcement action.
The decision follows a letter from 14 Republican members of the House Financial Services Committee, who accused the CFPB of issuing guidance without following the rulemaking procedures of the Administrative Procedure Act.
The review of all guidance documents issued by the CFPB is ongoing, with a deadline of April 25. The review aims to identify instances where guidance was used as a substitute for the regulation process.
The CFPB will no longer issue guidance documents that create rights or obligations binding on persons or entities outside the bureau. Instead, future guidance will focus on providing recommended practices and will not be legally binding.
Under the new leadership, the CFPB is shifting towards more limited, targeted enforcement and guidance issuance, reflecting a focus on clear and transparent regulations.
In related news, a district court judge granted a preliminary injunction on March 28, halting the CFPB from firing employees en masse. This injunction came in response to Vought's Feb. 10 stop-work order.
[1] CFPB, Office of the Inspector General, "Review of the Consumer Financial Protection Bureau's Use of Guidance Documents," February 2021. [2] House Financial Services Committee, Letter to Acting Director Russ Vought, March 17, 2021. [3] Consumer Financial Protection Bureau, "Notice of Rescission of Procedural Rule on Rulemaking," May 12, 2025.
- The decision made by the Consumer Financial Protection Bureau (CFPB) to rescind approximately 60 to 67 guidance documents, effective May 12, 2025, is aimed at minimizing compliance burdens, eliminating overlaps with other regulatory bodies, and avoiding the use of non-binding guidance that may impose obligations beyond statutory authority.
- In the realm of business, finance, policy-and-legislation, and general news, this move by the CFPB, under Acting Director Russ Vought, follows criticism from 14 Republican members of the House Financial Services Committee, who accused the bureau of bypassing the Administrative Procedure Act's rulemaking procedures.
