The Consumer Financial Protection Bureau (CFPB) is wasting no time signaling a shift in regulatory priorities under new leadership. Just days after President Trump removed Director Rohit Chopra and appointed Treasury Secretary Scott Bessent as Acting Director (which we covered here), the CFPB has already filed to pause two major fair lending cases in the Fifth Circuit Court of Appeals.

In a last-minute legal maneuver, the CFPB filed “emergency notices” in two high-stakes cases, backing out of scheduled oral arguments and requesting a pause in proceedings. These cases challenge Biden-era fair lending related initiatives, including:

• Expanding UDAAP rules to cover discrimination

• Mandatory demographic data collection for small business lending

This move is more than just procedural—it’s a clear signal that the CFPB is reassessing its regulatory agenda under the new administration. The financial industry should take note: a major shift in enforcement priorities could be underway.

What’s at Stake in the Fifth Circuit?

Each of these cases challenges the scope of the CFPB’s authority and raises fundamental questions about regulatory overreach.

Chamber of Commerce v. CFPB (No. 23-40650)

What’s the fight about?

• This case challenges the CFPB’s attempt to classify discrimination as an “unfair” practice under its UDAAP (Unfair, Deceptive, and Abusive Acts and Practices) authority.

• The lawsuit targets a March 2022 update to the CFPB’s Supervision and Examination Manual, which expanded fair lending scrutiny to include race, ethnicity, and sex-based discrimination across financial products.

• Plaintiffs (industry groups) argue that this goes beyond the CFPB’s statutory authority under the Dodd-Frank Act.

Why does it matter?

• If the Fifth Circuit strikes down this expansion, it could narrow the CFPB’s ability to regulate fair lending under UDAAP.

Texas Bankers Association v. CFPB (No. 24-40705)

What’s the fight about?

• This case challenges the CFPB’s rule under Section 1071 of Dodd-Frank, requiring lenders to collect and report demographic data on small business loan applicants, including:

• Race, ethnicity, and sex of business owners

• Whether a business is minority- or woman-owned

• Plaintiffs argue the rule imposes excessive compliance burdens.

Why does it matter?

• A ruling against the CFPB could gut this data collection requirement, easing compliance burdens for small business lenders.

What’s Next?

By pressing pause on these cases, the CFPB is likely reassessing its regulatory priorities—and possibly walking back some of the Biden-era fair lending policies.

What this means for businesses:

• Regulatory uncertainty—companies should be prepared for shifting compliance expectations.

• Possible rollbacks—the CFPB may revise, refocus or even rescind these policies altogether.

• Lighter enforcement—a scaled-back fair lending agenda could reduce compliance burdens for financial institutions temporarily, but fair lending enforcement always involves look-back periods so appearance could be deceiving.  In addition, even if the Trump administration takes a different tack, fair lending is likely to remain top of mind for regulators at both the federal and state levels for years to come.

Bottom Line: The CFPB’s early moves under Acting Director Bessent suggest a major shift in regulatory enforcement. Whether this is a temporary pause or a long-term change remains to be seen.  Recall that former CFPB Director Kraninger kept fair lending enforcement going, and even filed the first ever redlining lawsuit against a non-bank mortgage company (which our firm defended).  But financial institutions should be ready for a new enforcement playbook.

We’ll continue to monitor developments—stay tuned.

For questions about how these changes impact your business, contact Troy Garris at troy@garrishorn.com.