CFPB to Conduct Comprehensive Review of Previously Issued Guidance Documents

The CFPB will begin the process of discontinuing regulatory "guidance" and instead enforce the Administrative Procedure Act's rulemaking process. In a pair of internal memos circulated to all divisions and offices within the agency, and as reported by media outlets, on April 11, 2025, Acting CFPB Director Russell Vought announced the agency's plan to conduct a "comprehensive internal review of guidance documents" to ensure they do not supplant the proper rulemaking process.

Vought reportedly expressed his disapproval of the agency's tendency to engage "in weaponized practices that treat legal restrictions on its authorities as barriers to overcome rather than laws that we are oath-bound to respect." Vought reportedly noted that "[t]his weaponization occurs with particular force in the context of the Bureau's use of sub-regulatory 'guidance.' The use of guidance to regulate is unlawful and deprives the public of fair notice of what conduct is prohibited." He communicated the Trump Administration's intention to "rescind all 'guidance' that has unlawfully regulated private parties in the past" as "it is not enough to simply stop regulation through guidance prospectively. The Bureau will no longer engage in this practice. Effective immediately, Bureau components may not issue guidance documents that purport to create rights or obligations binding on persons or entities outside the Bureau." To that end, the CFPB is conducting "a comprehensive internal review of guidance documents to ensure that the Bureau is not imposing rights or obligations through guidance."

A related internal memo expanded on Vought's initial statements reportedly pronounced 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." Accordingly, any guidance issued by the CFPB moving forward must make clear that it is nonbinding and cannot include any mandatory language "unless it is repeating a statutory or regulatory obligation, imposing obligations beyond the terms of laws and regulations or failing to specify that non-compliance won't result in enforcement actions." An attached appendix included more than 120 previously issued CFPB policy statements, interpretive rules, advisory opinions and other guidance that will be subject to the review and may be rescinded. Notably, the appendix includes items dating back to 2012, guidance documents issued under every CFPB director, and all bulletins and circulars published by Rohit Chopra, CFPB director under President Joe Biden.

Though some of the identified guidance documents are inapplicable and out of date – particularly policy statements issued in response to the COVID-19 pandemic and recent natural disasters, as well as other guidance documents that cautioned banks against account fee practices, warned against discrimination based on sexual orientation by lenders, heightened standards for FinTech-related products and provided other compliance details for financial services – will be on the chopping block. And though Vought's memos identify particular guidance documents for review, that list is not exhaustive – CFPB staff has been to reviewing "any and all" existing guidance documents defined as "any bureau statements of general applicability and future effect, however styled (including 'blog posts' and the like)."

Each CFPB division is charged with reviewing its own previous guidance materials. When undertaking the review, CFPB staff has been instructed to retain only guidance documents that are "faithful to the statutory or regulatory requirements," do not "create new rights or obligations for private parties" and are "not unnecessarily burdensome." Guidance documents in compliance with this standard are to be included on a comprehensive list of documents "flagged for retention" and include a "brief explanation" of the document's lawful function. Because the default option for guidance documents will be withdrawal, "all documents not flagged for retention will be promptly rescinded after review by the bureau's leadership."

According to Vought, the "overwhelming majority of the Bureau's existing guidance appears to not clear" the newly assigned standard of review. In light of the requirement that all documents that tend to coerce entities into taking any action or refrain from any action "beyond what is required by the terms of the applicable statute or regulation" be withdrawn, the vast majority of CFPB guidance documents could soon be rescinded. All lists are due to be submitted by April 25, 2025, when CFPB leadership will then undertake a review of "any guidance that staff proposes to retain." The CFPB has yet to indicate whether its leadership will allow past guidance to be amended rather than withdrawn entirely or whether feedback from financial firms, consumer advocates or interested parties will be given a role in advocating for the preservation of particular documents. Further, it has yet to be communicated how the CFPB will publicly identify which guidance is rescinded or whether it will be electronically preserved.

Conclusion

Vought's intention to rescind overly broad guidance documents in favor of the proper rulemaking process comes after the CFPB demonstrated its intention to rely on the rulemaking process to potentially rescind or narrow the scope of the Nonbank Registry Rule (as Holland & Knight previously reported) and resolve challenges to the small business loan data collection and reporting rule (1071 Rule) (as we previously noted). This internal review is also in line with the Trump Administration's goal of restructuring the CFPB to reach only the scope of its statutory functions, rather than impose discretionary and advisory guidance.

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