Preventing Financial Struggle With Relief in 2026

Capstone thinks the Trump administration is intent on dismantling the Consumer Financial Security Bureau (CFPB), even as the agencyconstrained by limited spending plans and staffingmoves forward with a broad deregulatory rulemaking agenda beneficial to market. As federal enforcement and guidance decline, we anticipate well-resourced, Democratic-led states to step in, developing a fragmented and uneven regulatory landscape.

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While the ultimate result of the litigation stays unidentified, it is clear that consumer financing companies throughout the ecosystem will take advantage of lowered federal enforcement and supervisory risks as the administration starves the agency of resources and appears dedicated to reducing the bureau to a company on paper only. Since Russell Vought was called acting director of the company, the bureau has dealt with lawsuits challenging numerous administrative decisions meant to shutter it.

Vought also cancelled numerous mission-critical contracts, issued stop-work orders, and closed CFPB offices, to name a few actions. The CFPB chapter of the National Treasury Worker Union (NTEU) immediately challenged the actions. After evidentiary hearings, Judge Amy Berman Jackson of the US District Court for the District of Columbia released an initial injunction stopping briefly the decreases in force (RIFs) and other actions, holding that the CFPB was trying to render itself functionally inoperable.

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DOJ and CFPB legal representatives acknowledged that eliminating the bureau would require an act of Congress which the CFPB stayed accountable for performing its statutorily needed functions under the Dodd-Frank Wall Street Reform and Customer Security Act. On August 15, 2025, the DC Circuit released a 2-1 decision in favor of the CFPB, partially abandoning Judge Berman Jackson's initial injunction that obstructed the bureau from carrying out mass RIFs, however remaining the choice pending appeal.

En banc hearings are hardly ever approved, however we expect NTEU's request to be authorized in this instance, given the comprehensive district court record, Judge Cornelia Pillard's prolonged dissent on appeal, and more recent actions that indicate the Trump administration means to functionally close the CFPB. In addition to litigating the RIFs and other administrative actions targeted at closing the firm, the Trump administration intends to develop off budget plan cuts integrated into the reconciliation expense passed in July to even more starve the CFPB of resources.

Dodd-Frank insulates the CFPB from direct appropriations by Congress, instead licensing it to demand funding directly from the Federal Reserve, with the amount topped at a percentage of the Fed's operating costs, based on a yearly inflation change. The bureau's capability to bypass Congress has routinely stirred criticism from congressional Republicans, and, in the spirit of that ire, the reconciliation plan passed in July decreased the CFPB's funding from 12% of the Fed's operating costs to 6.5%.

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In CFPB v. Neighborhood Financial Solutions Association of America, offenders argued the financing approach breached the Appropriations Clause of the Constitution. The Trump administration makes the technical legal argument that the CFPB can not legally demand funding from the Federal Reserve unless the Fed is rewarding.

The CFPB said it would run out of money in early 2026 and could not lawfully demand funding from the Fed, mentioning a memorandum opinion from the DOJ's Office of Legal Counsel (OLC). As a result, because the Fed has actually been running at a loss, it does not have actually "integrated incomes" from which the CFPB might legally draw funds.

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Accordingly, in early December, the CFPB followed up on its filing by corresponding to Trump and Congress saying that the company needed around $280 million to continue performing its statutorily mandated functions. In our view, the brand-new but repeating funding argument will likely be folded into the NTEU lawsuits.

Most consumer financing companies; home mortgage loan providers and servicers; car loan providers and servicers; fintechs; smaller sized consumer reporting, debt collection, remittance, and automobile financing companiesN/A We expect the CFPB to press aggressively to carry out an ambitious deregulatory program in 2026, in tension with the Trump administration's effort to starve the firm of resources.

In September 2025, the CFPB published its Spring 2025 Regulatory Agenda, with 24 rulemakings. The program follows the agency's rescission of nearly 70 interpretive guidelines, policy statements, circulars, and advisory opinions dating back to the company's inception. The bureau released its 2025 guidance and enforcement concerns memorandum, which highlighted a shift in guidance back to depository institutions and mortgage loan providers, an increased focus on areas such as fraud, assistance for veterans and service members, and a narrower enforcement posture.

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We see the proposed guideline changes as broadly favorable to both consumer and small-business lenders, as they narrow prospective liability and exposure to fair-lending scrutiny. Specifically relative to the Rohit Chopra-led CFPB throughout the Biden administration, we anticipate fair-lending guidance and enforcement to practically disappear in 2026. A proposed guideline to narrow Equal Credit Chance Act (ECOA) regulations aims to eliminate diverse impact claims and to narrow the scope of the discouragement provision that prohibits creditors from making oral or written declarations planned to prevent a customer from applying for credit.

The new proposal, which reporting suggests will be finalized on an interim basis no behind early 2026, significantly narrows the Biden-era rule to omit certain small-dollar loans from coverage, lowers the limit for what is considered a small business, and eliminates numerous data fields. The CFPB appears set to issue an upgraded open banking rule in early 2026, with considerable ramifications for banks and other standard monetary organizations, fintechs, and information aggregators across the consumer finance community.

The rule was completed in March 2024 and included tiered compliance dates based on the size of the banks, with the biggest required to start compliance in April 2026. The last rule was instantly challenged in Might 2024 by bank trade associations, which argued that the CFPB exceeded its statutory authority in releasing the guideline, particularly targeting the restriction on fees as unlawful.

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The court issued a stay as CFPB reconsidered the guideline. In our view, the Vought-led bureau may think about permitting a "sensible fee" or a similar requirement to allow data providers (e.g., banks) to recoup expenses related to providing the information while also narrowing the risk that fintechs and information aggregators are evaluated of the marketplace.

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We anticipate the CFPB to significantly reduce its supervisory reach in 2026 by finalizing 4 bigger participant (LP) rules that establish CFPB supervisory jurisdiction over non-bank covered individuals in numerous end markets. The changes will benefit smaller operators in the consumer reporting, car financing, consumer financial obligation collection, and global cash transfers markets.