The Consumer Financial Protection Bureau has withdrawn its May 2025 direct-final rule that would have scrapped the procedures requiring state regulators and attorneys general to alert the Bureau and other regulators at least 10 days before they file an enforcement action under the Consumer Financial Protection Act. In a Federal Register notice slated for publication today, the Bureau said the rescission is off the table after it received “significant adverse comments.”
Why it matters:
- Coordination, not chaos: The original rescission would have let states sue first and inform later, raising the prospect of conflicting or duplicative litigation against debt collectors, servicers and other covered entities.
- Status quo preserved: For now, states must keep following the existing notice protocol, which means giving the CFPB time to weigh in, intervene or join an action while it figures out whether and how to tweak the rule.
- Early warning for industry: The notice window lets companies anticipate multi-regulator actions and potentially engage with both state and federal overseers before a case is filed.
Flashback: Acting on the Trump administration’s deregulatory directive, the CFPB in May proposed repealing the notice rules, pledging to reverse course only if commenters objected.
State of play: The withdrawal takes effect July 21, 2025, the same day the Bureau’s original repeal would have become final. Acting Director Russell Vought signed the notice, emphasizing the Bureau will handle the objections “in a subsequent rulemaking.”
What’s next:
- New proposal on deck: Expect the CFPB to issue a conventional notice-and-comment rule that might keep the notice requirement but adjust timing or scope in response to stakeholder suggestions.
- Monitoring recommended: Collection agencies, debt buyers and fintech lenders should revisit compliance procedures to ensure they can respond quickly if a state notifies the Bureau of an impending CFPA suit.
- Watch the timeline debate: Industry commenters will push for a longer notice period; consumer groups may urge tighter coordination requirements. Until the CFPB proposes specifics, the 10-day rule remains in force.
