The Consumer Financial Protection Bureau is setting up its succession plan, and for anyone in the collections industry trying to read where the bureau is headed, the name to watch is now Mark Paoletta, according to a report published by Bloomberg Law.
Paoletta, the agency’s chief legal officer, has been named deputy director, according to a May 29 staff email obtained by Bloomberg. He keeps his job as the bureau’s top lawyer while taking on the No. 2 role, and the timing is the tell. Acting Director Russell Vought is required to step aside in August, when the law no longer permits him to serve in that capacity.
The move matters because of how acting leadership works at the bureau. Under the 1998 Federal Vacancies Reform Act, a deputy director or other senior official can run an agency on an acting basis until the Senate confirms a permanent head. Naming Paoletta to the deputy post gives the administration a clear path to keep a loyalist in charge once Vought’s term ends. It is the same mechanism the prior administration used when Dave Uejio, then chief strategy officer, ran the bureau while Rohit Chopra awaited confirmation.
For readers who have watched the bureau over the past decade, Paoletta is not a back-office figure. He has been the architect of the administration’s effort to reshape the CFPB, and his fingerprints are on nearly every change that has touched creditors and collectors.
A few of the shifts that have reshaped the compliance landscape:
- Fair lending enforcement has been gutted, with the bureau dropping disparate impact, the statistical method used to identify discriminatory lending outcomes, as a basis for cases.
- The Biden-era small business data collection rule has been watered down.
- Supervision has been scaled back across the board, with fewer exams and a shift toward virtual visits.
- Enforcement has nearly stopped, with dozens of cases dropped under Paoletta and Vought.
The administration’s outright attempt to shut down the bureau remains blocked in court. In its place, the CFPB is now proposing to cut roughly half its staff and refocus on writing rules and defending new regulations against legal challenges. Those layoffs are still awaiting court approval.
Geoffrey Gradler, who held the deputy director title since last year, moves to chief of staff, per the report.
