The Trump administration's efforts to shut down the Consumer Financial Protection Bureau (CFPB) have put small community banks at a disadvantage in competing with large banks. The CFPB is responsible for setting consumer protection rules for all banks and lenders, but only enforces these rules against banks with assets exceeding $10 billion. For smaller banks, enforcement responsibilities are mainly handled by their regulators—the Office of the Comptroller of the Currency, the Federal Reserve, and the Federal Deposit Insurance Corporation. Small banks say that even as the CFPB is gradually shrinking, these regulators continue to require small banks to comply with consumer protection rules. This creates a "regulatory gap": community banks still need to prepare for potential consumer enforcement actions, while large banks may have room to relax compliance requirements. In response, some Republican supporters of community banks have called on the Trump administration to clarify how bank regulation would be specifically enforced if the CFPB were dissolved. Since the beginning of this year, the Trump administration has taken significant measures to weaken the CFPB. Russell Vought, the director of the White House Office of Management and Budget who has served as acting head of the agency since February, has pushed to cut nine members of the staff and freeze its spending. The Trump administration has argued in court that it is legally prohibited from requesting new funding from the Federal Reserve, the CFPB's main funding source, meaning the bureau could run out of funds within the next few months.
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Original: toutiao.com/article/1853271434910795/
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