Consumers brace for steeper bills and lower credit scores from Trump's financial deregulation

NBC News

a day ago

Rob Haskell was hoping a new rule would shield his credit report from thousands of dollars in bills for recent heart procedures. Instead, he's bracing for impact from President Donald Trump's push to slash financial regulations.
'I've always had medical debt hanging over me but, you know, it's just completely unmanageable,' Haskell said in late May. He was speaking to NBC News from a hospital bed at PeaceHealth St. Joseph Medical Center in Bellingham, Washington, days before an open heart surgery that threatened to yield another steep bill.
'So, to the moon on that one,' he sighed.
A lot of people don't necessarily know about the CFPB and may not understand how it's being attacked, but they will be affected.
Adam Rust, consumer federation of america
The 58-year-old contractor said he has battled a series of heart and kidney issues for most of his life. Despite having health insurance, his medical needs have resulted in thousands of dollars in debt.
Haskell recently paid off a $5,000 bill that knocked his credit score 21 points lower — debt that might have been spared from his report under a rule instituted in the final days of the Biden-era Consumer Financial Protection Bureau. The CFPB estimated at the time that the measure would have spared $49 billion in bills from hitting the reports of 15 million people.
But in April, Trump-appointed leadership at the consumer watchdog reversed its position and threw its support behind credit unions and consumer reporting companies seeking to block the rule in a Texas federal court. After twice delaying the policy's March start date, the judge is expected to rule within days.
Haskell used some retirement savings to pay off his last operation, in 2024. Before his heart surgery last month, he'd hoped the medical debt rule would finally help smooth out his finances, boost his credit score above 700, and improve his chances of buying property to build a home. That now appears unlikely.
'There really was very little information about the whole thing,' Haskell said of the CFPB's about-face. 'I was really surprised.'
The change adds to the financial risks consumers increasingly face from months of cuts and policy rollbacks at the agency, advocates say, contributing to broader economic uncertainty stoked by Trump's trade war. Since January, CFPB leadership has attempted to fire nearly all of the agency's 1,700 workers, halted standard supervisory and enforcement actions and blocked rules aimed at buttressing consumers' wallets.
The actions have stunned consumer advocates who just months ago had expected at least some of the Biden-era guidance to remain untouched. Some pointed to the populist economic message that propelled Trump back into the Oval Office, even though the CFPB — itself a byproduct of populist frustrations churned up by the 2008 financial crisis — has drawn GOP ire since its inception.
'These rules generally are very politically popular,' said Chi Chi Wu, a senior attorney at the National Consumer Law Center, a nonprofit group that stepped in to defend both the medical debt rule and a separate one capping overdraft fees at large banks at $5. The latter measure was voided in early May when Trump signed House Republicans' resolution repealing it. When federal agencies' policies are nullified under the Congressional Review Act, they're prevented from issuing substantially similar ones in the future.
'They're actively harming regular, hard-working Americans so that their billionaire buddies can profit,' Wu said of administration officials. 'There's really no other way to look at it.'
Spokespeople for the CFPB and the White House didn't respond to requests for comment.
The Trump administration has cast its changes as efforts to combat government overreach. In remarks to the American Bankers Association in April, Treasury Secretary Scott Bessent, who was appointed acting director of the CFPB in late January, described Biden-era rules as politically biased and criticized their 'compliance costs' that could impede 'responsible lending and risk-taking.'
'The associated mission drift can lend itself to political ends,' he said at the time.
The consumer banking industry has applauded efforts to rein in the agency.
'How do we take politics out of regulation, where it never should have been?' Lindsey Johnson, president and CEO of the Consumer Bankers Association, said at a recent industry event. She also thanked Trump in a statement last month cheering the elimination of the overdraft rule 'for protecting consumer choice and access to a deeply valued financial tool utilized by millions of Americans in times of need.'
Republican policymakers, both at the CFPB and in Congress, have taken steps to unwind other recent financial regulations.
In April, a Biden-era rule capping most credit card late fees at $8 was eliminated. So was a policy aimed at tightening regulations around the sale of consumers' financial data and Social Security numbers. The CFPB has also abandoned a lawsuit against the three big banks that operate the digital payments platform Zelle, which was accused of mishandling users' fraud complaints totaling more than $870 million since 2017.
Gone, too, are oversight powers over big tech companies offering payment tools and plans to hold Buy Now, Pay Later services — which have rapidly become many consumers' default choice of credit — to the same regulations as card issuers.
'A lot of people don't necessarily know about the CFPB and may not understand how it's being attacked, but they will be affected,' said Adam Rust, director of financial services at the Consumer Federation of America. 'Partisanship is what is driving these actions, both by Congress and the CFPB, and it strikes me as an inside-the-Beltway game that ignores the effect on regular people.'
In the meantime, some advocates are shifting focus to state and municipal safeguards. New York City Comptroller Brad Lander published a report this week outlining how the city and the state can fill the void left by a CFPB 'in crisis,' recommending a consumer restitution fund and bank overdraft caps. In January, California instituted its own prohibitions on health care providers and debt collectors from reporting medical debt to credit agencies.
Still, Armen Meyer, a financial policy consultant who has served as both a fintech executive and a bank regulator, said he expects 'many, many consumers will be harmed no matter how much the states stand up.'
When you're broke, you're broke. You just do what you can to survive.
George Curlee, Garland, Texas
George Curlee, 51, is keenly aware of how the CFPB's policy reversals threaten his finances.
In 2023, the Garland, Texas, resident underwent an emergency toe amputation that resulted in $61,000 in total medical debt despite the insurance he'd purchased on an Affordable Care Act marketplace. Around the same time, he was fired from his retail job and his credit score plunged 60 points.
Curlee said he has since managed to whittle the debt down to about $50,000 and found part-time work in March. The job pays less than half his previous $40,000 annual salary, and he's been living with two of his brothers to save money.
'When you're broke, you're broke,' he said. 'You just do what you can to survive.'
Curlee now fears worse to come because of House Republicans' so-called Big Beautiful Bill, which the Congressional Budget Office estimates would push at least 16 million people off health insurance by 2034 — including those who pay for ACA coverage like him. He has since joined advocates to lobby policymakers against the proposed cuts and in favor of preserving the medical debt rule.
'I really wish that politicians would take the politics out of these bills and do what's right for the American people,' he said. 'This is a little insane.'