No More ‘Thuggery’: CFPB to Require ‘Humility Pledge’ From Examiners; FASB Publishes Update on Purchased Loans

WASHINGTON–The CFPB said it will now require its examiners to recite a “humility pledge” prior to examinations

Russell T. Vought, the White House budget director who is also acting director of the CFPB, has been actively seeking to shut down the agency since the Trump administration took office. 

“The upcoming supervision examination cycle is going to be fundamentally different from the prior ones,” the pledge begins. “The upcoming Supervision examination cycle is going to be fundamentally different from the prior ones under the former Director (Rohit) Chopra. For 2026 examinations, in line with the Memorandum on Supervision and Enforcement Priorities (April 2025) the Bureau will focus its supervision resources on pressing threats to consumers, particularly service members and their families, and veterans, and in the areas that are clearly within the Bureau’s statutory authority. The Bureau will also avoid, where possible, duplication of supervision, where States or other regulators are already doing that job.”

In the following paragraphs the pledge says examiners will provide greater clarity and will no longer ask for “expansive data sets.”

‘Weaponized Arm’

In a notice announcing the change, the CFPB described its own supervision department as “the weaponized arm” of the agency under the Biden administration and further claimed its exams had been carried out with “thuggery.”

The new pledge is mostly symbolic, as few examinations are actually occurring. The agency’s hundreds of examiners have been told to spend their time closing out all open matters and they are currently barred from initiating new cases.

In addition, as the CU Daily reported earlier, Vought has said the CFPB will no longer draw funds from the Federal Reserve beyond year-end.

Union Calls Statement ‘Creepy’

The CFPB’s staff union responded with a statement that denounced the pledge as “creepy” and “disrespectful.”

“Is this fan fiction I’m reading?” Cat Farman, a bureau employee and the president of the staff union, said in a statement. Adding that “Instead of traumatizing CFPB workers with his role-play fantasies, Vought should resign so we can finally do our jobs protecting Americans from Wall Street fraud again.”

FASB Publishes Update

Separately, the Financial Accounting Standards Board (FASB) has published an Accounting Standards Update (ASU) that it said improves the accounting for purchased loans.

“Since issuing the credit losses standard in 2016, the FASB has monitored and assisted stakeholders with implementation through the post-implementation review (PIR),” FASB said in a statement. “Through that process, stakeholders highlighted concerns about the accounting for acquired financial assets. Many noted that the existing guidance for acquired financial assets—specifically the distinction between purchased credit-deteriorated (PCD) and non-PCD assets—created unnecessary complexity and reduced comparability.”

The CFPB noted that under current GAAP, acquired financial assets are initially recorded at their amortized cost basis, with an allowance for expected credit losses (allowance) recognized separately. The process for PCD assets uses a “gross-up approach” to record the initial allowance through an adjustment to the initial amortized cost basis, while the initial allowance for non-PCD assets requires a direct charge to credit loss expense. 

‘Subjective & Inconsistent’

“This dual approach was seen as subjective, inconsistently applied, and resulted in double counting expected credit losses for non-PCD assets,” FASB said in a statement. “The new ASU addresses this by expanding the population of acquired financial assets accounted for using the gross-up approach. Acquired loans (excluding credit cards) are deemed purchased seasoned loans and accounted for using the gross-up approach upon acquisition if criteria established by the new guidance are met. This change aims to enhance comparability, consistency, and better reflect the economics of acquiring financial assets.”