DOGE Deals Devastating Blow to Consumer Protection
Oligarchy Defense Initiative stands strong in defense of Big Banks and payday predators
The reviews are in.
The DOGE Death Star is devastating.
The Oligarchy’s Empire is winning.
Big Time.
But what does that mean?
Sure, the Consumer Financial Protection Bureau (CFPB), now gone like some lonely planet in the way of Darth Musk’s plans, did great things. But, what now?
Well, advocates and observers from across the galaxy are weighing in.
From Illinois:
“These actions tell corporations and large financial institutions that nobody will be watching over their shoulders to make sure they don’t defraud consumers. With no federal watchdog in place to hold corporate America accountable, bad actors will go back to the days of ignoring consumer protection laws, including by price-gouging working families at a time when consumers across the political spectrum are concerned about the rising cost of living, or by causing another subprime credit crisis where taxpayers will have to bail out the lenders. And as always, those most affected will be lower-income Americans already struggling to make ends meet,” said Horacio Mendez, President & CEO of Woodstock Institute.
The New York Times explains a possible Musk motivation - but, it should be noted, the end of CFPB oversight would allow bad actors like Cash App to continue to avoid dealing with fraud on their platform.
Elon Musk, the world’s richest man, is widely known for amassing his fortune through Tesla, his electric car company, and SpaceX, the rocket ship company he founded.
But he started his career trying to disrupt consumer finance as a co-founder of a digital financial services company that later became PayPal. Now, he’s working to transform X.com, his social media platform, into a virtual wallet where people can send money to one another.
These types of digital payment platforms, which other tech companies like Apple and Meta also run, have come under intense scrutiny by the Consumer Financial Protection Bureau.
But that scrutiny is likely to ease, largely because of Mr. Musk, who has been empowered by the Trump administration to reshape federal agencies like the consumer bureau.
Bloomberg reports on cuts impacting the CFPB’s ability to enforce key financial protection laws:
The Consumer Financial Protection Bureau is canceling more than $100 million in vendor contracts as part of a cost-cutting maneuver by the agency’s new leadership, potentially putting its cybersecurity efforts at risk.
Any cuts to cybersecurity and software system contracts could threaten the security of highly confidential information provided by banks and other companies the CFPB supervises, as well as customer data and employee information.
Among the cuts were 102 vendor contracts for the CFPB’s enforcement division, 33 contracts linked to the director’s office, and 16 contracts for the agency’s supervision unit, according to a Tuesday evening email from CFPB acting Senior Procurement Executive Joshua Galicki obtained by Bloomberg Law.
And, it’s not just contracts - it’s staff:
The Consumer Financial Protection Bureau terminated around 70 probationary employees, including several enforcement division attorneys who were still in their probationary periods.
The enforcement attorneys, many of whom were working on cases that were active before acting Director Russell Vought effectively shut down the agency, were notified of their termination Tuesday night, according to a letter obtained by Bloomberg Law.
The Washington Post reiterates Musk’s keen interest in ending serious regulation of payment systems:
About a week before Elon Musk helped take over the nation’s leading consumer financial watchdog, his social media site, X, unfurled the details of a new payment system that may have drawn federal scrutiny — underscoring the complicated web of personal interests at stake as the world’s richest person advises President Donald Trump on a reconfiguration of the U.S. government.
And, Musk is partnering with Visa - a company under scrutiny by the DOJ for illegally monopolizing the payment space:
Oh, and the CFPB has been protecting student loan borrowers from illegal collection activity:
Since its creation, the CFPB has received more than 100,000 complaints from student loan borrowers, which have spurred federal and state regulator actions that have provided billions in relief for Americans with student debt. But Musk and Vought’s order directing the staff of the CFPB to stop working leaves borrowers to fend for themselves against companies that engage in abusive practices and extract billions in junk fees from everyday people
And lack of a CFPB will be felt by many across a range of industries:
The fallout of losing the CFPB’s protections and services will likely be severe. For nearly two decades, the agency has responded to consumer complaints about credit card bills, medical debt, vehicle loans, mortgages, online payment platforms, internet scams, and, ah, yes, virtual currencies, like fraudulent memecoins, which Trump and his family members and allies have spent the last several months shilling. The New York Times reported over the weekend that the recent crash of the $TRUMP coin caused more than 810,000 crypto wallets to lose $2 billion combined, while Trump and his family have concurrently raked in approximately $100 million in $TRUMP-related trading fees alone. In other words, Trump and Musk are teeing up their own supporters to get scammed by their banks and other institutions, or any MAGA World influencer who starts shilling a memecoin.
So. It’s bad.
But, what do you do if you have a complaint about a financial bad actor?
First, start with your state’s Attorney General.
Attorneys General typically have consumer protection divisions and can apply relevant state laws to your situation. Sometimes, if an AG asks, a company will answer.
Second, let your Member of Congress know. One, they may be able to assist with a resolution. But also, it is important for Congress to know their constituents value the work formerly performed by CFPB. Congress can rescue the consumer champion from the DOGE Death Star . . . if they want to.
Advocate Andy now has more than 200 subscribers - thank you! If you aren’t yet a subscriber, consider becoming a free or paid subscriber today. Either way, take a moment to also like and share this post. Together, we can hold the robber barons at bay - a task more important now than ever.
AdvocateAndy nails it: the CFPB regulates financial firms but Elon and the POTUS don't want any controls on their ability to make money--even if they plan to steal it or grift it from hard-working consumers who can't afford it. It's pathetic that the billionaire "co-president" is afraid of the tiny CFPB; now consumers will have no agency to protect them!