Elon Killed the Consumer Bureau: But What Does That Mean?
It's not good, that's for sure
Elon Musk and the president he bought have taken an ax to the Consumer Financial Protection Bureau (CFPB). In part, this is because Elon wants to turn X into a payment app - and doesn’t want any pesky regulations preventing him from making more money.
And then, of course, there’s Trump. During his first term, his CFPB leadership gave payday lenders a free pass - yes, the same payday lenders that funneled millions to his campaign.
So, you have financial fraudster Trump and would-be fraudster (and world’s richest person) Elon tearing down the only guardrail that stands in the way of unmitigated pillaging of the least among us.
A recent report notes the potential harms:
Last week the administration ordered some 1,700 workers at the CFPB to stay home for the week as it continues to defang the agency. Adam Martinez, the bureau's chief operating officer, testified in federal court that the administration seeks to terminate most of its employees and directed the rest to stop enforcement.
While it was active over the past 14 years, the CFPB returned $21 billion to harmed consumers.
As the above report indicates:
Since 2021, the CFPB has led the charge on reducing junk fees and ordered medical debts to be removed from credit reports.
The agency has issued warnings against workplaces for surveilling workers and it engages in lawsuits on behalf of workers in cases of employers abusing workers' rights. In the final month under the Biden administration, it filed a lawsuit against Walmart and financial tech company Branch Messenger for forcing its drivers to use its deposit accounts.
Why does Musk care?
Elon Musk, special adviser to the president and owner of X, is leading the charge on downsizing the government through the newly formed Department of Government Efficiency. As the Trump administration has its sights on the CFPB, Musk is also developing a payment system to be integrated with X called X Money.
X Money is a partnership with Visa that would allow users to connect with their bank account to send and receive money.
Colorado News Service notes consumers will feel the loss of the CFPB.
Andrea Kuwik, policy and research director for the Bell Policy Center, said:
"There are a lot of folks that are struggling," Kuwik emphasized. "This entity has a proven track record of saving people money. Getting rid of that I think is counterproductive."
Christine Chen Zinner of Americans for Financial Reform added:
"We simply can't have a fair market unless there is a strong enforcement agency there to enforce those laws and protect people. The Trump administration is now giving all sorts of financial companies a green light to defraud and gouge their customers."
Amid the breakdown of key federal protections, some states are taking action:
New York’s Attorney General is pushing a sweeping update of that state’s consumer protection laws. In Tennessee, a Democratic lawmaker is pushing for medical debt reform.
Still, those state policies may provide uneven protection for consumers.
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With federal enforcement weakened - and state laws in the pipeline - what do you do if you have a complaint about a bad actor in the financial marketplace?
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.
We're still fighting! Defend CFPB!