Billionaire Elon Musk, a key adviser to the incoming Trump administration, has set his sights on regulators that have often clashed with Silicon Valley investors seeking to enter the banking sector, calling for the abolition of the Consumer Financial Protection Bureau. I asked for it.
“Delete the CFPB. Too many overlapping regulators,” Tesla’s CEO posted on his social media platform X shortly after midnight Wednesday.
The comments came after Marc Andreessen, a well-known venture capitalist and Trump supporter, appeared on Joe Rogan’s podcast and said that the agency is “terrifying financial institutions” and “starting new companies trying to compete with big banks.” This comes in response to accusations that the government is trying to “block companies from entering the country.”
Under current Director Rohit Chopra, the CFPB has charged and fined a number of financial technology companies and other startups for defrauding customers, including those backed by Andreessen’s own company. This includes at least one company that does.
In 2021, regulators shut down online payday lender Lendup for “continuing to lie and illegally defraud customers.” The press release announcing the move specifically noted that the company is backed by “some of the biggest venture capital firms,” including Andreessen Horowitz, Kleiner Perkins, and Google Ventures.
In Logan’s appearance, Andreessen accused the CFPB of colluding to “stroke the bank accounts” of startup founders in disadvantaged industries such as cryptocurrencies by pressuring financial institutions to remove them as customers. It seems that he blamed it. The comments echo claims about federal regulators such as the Federal Deposit Insurance Corporation and have been circulating among crypto industry executives and conservatives, including members of Congress.
“This is a privatized sanctions regime that allows bureaucrats to do to the American people what we are doing to Iran, only to kick them out of the financial system.” said Andreessen. “This is what’s been happening with all the crypto entrepreneurs over the last four years. It’s also what’s happening with fintech entrepreneurs and people who are starting some kind of new banking service. Because I’m trying to protect it.”
However, the CFPB has recently taken a legal and public stance against debanking, the forced closure of bank accounts of organizations deemed to be legal or financial threats. For example, the agency argued in appeals court arguments in August that a federal judge’s decision in Texas limiting the power of financial institutions to police discrimination has prevented it from investigating banks for cutting off conservative Christian groups. I warned you that it would happen.
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