The Consumer Financial Protection Bureau’s headquarters closed on Sunday. The government’s Director of Efficiency wants to remove the agency. The first director of the CFPB told BI that the call to dismantle the Musk branch was “completely unethical.”
The first director of the Consumer Financial Protection Agency warned against the removal of independent watchdog agencies, informing business insiders that it would strip the financial company of surveillance and harm U.S. consumers.
“We have returned to Wild West, Wild West for financial services that affect families across the country regarding credit cards, mortgages and other products terms. “Richard Cordray is not a separate company. He told Bi that he first led the CFBP when it was founded in 2011 after the Great Recession to prevent the financial crisis.
“Companies can act for their own interests at the expense of consumers,” he added. “As if we were telling our neighbours, “Go ahead and enforce your laws. We’re going to withdraw the police. There’s no enforcement of the law.”
CFPB told staff on Sunday that DC headquarters would be closed this week, and that DC headquarters would be closed this week, according to an email from Adam Martinez seen by BI, and that it would need to work remotely. .
On Monday, CFPB’s new acting director, Russell Vought, told employees in an email seen by BI, “we’re going to stop from performing any working task.”
Flux’s CFPB
The CFPB has shaken its leadership since Trump took office.
Martinez has served as Associate Director and Chief Operating Officer of the Bureau from February 1 to February 1, 2023, but Trump has fired President Joe Biden’s former CFPB Director, Rohit Chopra. . Treasury Secretary Scott Becent took on the role of acting director for the agency until Vought, director of the Office of Management and Budget, took over the role on February 7th.
Vought, the new representative director of CFBP, outlines policy proposals from dismantling the Department of Homeland Security to scaling USAID operations, the Project 2025 Man, the Trump administration’s first 180-day conservative roadmap. He was the author of Dating Leadership. It has already been implemented by the Trump White House in the future.
The Project 2025 playbook calls for the CFPB to be abolished, unconstitutional, “a highly politicized, damaging, and incomprehensible federal agency,” instead, We recommend that the consumer protection obligation be developed under the Federal Trade Commission.
The FTC has a Consumer Protection Bureau, which overlaps to some extent with the CFPB’s obligations, but the CFPB protects consumers from anti-competitive, deceptive or unfair business practices in the financial services industry. It is the only federal agency that is completely dedicated to doing.
In X’s Saturday post, Vought wrote that the agency’s funding “spigot” is “now off.”
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Elon Musk is seeking CFPB end
Vought’s move comes after Doge head Elon Musk repeatedly called for the agency to be eliminated as part of his broader efforts to cut federal spending. “RIP CFPB,” he said at X.
CFPB’s financial industry oversight includes allegations that it illegally charged customers with more than $2 billion in interest, repatriation of money to student loan borrowers to return funds from private lender navient, and overdraft fees. It includes lawsuits filed against Capital1 over allegations that it would be suppressed and removed. Medical debt from credit report.
Cordray said CFPB’s Musk targeting could be a conflict of interest, given that X plans to provide financial services on its platform.
Musk shares his ambition to turn social media companies into “all apps” that include digital wallets and payment systems. On January 28th, X CEO Linda Yaccarino announced a partnership with Visa that will enable peer-to-peer remittances, which is set to debut later this year.
“It is a direct conflict of interest, and it is completely unethical for him to make a judgment about how the CFPB is not legislated by Congress, and at the expense of citizens around the country, he himself. may help with financial benefits,” Corday said.
Representatives from the White House, Musk, and CFPB did not respond to requests for comment from Business Insider.
Richard Cordray, former director of the Consumer Financial Protection Agency, served as Chief Operating Officer of the Federal Office of Student Aid. The Washington Post by Ricky Carioti/Getty Images
Congress will establish the CFPB under the Dodd-Frank Act, giving regulators that will enforce and expand existing laws, such as the Consumer Financial Protection Act, which aims to protect consumers and guide financial companies. I did.
The agency is funded by the Federal Reserve instead of the Congressional budget process, leading to criticism from many lawmakers who say Congress should oversee CFPB funding.
“The CFPB is bipartisan, in some sense nonpartisan, and is actually assumed to be independent of politics, and is intended to implement good policies to protect American consumers. “We’ve done this,” Antoinette Schoar, a professor of finance at the MIT Sloan School of Management School, told BI. Schoar was the first member of the CFPB’s advisory board and lended out his consumer finance expertise to help develop the department’s policies.
Musk vaguely admitted the CFPB contribution on Thursday, saying, “They did well above zero, but they still need to go.”
Escalation of attacks on the station
The X owners’ desire to shut down the CFPB reflects President Donald Trump’s opposition to consumer watchdog agency. During his first term, Trump took steps to reduce the impact of the CFPB and appointed Mick Mulbany as acting superintendent.
Trump “had four years in an oval office, and apparently the CFPB has changed direction quite dramatically, is much more ti-sick and not offensive on behalf of the consumer,” Cordray said. . “But they enacted the law.”
Under the new Trump administration, things will be different. Treasury Secretary Scott Bescent recently ordered the CFPB to suspend most of its work and suspend all public communications.
The National Treasury Employees Union, representing CFPB employees, filed a lawsuit against Vought on Sunday, blocking Doge officials from accessing employee information and blocking Vought’s orders, and “all” Stop supervision and exam activities” and “urge all stakeholders to be stopped. Engagement.”
Coderay said masks have no authority to “delete” consumer watchdog agency, and that “Congress is the power of the legal powers of the country,” while Musk said “not the Parliament.”
Massachusetts Democratic Sen. Ed Markey said in a post on X on Saturday that Massachusetts’ role was a “blatant conflict of interest.”
“Elon has no CFPB, so tech billionaires can benefit from apps like X that offer bank-like services but don’t follow the financial laws that keep people’s money safe.” The senator wrote. “We want to use the government to put more masks in our pockets.”
The White House recently designated the mask as an unpaid “special government employee.” In other words, billionaires are not subject to the standard ethics and profit conflict rules that official government officials usually encounter.
One of the laws introduced as part of the Ethics Reform Act of 1989 provides that federal workers, including SGE, are prohibited from making government decisions that affect their economic interests. Masu.
However, the law has the exception that the formula appointing an SGE can grant exemptions if the services of workers are deemed to be in the public interest and outweighs the potential dispute.
