Update 828 — Musk’s “Delete CFPB” Tweet:
Defending Against the Uninformed Attack
A set of online comments last week by business figures Mark Andreessen and the heads of the “Department of Government Efficiency,” Vivek Ramaswamy and Elon Musk laid bare the reflexive and uninformed hostility of leading industry supporters of Donald Trump to a government body that has more than proven its value to American consumers, the Consumer Financial Protection Bureau (CFPB).
Below, we set the record straight about the agency, rebut the attacks launched against it last week, and warn about the forms and potential consequences of further attacks. CFPB opponents have failed in court to challenge its funding structure and rule-making, but Trumpian unilateralists seeking draconian ways to slash government now have their eyes on the agency.
Best,
Dana
Financial firms, their Wall Street backers, and their Republican allies in Congress have long attacked the Consumer Financial Protection Bureau (CFPB), the government agency tasked with protecting financial consumers from unfair, deceptive, and abusive practices. Now Elon Musk has called for the Bureau to be eliminated and joined Vivek Ramaswamy – his co-lead of the so-called “Department of Government Efficiency” – in claiming that consumers are no better for its existence.
Last week, after venture capitalist Marc Andreessen spread wildly false and unsubstantiated attacks against the CFPB on a podcast, Musk responded to a reporter correcting one of Andreessen’s assertions by saying, “Delete CFPB. There are too many duplicative regulatory agencies.” Later that day, in a post that X’s Community Notes feature has since corrected, Ramaswamy said “CFPB started under Elizabeth Warren less than 20 years ago, and consumers are no better off for its existence. Quite the contrary, actually.” Musk replied, “Exactly.”
Musk and Ramaswamy’s targeting of the agency should worry every American as the pair expects to recommend some agencies be massively reduced or outright eliminated in their plan to restructure the American government. Their apparent embrace of vested interests, like themselves, their spreading of misinformation and engagement in bad faith arguments, their support of the elimination of agencies that look out for everyday Americans – these together seek to pave a political path for crucial public institutions to be gutted, supposedly in the name of “efficiency.” Eliminating the CFPB would be a prime example.
In Fact: The CFPB is Not Duplicative, But Necessary
The Consumer Financial Protection Bureau (CFPB) was created as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 in response to the Global Financial Crisis of 2008 which cost Americans trillions of dollars and millions of jobs.
Before the creation of the CFPB, consumers lacked sufficient protections against harmful practices such as misleading mortgage terms, excessive fees, and predatory lending. There was no single federal agency focused on financial consumer protection. During that period, various agencies were responsible for regulating different aspects of consumer finance but all of these agencies had other objectives they considered central to their missions and, as a result, failed to prioritize consumer protection. These include:
- the Federal Reserve
- the Office of the Comptroller of the Currency (OCC)
- the National Credit Union Administration (NCUA)
- the Securities and Exchange Commission (SEC)
- the Federal Trade Commission (FTC)
These agencies were not in a position to fulfill a consumer protection role. The CFPB streamlined, consolidated, and expanded enforcement and oversight of consumer protection after years of financial deregulation and predatory practices that went unchecked.
Eliminating the agency would mean erasing lessons learned in the aftermath of the 2008 financial crisis and hard-fought victories won by policymakers and advocates determined to prevent a similar financial crisis in the future.
The CFPB Has Fought and Won for American Consumers
Over its 13 years of existence, the Bureau’s enforcement actions have resulted in $19.6 billion in relief for 195 million consumers through monetary compensation, principal reductions, canceled debts, and other forms of consumer relief.
The CFPB has also held firms across the financial industry accountable for defrauding consumers by getting restitution for them. This action has targeted the nation’s largest banks. In 2023, after Bank of America charged consumers illegal fees, withheld credit card rewards, and opened fake accounts, the CFPB ordered the bank to pay more than $100 million to harmed consumers and $150 million in penalties. The agency’s action has also focused on predatory payday lenders like LendUp Loans, a three-time repeat offender that Marc Andreessen invested in. In 2021, LendUp Loans agreed to halt making any new loans after the CFPB sued the company in 2016, 2020 and 2021 for allegedly engaging in illegal and deceptive marketing.
Additionally, the CFPB has worked to propose and finalize new rules to protect consumers. In January, the agency proposed a rule to rein in excessive overdraft fees charged by the nation’s largest banks. The CFPB estimates that the proposed rule could save consumers $3.5 billion or more in fees per year, translating to potential savings of $150 for households that pay overdraft fees. In March, the agency also finalized a rule to cap credit card late fees at $8 per month, down from $32 per month, closing a loophole exploited by large card issuers. The CFPB estimates that American families would save more than $10 billion in late fees annually if the rule is implemented.
The CFPB is Broadly Popular Among Voters
The CFPB’s work to protect consumers and their financial well-being has made the agency broadly popular among voters. A July 2024 poll conducted by a bipartisan team from Lake Research Partners and Chesapeake Beach Consulting found that 81 percent of voters across the political spectrum backed the CFPB’s mission after hearing a brief description of the Bureau, including 88 percent of Democrats, 77 percent of Republicans, and 69 percent of independents.
CFPB Favorability by Party
Source: Americans for Financial Reform
In the same poll, voters also overwhelmingly believed that it is important to regulate financial services and products to ensure they are fair for consumers and overwhelmingly supported the CFPB’s recent work to limit credit card late fees, reduce overdraft charges, and prohibit medical debt from appearing on credit reports.
The poll findings are consistent with over a decade of opinion research demonstrating enduring public support for the Bureau and its work.
A Look Ahead
Since its inception, the CFPB has faced challenges from the industry it oversees and their Republican allies and these will undoubtedly persist as the Republican trifecta enters office next year.
President-elect Trump is reportedly considering appointing a CFPB director who would tamp down the agency’s regulatory agenda. Such a director could also seek to strangle the agency from within by, for example, requesting zero funding for the agency as Mick Mulvaney, the acting director of the CFPB, did during Trump’s first term. Congressional Republicans may resurrect legislative threats to the Bureau’s leadership and funding structures introduced earlier this Congress and try to block rules finalized by the agency in the coming weeks.
Congressional Democrats must be prepared to defend the CFPB against incoming attacks, reinforce their commitment to protect the CFPB and oppose legislative attacks against the agency and its work. With the agency likely to come under new and novel attacks like the ones seen last week, a robust defense of its critical work is more important now than ever.