February 4, 2025
Work has stopped at yet another government agency. And I know there’s so much happening all at once that it’s hard to keep track of it all…
But this – this move by the Trump administration is something that will absolutely impact you.
It has to do with the consumer financial protection bureau. In case you didn’t know – the CFPB is the only federal agency dedicated to looking out for all of us – the American consumers to protect us from financial abuse. The agency roots out unfair or deceptive practices by big corporations and enforces consumer financial laws passed by congress, monitors the markets, handles consumer complaints about misbehaving companies and supervises banks, lenders and other financial institutions.
Well – like several other agencies – the new treasury secretary Scott Bessant who was just named as acting director of CFPB has ordered a freeze on all work at the consumer financial protection bureau and has told staff to even stop enforcement actions, litigation and stop progress on finalized rules that have been approved but haven’t taken effect yet. Things I have reported about on this page, like that rule that caps overdraft fees at 5 bucks, and the other rule that prevents medical debt from being counted on your credit report. All of those things are now in jeopardy.
So – why this agency? Why is this happening?
Well – first – we don’t fully know yet what trump’s plans are for the CFPB but we have some clues from Republicans lawmakers. They want to “defund” it. Why? According to Senator Ted Cruz – he said in part — “the CFPB is an unelected, unaccountable bureaucratic agency that has imposed burdensome and harmful regulations on American businesses, banks, and credit unions.”
That’s somewhat true – the consumer financial protection bureau is a bureaucracy. But it is an independent bureaucracy created by a law passed by congress after the financial collapse in 2007 and 2008 to regulate financial products like mortgages and credit cards and to regulate banks ..that if you remember were handing out risky mortgages like candy which then nearly collapsed the entire u-s economy and ultimately forced the u-s government to bail out those banks to the tune of 700 billion dollars of taxpayer money.
Democrats say defunding the CFPB is just another example of Republicans catering to big businesses.
Now – all those things are accurate. The CFPB did do all those things and over the years – has held wall street and big corporations accountable. They’ve also been sued multiple times by those very same corporations for overstepping their authority. Sometimes the courts say CFPB is right. And sometimes the courts say the corporations are right. But what we know for sure is – Elon Musk – who is the richest man in the world that owns two extremely successful businesses in this country does not like CFPB…in fact back on November 26 tweeted this. Delete CFPB. There are too many duplicative regulatory agencies. Except – as I already reported CFPB is the only intendent agency dedicated solely to looking out for American consumers in the financial marketplace. And on top of that – it’s important for you to understand – a few days before musk put out that tweet the CFPB issued a new regulation that would have expanded their oversight of big tech companies that offer payments and digital wallet apps. That would have technically included oversight of musk’s company. So now – that regulation too is in jeopardy.
During President Trump’s first term he definitely eased up on enforcement of American companies…he believes in deregulation. He believes companies should just do what they do and the market will respond accordingly. Just last year a group appealed to the supreme court asking the court to find that the agency was unconstitutional because of its funding mechanism – which goes through the federal reserve. But in a 7 to 2 ruling written by justice Clarence Thomas the court said no– that funding structure is constitutional and CFPB can stay as is. Whether trump or congress is successful in eliminating CFPB this time around is unclear. But what is clear – right now – the CFPB is not doing it’s congressionally mandated job to protect American consumers.
Read Sen. Ted Cruz statement here.
Read Elon Musk’s tweet here.
Watch Sen. Elizabeth Warren’s statement here.
Read more from Treasury Secretary Bessent here.
