The Trump administration's work to shut down the Consumer Financial Protection Bureau could hit American consumers in the wallet. It could also spare Elon Musk's business interests from unwanted federal attention.
Just a few days before Musk's DOGE agents targeted the CFPB, his X platform launched a new payment system, X Money, that the agency "might have scrutinized," said The Washington Post. The bureau has "vast powers" to go after "unfair, deceptive and predatory corporate practices," and it has used those powers to closely examine banks and tech giants that have offered digital banking-style services.
His other business, Tesla, also has a financing arm that offers car loans. Musk's work to dismantle the CFPB is like a "bank robber trying to fire the cops and turn off the alarms before he strolls in the lobby," said Sen. Elizabeth Warren (D-Mass.).
'Harassed, hectored and micromanaged' One of the CFPB's "biggest wins over industry players" has been its work to limit bank overdraft fees, said NBC News. The revenue that American banks earned from such fees dropped by $6 billion over four years ending in 2023.
That number was poised to rise even more. The bureau in December issued a rule capping the penalty at $5, but its "fate is now uncertain." A separate rule, which would have slashed credit card late maximum fees from $32 to $8, now appears dead.
Conservatives have long objected to the agency's existence, saying its rulemaking process oversteps constitutional bounds. Businesses have "found themselves harassed, hectored and micromanaged" under the CFPB's supervision, said the National Review. The agency, in existence since 2011, is a "new, failed experiment" that has had a tendency toward ridiculous overreach.
'Consumer cop on the beat' The CFPB "touches all of our lives," said Lauren Saunders, of the National Consumer Law Center, to The Detroit Free Press. The agency was born in the aftermath of the 2008 financial crisis, given a mission of taking on "everything from rip-offs to tricks and traps in financial products," said Susan Tompor at the Free Press.
What became clear after the crisis is that consumers "don't stand a chance when there isn't a consumer cop on the beat," said Tompor. Now, consumer complaints will be dumped by the Trump administration into a "digital trash can." |