Elon Musk Targetting CFPB Sparks Controversy
Another target has been added to Elon Musk’s itinerary, the Consumer Financial Protection Bureau (CFPB) with the representatives of Musk’s cost-cutting team entering the organization. The agency was already on the hit list of Donald Trump as per the statements from three close observers.
The Musk team has gained access to internal systems that handle the human resources, procurement, and finance systems.
A source, who is familiar with the group’s actions has been held up for speaking publicly about it and as per him, career staff has been locked out while taking control of the bureau’s social media accounts.
Alarmed employees worried about the DOGE team___ Chris Young, Nikhil Rajpal and Gavin Kliger___ getting hold of protected personal information, were desperate upon the forced entry.
The CFPB workers union, NTEU 335 said in a statement that Musk’s team entering the agency was “a clear attempt to attack union workers and defang the only agency that checks the greed of payment providers, as well as auto lenders like Tesla.” Tesla is led by its CEO, Musk apart from running five other companies.
The bureau, according to the union collects and maintains vast amounts of sensitive financial information about individuals and businesses, including banks and other financial institutions. The union statement is apprehensive about, “such legally-protected, sensitive data of businesses and individuals will be exposed and used in inappropriate ways.”
On Twitter, Rep.Brendan Boyle (D-Pa.) posted, “The Consumer Financial Protection Bureau has saved American consumers over $20 billion. No wonder the billionaires running the Trump White House want to eliminate it.”
The 2008 financial crisis saw the bureau being created and returning more than $17 billion to consumers throughout the years that followed it. The financial firms who had usurped the said amount of the consumers were asked to compensate them.
As suggested by the then-law professor Elizabeth Warren, CFPB was finally established in 2010 on the basis of the Dodd-Frank Law which greatly changed the financial systems in turn, checking the recession scenario.
Many Govt. departments like the Education Department and the U.S. Agency for International Development are under the scanner to be dismantled by Musk. As reported by WIRED, the speculations are gaining round due to DOGE’s actions against the bureau.
Already, USAID closure has been put under a temporary pause by a federal judge.
Meanwhile, Treasury Secretary Scott Bessent has been approved to be the CFPB acting director, after present head Rohit Chopra was dismissed from the service. A DOGE representative and the CFPB were unavailable for any response.
The NTEU 335 union said that Treasury Secretary and Acting CFPB Director Scott Bessent, “allows Musk’s operatives to bypass cybersecurity policies and wreak havoc with their amateur code skills inside CFPB’s once-secure systems.” Bessent has directed the agency staff to stop all work related to rulemaking and public communications.
An email shared with NPR, from him instructed them to avoid settling any enforcement actions. It is a fact that Bessent had already begun to introduce a wide array of changes since his appointment as head of the agency, pleasing the Republicans greatly.
They stated, “A transformation in leadership at the CFPB is overdue, and we are eager for positive, lasting change at the CFPB.” The groundwork done by Bessent is to facilitate the entry of the next CFPB chief, who now will have the freedom to have his way. In any case, the director decides the level of funding to be drawn from the Federal Reserve.
Republicans, Silicon Valley and the banking sector have long been among the critics of CFPB. They have always been at the forefront to decry the agency for its investigations, enforcement actions and fines in consumer protection cases.
Echoing the same, a GOP lobbyist who represents clients in the finance industry, Josh Novotney said, “There’s been a lot of thought given to how to alter its direction permanently. It is an agency that is seen as the most political and ideological and least balanced out of any of the regulatory ones.”
While some of the House Democrats revolted against DOGE’S forced entry into the agency, on Friday an error message was displayed on the CFPB page. Senior legislative strategist at the progressive group P Street says, “There are enormous conflicts of interest at play here.”
Trump’s closest allies — billionaires in Silicon Valley and on Wall Street who spent millions getting Donald Trump elected — want to see the CFPB gone, ensuring there’s no one standing in the way when they rip people off and cheat them.”
Companies like Wells Fargo, Capital One, Goldman and Sachs, Facebook, Instagram, Apple and Google Pay have had a wide range of issues with the CFPB. In 2022 while Wells Fargo in an agreement with the agency agreed to pay the customers a staggering $3.7 billion settlement over their auto and mortgage loans, Capital One was sued over the latter’s non-payment of savings account interest rate which it had advertised earlier.
Likewise, Goldman and Sachs was asked by the bureau to pay $89 million in penalties for the mismanagement of the customers’ undecided transactions. In total, about $17 billion which was the money squandered by the companies, has been returned by the bureau to the consumers since its inception in 2008.
CFPB is also proposing new rules to overlook digital payment platforms like Apple and Google Pay as well as Musk’s ‘X Money’ payment system, with which he has collaborated with Visa. The platform’s financial services will come under the radar of the CFPB. This is why, Musk has been after the agency right from the beginning as is evident from his writings on X like, “Delete CFPB, CFPB RIP” etc.
Billionaires like prominent venture capitalist Marc Andreessen blames the bureau for “terrorizing financial institutions,” and wishes it to be closed. Andreesen is a Trump supporter who along with Musk is trying to reshape the federal government and the embedment of CFPB by the DOGE personnel is one of those steps.
