FOR IMMEDIATE RELEASE: Feb. 9, 2025
CONTACT: Carter Dougherty, carter@ourfinancialsecurity.org
Suspension of CFPB Work Leaves Financial Companies Free to Rip People Off
Stopping supervision of megabanks and fintechs tilts playing field against community banks
The shutdown of all supervision and oversight by the Consumer Financial Protection Bureau will allow all manner of financial companies, from Wall Street megabanks to payday lenders to financial technology firms to credit bureaus to rip people off and mistreat their customers at will.
In his first 24 hours since becoming acting CFPB director, Russell Vought has given Elon Musk’s team a free hand to access sensitive data and begin to tear apart the CFPB, an agency whose mission is immensely popular with the public and has saved families $21 billion over the past 14 years. Vought has now made blatantly illegal moves to cut off its funding and cease complying with the statutory requirements under the 2010 Dodd-Frank law to enforce consumer protection laws.
Musk will also personally benefit from this shutdown as he launches a payments system on his social media platform X in partnership with Visa. The CFPB has imposed safeguards to protect people’s privacy, remedy errors, and combat fraud on digital payment platforms like the one X is launching. It has also taken steps to supervise these platforms.
“The CFPB was created to keep a watchful eye on the consumer financial services marketplace. Vought is now giving all sorts of financial companies a green light to defraud and gouge their customers,” said Christine Chen Zinner, consumer policy counsel at Americans for Financial Reform Education Fund. “Every corporate bad actor in finance now has a free pass from the Trump administration to make life more expensive and less fair for families all over the country.”
The suspension of supervision is also a giant gift to the largest banks, such as JPMorgan Chase, Bank of America, and Wells Fargo, which will see supervision and enforcement of consumer protection rules evaporate. Because the CFPB only supervises banks with over $10 billion in assets, those megabanks will get a free hand, while much smaller community banks would continue to face oversight from state regulators and the FDIC.
“Stopping supervisory work by the CFPB will allow the more powerful and sophisticated Wall Street banks to swindle their more numerous customers without fear of enforcement,” said Patrick Woodall, managing director for policy at AFREF. “Vought’s action also shields Elon Musk’s latest venture from scrutiny, allowing him to launch his new payment platform and treat users any way he wants without any oversight from the CFPB.”
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