- The headquarters of the consumer financial protection office was closed on Sunday.
- Elon Musk, head of the Government Ministry, wants to eliminate the agency.
- The first CFPB director told Bi that Musk calls to dismantle the office are “completely contrary to ethics”.
The first director of the Consumer Financial Protection Bureau warned against the elimination of the independent supervisory agency, saying to Business Insider that it would remove the surveillance of financial companies and harm American consumers.
“We would be back in the Wild and Wild West for financial services that affect families in the whole country in terms of their terms on their credit cards, on their mortgages and other products. There would be no surveillance, “Richard Cordray, who led the CFBP for the first time when created in 2011 after the big recession to help prevent another financial crisis,, said bi.
“Companies could act in their own interests to the detriment of consumers,” he added. “It would be as if we said to a neighborhood:” Go ahead and apply your laws. We will withdraw the police. We will have no kind of application of the law. “” “
Sunday, the CFPB told its staff that its DC head office would be closed this Week and that they should work remotely, according to an agency COO email, Adam Martinez, It was seen by Bi.
On Monday, the new acting director of the CFPB, Russell Vought, told employees in an email seen by Bi to “withdraw from the work task”.
CFPB in flow
The CFPB had an upheaval of leadership since Trump took office.
While Martinez is associate director and head of the office of the office since February 2023, on February 1, Trump dismissed Rohit Chopra, the former director of the CFPB under President Joe Biden. The secretary of the Treasury, Scott Bessent, assumed the role of acting director of the agency until Vought, director of the management and budget office, took the role of the role on February 7.
Vought, the new acting director of the CFBP, was the author of the 2025 Mandate for Leadership project, a conservative roadmap for the first 180 days of the Trump administration which describes the political suggestions ranging from the dismantling of the Ministry of Interior Security to the Reduction of USAID operations – some – some of which have already been implemented by Trump’s White House.
The Playbook of the 2025 project calls for abolishing the CFPB, calling it an unconstitutional federal agency, “highly politicized, damaging and completely inexplicable”, recommending that the protection tasks of the office of the office are established under the Federal Commerce Commission .
Although the FTC has a consumer protection office, which has some overlap of the CFPB functions, the CFPB is the only federal office completely dedicated to consumer protection against anti -competitive, deceptive or unfair commercial practices in the service sector financiers.
In a Saturday article on X, Vought wrote that the “tap” for the financing of the agency “is now disabled”.
Elon Musk calls at the end of the CFPB
Vought’s decision comes after Elon Musk, the Dogee chief, has repeatedly called upon to eliminate the agency as part of his wider efforts to reduce federal expenses. “RIP CFPB,” he said on X.
Surveillance of the CFPB on the financial industry has included a legal action brought against Capital One concerning allegations according to which it illegally charged customers of more than $ 2 billion in interest, the return of money to loans of speakers of speakers Private lender students ship and the rules to compensate for the decorm costs and delete medical reports from credit reports.
Cordray said that CFPB Musk targeting could be a conflict of interest, since X plans to provide financial services on the platform.
Musk shared His ambitions to transform his social media company into an “all application”, including a digital portfolio and a payment system. On January 28, the CEO of X Linda Yaccarino announced a partnership with Visa which will allow money transfers between peers with what the company calls XMoney, Scheduled to make your debut later this year.
“It is a direct conflict of interest and completely contrary to ethics to make it judgments on the way in which the CFPB should exist which are not legislated by the Congress and which could serve its own financial interests at the expense of the across the country, “said Corday.
The representatives of the White House, Musk and CFPB did not respond to requests for comments from Business Insider.
Richard Cordray, former director of the Consumer Financial Protection Bureau, was also director of operating the Federal Student Aid Office. Ricky Carioti / The Washington Post via Getty Images
The Congress established the CFPB under the Dodd-Frank law and gave it the regulatory power to apply and develop existing laws, such as the consumer financial protection law, intended to protect consumers and guide financial companies.
The agency is funded by the Federal Reserve instead of the Congress credits process, which has led to criticism of many legislators who say that the Congress should supervise the funding of the CFPB.
“The CFPB was supposed to be bipartite – in a non -partisan way and in fact independent of politics – and intended to implement good policies to protect American consumers,” Bi Antoinette Schoar told Bi Bi Antoinete Schoar, professor of finance at MIT Sloan School of Management. SCHOAR was a member of the CFPB inaugural advisory council, lending its consumer financing expertise to help develop some of the office policies.
Musk vaguely recognized the CFPB contributions on Thursday, saying that “they did no good thing, but still have to go”.
Climbing attacks on the office
The owner X’s desire to close the CFPB also reflects the opposition of President Donald Trump to the consumer supervisory agency. During his first mandate, Trump took measures to reduce the influence of the CFPB and appointed Mick Mulvaney as an acting director.
Trump “spent four years in the oval office and, obviously, the CFPB changed direction during this period in a fairly spectacular way, was much more timid and not aggressive on behalf of consumers,” said Cordray. “But they applied the law.”
Under the new Trump administration, things are different: the Treasury Secretary, Scott Bessent, recently ordered the CFPB to end most of his work and break all public communications, showed an E- Mail obtained by Business Insider.
The National Treasury Employees Union, which represents the employees of the CFPB, brought an action against Vought on Sunday, urging a judge to prevent those responsible for access to employee information and to block Vought directives to “cease all activities supervision and exam “and” stop all the stakeholders engagement. “
Cordray said Musk did not have the power to “abolish” the consumer supervisory agency, claiming that “Congress is the country’s judicial authority” and that musk “is not the congress”.
Democratic senator Ed Markey of Massachusetts said in an article on X on Saturday that the role of Musk was a “blatant conflict of interest”.
“Elon wants the CFPB to be left so that technological billionaires can take advantage of applications, such as X, which offer banking services but do not follow the financial laws that ensure the safety of people’s money,” wrote the senator. “Musk wants to use the government to put more in its pockets.”
The White House recently designated Musk as an unpaid “special government employee”, which means that the billionaire is not subject to the rules of standard ethics and conflict of interest that official government employees generally meet.
One of the laws introduced within the framework of the 1989 reform ethics law stipulates that federal workers, including an SGE, are prohibited from making government decisions that have an impact on their financial interests.
However, the law has an exception which indicates that the official has appointed the SGE May grant an exemption if workers’ services are considered in the public interest and prevail over the potential conflict.
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