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With CFPB Purge, Trump Set to Deliver 'Corrupt Bounty' to Wall Street—and Elon Musk
"No move could more clearly show whose side Trump and Musk are on—and who they are willing to exploit," said Public Citizen co-president Robert Weissman.
Feb 14, 2025
The only U.S. agency tasked solely with protecting consumers from predatory corporations was hit particularly hard this week by the Trump administration's sweeping purge of the federal workforce, a gift to financial institutions that prey on working-class Americans with exorbitant fees and other abusive practices—and a potential boon for Elon Musk's personal business empire.
Employees at the Consumer Financial Protection Bureau (CFPB), currently run in an acting capacity by Project 2025 architect and White House budget chief Russell Vought, reportedly began receiving termination emails Tuesday night, with the agency's enforcement division bearing the brunt of the firings.
Contractors and workers who were hired within the past one or two years were the primary targets of the latest round of terminations, Wiredreported.
The outlet noted that the wave of terminations followed "a tumultuous few days at the CFPB" as Musk's lieutenants at the so-called Department of Government Efficiency( DOGE) "shut down a portion of the agency's homepage after a day of struggling to obtain access" to bureau systems last Friday.
That same night, Trump installed Vought at the helm of the CFPB, a move critics warned was a step toward Musk's stated goal of destroying the bureau.
Vought, a far-right ideologue, moved swiftly to halt virtually all of the agency's work, and even set up a "tip line" inviting corporations to file a report if they are "being pursued by CFPB enforcement or supervision staff, in violation of Acting Director Russ Vought's stand down order."
Robert Weissman of the consumer advocacy group Public Citizen said in a statement Thursday that "with their illegal and unconstitutional move to eliminate the CFPB, co-presidents Elon Musk and Donald Trump aim to deliver a corrupt bounty to Big Banks, predatory lenders, and other financial corporations."
"The CFPB has eliminated junk fees, capped credit card late charges, stopped the weaponization of medical debt, sued giant corporations, handled tens of thousands of individual complaints and provided relief to consumers of more than $21 billion—of course Big Banks, payday lenders, and financial scam artists want to eliminate it," Weissman added.
"This is a free pass for financial institutions to take advantage of consumers."
The Public Citizen co-president also put the spotlight on another potential motivation behind the Trump administration's zealous assault on the CFPB: Musk's foray into financial services, building off his existing control of X with a partnership with Visa that would allow peer-to-peer payments on the social media platform and beyond.
"Musk has a direct interest in eliminating the agency, which would be a regulator of X if it proceeds with well-reported plans to provide money transfer services," said Weissman. "No move could more clearly show whose side Trump and Musk are on—and who they are willing to exploit."
The Consumer Federation of America (CFA) noted in a statement Sunday that "if the CFPB can't do its job, no federal regulator will be able to prevent Elon Musk from building a financial services company."
More broadly, CFA pointed out that if the Trump administration shuts down or neuters the CFPB, no other agency will be able to assume the unique consumer protection role it played without a specific act of Congress.
"The CFPB was created after excessive risk-taking by financial companies, many of whom were not supervised by a federal regulator, crashed our economy," said Adam Rust, CFA's director of financial services. "It was created to protect people, not empower Elon Musk. If this administration chooses to cover its eyes from the facts, people will be put in harm’s way. This is a free pass for financial institutions to take advantage of consumers."
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Trump's Pick to Lead Gutted Consumer Agency Is 'Gift to Big Banks': Watchdog
Banks see Jonathan McKernan as "a rubber stamp for their interest in undoing the essential actions CFPB has taken to put more money in the pockets of consumers and protect them from predatory bank practices."
Feb 12, 2025
The government watchdog Accountable.US said Wednesday that Americans need look no further than comments from a top trade association for big banks to know that President Donald Trump's pick to lead the Consumer Financial Protection Bureau won't provide them with the financial help Trump promised during his campaign.
The Consumer Bankers Association (CBA), which represents Wall Street banks including Citibank and Barclays, said that if former Federal Deposit Insurance Corporation (FDIC) board member Jonathan McKernan is confirmed, it looks forward to "working with Mr. McKernan to undo many of the most recent actions" by the CFPB when it was run by Rohit Chopra, an appointee of former President Joe Biden.
Under Chopra's leadership, the CFPB unveiled regulations to protect consumers against overdraft fees and cap credit card late fees at $8 instead of $30, and expanded a measure to protect people from discrimination by corporations.
All of those actions have been subject to litigation by the CBA, noted Accountable.US.
"The actions the CBA seems to be so concerned about are the ones putting money back into the wallets of Americans, and protecting them from predatory bank practices," said the group.
At the FDIC, McKernan pushed for the quick approval of bank mergers and voted against a measure to increase scrutiny of mergers that create bankers with more than $100 billion.
"By firing career CFPB employees, ceasing the agency's operations, and nominating the big bank's de facto choice for CFPB director, Trump again reneges on his campaign promise to look out for working people and lower their costs."
McKernan was named as Chopra's successor as the CFPB—which is currently being temporarily led by Office of Management and Budget director Russell Vought—fired 70 probationary employees, including attorneys in the agency's enforcement division.
McKernan said after resigning from the FDIC this week that he hopes the agency reverses "the regulatory overreaches of the last few years."
Progressive advocates and Democratic lawmakers have condemned attacks on the CFPB by the Department of Government Efficiency( DOGE), which is being run by billionaire Trump backer Elon Musk. Sen. Elizabeth Warren (D-Mass.), who originally proposed the creation of the CFPB, is among those who have noted that the agency has returned more than $21 billion to working people across the U.S. who have been overcharged and scammed by banks and other financial companies.
"McKernan is a gift to big banks and special interests that would like nothing more than to see the CFPB gutted," said Accountable.US executive director Tony Carrk. "Banks see a McKernan CFPB as a rubber stamp for their interest in undoing the essential actions CFPB has taken to put more money in the pockets of consumers and protect them from predatory bank practices. By firing career CFPB employees, ceasing the agency's operations, and nominating the big bank's de facto choice for CFPB director, Trump again reneges on his campaign promise to look out for working people and lower their costs—all in service of himself and his billionaire donors."
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The 'More Sinister' Reason Behind Musk's Attack on Consumer Agency
Recent days have seen a full-frontal assault on the Consumer Financial Protection Bureau and Trump's favorite billionaire has much to gain personally if the agency no longer has the ability to operate effectively on behalf of the American people.
Feb 09, 2025
The Trump administration's multi-pronged attack on the CFPB continues.
President Donald Trump's new acting director of the Consumer Financial Protection Bureau, Russell Vought, told the agency to cease nearly all its operations in a series of orders on Saturday night and the move is not just a gift to the broader financial industry and large Wall Street banks, say critical observers, but also a major potential gift to billionaire Elon Musk, the world's wealthiest person, who has a major vested interest in the agency's demise.
Vought, the right-wing architect of the anti-government Project 2025 who also now heads the powerful Office of Management and Budget, confirmed Saturday night he had taken control of the agency in an email to staff that called on them to halt most of their work.
"Musk wants to use the government to put more in his pockets. This is a blatant conflict of interest." —Sen. Ed. Markey
According to reporting by NBC News, which obtained a copy of the email,
Employees were instructed to "cease all supervision and examination activity," "cease all stakeholder engagement," pause all pending investigations, not issue any public communications and pause "enforcement actions."
Vought also told employees not to "approve or issue any proposed or final rules or formal or informal guidance" and to "suspend the effective dates of all final rules that have been issued or published but that have not yet become effective," among other directives listed in the email.
He said in the email that the directives are effective immediately, unless he approves an exception or a certain activity is required by law.
The agency has been a target for Republicans for years and the party has contested in court its source of funding, which unlike most other agencies is funded by the Federal Reserve as opposed to regular appropriations by Congress. That mechanism, however, was established by Congress when the CFPB was created—an approach that was designed to shield it from political interference—and has withstood all legal challenges, including one before the U.S. Supreme Court last year.
Sen. Elizabeth Warren (D-Mass.), credited with bringing the CFPB to life, said the orders from Vought make clear the Trump administrations intentions.
"Vought is giving big banks and giant corporations the green light to scam families," Warren said Saturday. "The Consumer Financial Protection Bureau has returned over $21 billion to families cheated by Wall Street. Republicans have failed to gut it in Congress and in the courts. They will fail again."
Vought, in his online post, said he also informed Fed Chairman Jerome Powell on Saturday that the agency would be requesting $0 for the upcoming draw period, claiming that no additional funds were needed to fulfill its work.
"The Bureau's current balance of $711.6 million is in fact excessive in the current fiscal environment," Vought claimed. "This spigot, long contributing to CFPB's unaccountability, is now being turned off."
Critics point out that Musk, who has been appointed by Trump to head the Department of Government Efficiency( DOGE), has serious conflicts when it comes to the Trump administration's targeting of the CFPB.
DOGE is not a real department but has claimed sweeping authority to access the sensitive workings of federal agencies—triggering an avalanche of legal challenges as a result. In addition to Vought's statements, the previous CFPB acting director, Treasury Secretary Scott Bessent, last week issued an internal stop work order that was challenged by Democratic lawmakers.
On Friday, as Common Dreamsreported, Musk himself posted "CFPB RIP" on social media next to a picture of a gravestone and his detractors have argued his antagonism is not based solely on his ideological opposition to an agency that has returned over $20 billion to consumers over recent years from bad financial actors.
In an appearance Saturday on MSNBC, Lindsay Owens, executive director of the progressive advocacy group Groundwork Collective, explained that while Vought's targeting of CFPB can be explained by well-documented fealty to various corporate interests—and a desire "to destroy the government from the inside out"—Musk's motivations are likely "more sinister" and closer to home.
Elon Musk and Russ Vought have taken over the CFPB. That’s bad news for consumers.
Vought’s aim is to destroy govt from the inside out, and Musk's motive is more sinister. As he partners with Visa on a payment app, he has an interest in ensuring the CFPB doesn't get in his way. pic.twitter.com/C7FAFfG0xI
— Groundwork Collaborative (@Groundwork) February 8, 2025
Diminishing CFPB's ability to operate as well as getting a look at its trove of files, including the inner workings of those institutions it has been tasked with holding to account, said Owens, is a for Musk to "grease the skids for his new business interest."
"We know that Elon Musk is interested in starting his own payment app—he's partnered with Visa to do that," she explained, "and so he has a real interest in ensuring that the CFPB isn't blocking an effort like that."
Owens said that Musk's interest in the agency goes beyond that as well, because the CFPB has "trade secrets from enforcement actions against some of his likely future competitors."
On Friday, The American Prospect's David Dayen reported on the little-noticed Feb. 3 order that Bessent sent out to CFPB staffers which specifically halted new designation of non-bank entities, including "nondepository institutions," by the agency—a policy that could directly impact Musk's peer-to-peer payment venture he hopes to launch on X in partnership with Visa.
According to Dayen:
By stalling designation of nondepository institutions, Bessent ensures that X will not be designated for CFPB supervision, at least in the near term.
The more innocent explanation for the last-minute change is that Bessent was likely uninformed about what the CFPB does, and hastily added supervision later. But the inserted directive specifically bars designation of non-banks in the supervisory process, as a not-so-thinly-veiled shield for Big Tech payment app firms, and in particular the company run by special government employee Elon Musk.
Sen. Ed Markey (D-Mass.) expressed concerns along these grounds on Saturday night.
"Elon wants the CFPB gone so tech billionaires can profit from apps, like X, that offer bank-like services but don't follow financial laws that keep people’s money safe," charged Markey. "Musk wants to use the government to put more in his pockets. This is a blatant conflict of interest."
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