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By Martha Burk | We’re a month into Donald Trump and Elon Musk’s new slash-and-burn-the-government-down reign. One major target is the Consumer Financial Protection Bureau (CFPB), the government oversight agency charged with protecting consumers from unfair and unethical practices like predatory lending rates for everything from home mortgages to used cars, junk charges such as “resort” fees at fleabag hotels, and surprise “processing fees” or “closing fees” that weren’t disclosed upfront for loans.
These protections will no longer exist if Trump and his sidekick Musk have their way.
On Feb. 8, acting CFPB director Russell Vought sent an email ordering employees at the consumer watchdog to stop virtually all work—including fighting financial abuse. “‘Effective immediately,” he wrote, “unless expressly approved by the Acting Director or required by law, all employees, contractors and other personnel of the bureau shall … cease all supervision and examination activity.”
CFPB was the brainchild of Sen. Elizabeth Warren (D-Mass.) in the wake of the 2007-2008 housing bubble and financial crisis, which was caused in part by fraudulent mortgage lending. Former President Obama made the bureau a reality, and from the beginning it has attracted lawsuits from large banks and financial industry trade associations.
And it’s no mystery why: The CFPB has been effective. It has obtained nearly $20 billion in financial relief for U.S. consumers in the form of canceled debts, compensation and reduced loans since its founding.
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