The Consumer Financial Protection Bureau, a government agency created to protect people from unfair financial practices, has been largely shut down by acting chief Russell Vought. Many crypto leaders, like Coinbase Global (COIN) CEO Brian Armstrong and Gemini CEO Tyler Winklevoss, are very happy about this decision.
Armstrong called the shutdown "100% the right call," labeling the CFPB an "activist organization that has done enormous harm to the country." He argued that fraud prevention should be handled by the Department of Justice and other financial regulators, not the CFPB. Winklevoss posted "CFPB Unplugged" alongside an image of a 404 error page from the agency's website.
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The shutdown comes after years of tension between the CFPB and financial institutions, including crypto exchanges. Coinbase, for example, has faced more CFPB complaints than any other U.S. crypto platform, with more than 7,747 grievances related to poor customer service, restricted accounts, and lost funds.
Vought, who also leads the Office of Management and Budget, told CFPB workers to stop all investigations. He also said the agency wouldn't ask for more funding because it already had $711.6 million, as Musk called for the return of that money to taxpayers.
While tech and crypto leaders are happy, others are upset. Some say shutting down the CFPB helps billionaires and leaves regular people at risk. BuccoCapital Bloke, a finance commentator, accused billionaires of dismantling the agency for personal gain, arguing that “It is not a coincidence that every single one of the tech billionaires trying to destroy the Consumer Financial Protection Bureau has a lot to gain from a less informed, less protected consumer,” he wrote on X.
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Sen. Chris Van Hollen (D-MD) vowed to fight the shutdown, emphasizing the agency's role in returning billions to consumers. The CFPB has recovered $21 billion for Americans over the years, addressing misconduct by major companies like Equifax EFX, Bank of America BAC, and Capital One COF.
The shutdown also benefits companies facing ongoing investigations, such as JPMorgan Chase JPM and Wells Fargo WFC, which were recently accused of failing to protect Zelle users from fraud. Other firms like Honda Finance and Jack Dorsey's Block (Cash App) were also under scrutiny for misleading practices.
Elon Musk, who has been at the forefrunt of cutting regulatory agencies since President Donald Trump took office again, celebrated the shutdown with a simple post: "CFPB RIP." Musk, who is developing a digital wallet through X, has a vested interest in reducing financial oversight. Economist Paul Krugman criticized the move, saying that the government now serves "financial predators."
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Critics like Salon’s Amanda Marcotte highlighted the cultural angle, accusing Musk and other tech billionaires of using sexism to undermine the CFPB by associating it with Sen. Elizabeth Warren (D-MA), its key architect. She warned that without the CFPB, scams will continue, and companies will be free to cheat people.
Former CFPB director Rohit Chopra said in an interview with PBS News Hour that “defunding this type of oversight is just begging for another financial crisis, and it’s a complete giveaway to many of these big tech companies who increasingly want to become a bank.”
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