President Donald Trump has said it more than once—the Consumer Financial Protection Bureau is no more. Calling it “the ultra-left CFPB,” Trump said he moved to shut down the agency after receiving calls from bankers and loan officers who were “almost crying” over its regulations.
Trump: CFPB Was Hurting Banks
Speaking at the Conservative Political Action Conference on Feb. 22, Trump described the CFPB as a "terrible" agency that "destroyed" small banks and businesses. He blamed Sen. Elizabeth Warren (D-MA), who helped create the agency after the 2008 financial crisis, saying she used it to push a "woke radicalism" agenda.
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"They established it—it was established by Elizabeth Pocahontas Warren," Trump said, mocking Warren's past claims of Native American ancestry. "At the ultra-left CFPB, which was terrible, so many people have been hurt by that. I used to get calls from lending officers from owners of small banks, and they were almost crying. What they did to those people; they destroyed them and put them out of business."
The CFPB was originally designed to protect consumers from predatory lending practices, like unfair bank overdraft fees and shady mortgage deals. But Trump argued that it overregulated banks and financial institutions, making it harder for businesses to operate.
Elon Musk and DOGE Take Over
The agency's closure was fast-tracked by Elon Musk, who effectively heads the Department of Government Efficiency, an office created to shrink the federal government. Musk announced the shutdown in a Feb. 7 post on X, writing, "CFPB RIP," alongside a tombstone emoji.
A team of Musk's DOGE workers was given access to CFPB's data systems, which hold sensitive financial records. Former CFPB attorney Hanna Hickman told "60 Minutes," “We heard from our colleagues that they’re camped out in the basement. And they’ve got papers up on the windows to keep people from looking in. And they’ve been accessing data, certainly."
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Concerns Over Data and Conflicts of Interest
Critics, including Warren and former CFPB employees, have raised alarms about what Musk and his team might do with the bureau's data. The CFPB was actively investigating digital banking and fintech companies before its shutdown—including firms like Venmo, Cash App, and Google Pay.
This is particularly concerning, critics say, because Musk is preparing to launch a digital payment platform called X Money. Does Musk stand to gain something from these files? “Absolutely," Hickman said. "He is potentially able to gain access to files of his competitors."
For his part, Musk denied any wrongdoing. "I don't know of a case where an organization has been more transparent than DOGE," he told reporters in the Oval Office earlier this month. "You can see: am I doing something that benefits one of my companies or not? It's totally obvious."
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Court Battles and Consumer Protections on Hold
Meanwhile, the shutdown of the CFPB has frozen many consumer protection rules that were set to take effect. Some of these include:
- Capping credit card late fees at $8 (down from $30)
- Limiting overdraft fees to $5 (down from $27)
- Removing medical debt from credit reports
- Increasing regulation of digital payment apps
- Giving consumers more control over their personal financial data
Trump has nominated Jonathan McKernan, a former Federal Deposit Insurance Corporation board member, as the new CFPB director. But with the agency effectively shut down, it's unclear what role—if any—it will have moving forward.
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