The forthcoming Department of Government Efficiency (DOGE) has a new target. Elon Musk is calling to “delete CFPB,” the Consumer Financial Protection Bureau. The agency has long been in conservatives’ crosshairs.
Musk’s X post came after tech billionaire Marc Andreessen blasted the agency on Joe Rogan’s podcast.
“It’s sort of Elizabeth Warren’s personal agency that she gets to control, and it’s an independent agency that just gets to run and do whatever it wants,” Andreessen said of CFPB, adding that its core function is to “terrorize financial institutions.”
Musk’s DOGE co-lead, Vivek Ramaswamy, doubled down in an X post of his own.
“CFPB started under Elizabeth Warren less than 20 years ago, and consumers are no better off for its existence. Quite the contrary, actually,” he wrote.
What is CFPB?
The CFPB was born out of the 2008 financial crisis. It’s the brainchild of then-future Sen. Elizabeth Warren, D-Mass. In 2010, Congress and then-President Barack Obama signed the Dodd-Frank Act, which created the bureau. It consolidated consumer financial protection authority from seven different agencies under one roof.
The bureau has had some blockbuster wins:
- In 2022, it ordered Wells Fargo to pay $3.7 billion over charging illegal fees and interest on auto and mortgage loans, wrongfully repossessing customers’ cars and more.
- This year, it banned Navient from federal student loan servicing and ordered the company to pay $100 million to borrowers who were wrongly steered into forbearance or had payments miscounted.
- In total, CFPB enforcement over the years has led to nearly $20 billion in consumer relief and $5 billion in fines.
CFPB has an annual budget of less than $1 billion per year.
Targeting CFPB
When it comes to trimming $2 trillion off the books, CFPB is not the biggest whale for DOGE. But the agency has repeatedly raised the ire of conservatives and the banking industry.
The CFPB is an independent federal agency that gets its funding from the Federal Reserve Board. Critics have long argued that it’s too powerful, unaccountable and burdensome.
There have been many legal challenges to CFPB, including this year, when the Supreme Court rejected a conservative-led challenge to the bureau’s funding. Voting 7-2, the court overruled a Fifth Circuit decision that CFPB’s funding structure was unconstitutional because it bypassed Congress, violating the separation of powers. The case stemmed from a lawsuit by the payday lending industry.
Had the Supreme Court ruled the other way, it could have evaporated the CFPB and thrown into question every rule ever made by the agency.
The Supreme Court loss has not stopped conservatives from continuing to challenge the bureau. Project 2025 calls for CFPB to be abolished, saying in part, “…the agency has been assailed by critics as a shakedown mechanism to provide unaccountable funding to leftist nonprofits politically aligned with those who spearheaded its creation.”
Abolition aside, with Republicans set to control Congress and the White House next year, the GOP is looking at ways to dramatically change CFPB’s powers.
Meanwhile, with the changing of the guard coming soon, the CFPB under the Biden administration is reportedly racing to finalize rules before January 2025. That includes a ban on including medical debt on credit reports.
