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Elon Musk wants to 'delete' a federal agency designed to prevent another financial crisis

posted 3 days ago by TMC-4 (20152)
9 replies | jump to latest

https://www.datalounge.com/thread/35027227-elon-musk-wants-to-delete-a-federal-agency-designed-to-prevent-another-financial-crisis

In his efforts to cut government costs, Elon Musk has thrown his support behind slashing a federal office created in the wake of the Great Recession to regulate financial services used by Americans.

"Delete CFPB," Musk wrote on X early Wednesday of the Consumer Financial Protection Bureau. "There are too many duplicative regulatory agencies."

Musk, along with Vivek Ramaswamy, has been tasked with heading up the Trump-created Department of Government Efficiency, or DOGE, and finding ways to reduce spending and streamline bureaucracy within the federal government. The unofficial advisors have floated "deleting" entire agencies, laying off staff, and enforcing return-to-office mandates.

When reached for comment, a spokesperson for Trump's transition team said she had nothing to add to Musk's statement.

While it's unclear how DOGE and the incoming Trump Administration would abolish agencies, if it does, the CFPB could be on the chopping block. Here's a look at its purpose, employee makeup, and political controversies.

The CFPB was created by Congress as part of the 2010 Dodd-Frank Act. The law aimed to strengthen oversight of Wall Street after its risky mortgage lending practices caused the global financial crisis. The CFPB has a broad mandate to protect Americans from deceptive or abusive practices by US financial firms. The agency investigates consumer complaints related to credit cards, loans, bank accounts, and debt collection and enforces consumer protection laws.

Democratic Sen. Elizabeth Warren, a professor at Harvard Law School, originally proposed the agency in 2007. In 2010, President Barack Obama appointed Warren to head the CFPB's steering committee to help establish it.

"The time for hiding tricks and traps in the fine print is over," Warren said during a White House ceremony that year. "This new bureau is based on the simple idea that if the playing field is level and families can see what's going on, they will have better tools to make better choices."

As of March 2024, the CFPB employed just under 1,700 people, earning an average of about $184,000 a year, according to the Office of Personnel Management. The Bureau's 2024 financial report broke that workforce into six groups; about 43% of CFPB's employees work in the supervision and enforcement of financial institutions, 18% in operations supporting the Bureau's other initiatives, and 14% in research, monitoring, and regulations.

Since its founding, the CFPB has recouped $19.6 billion for consumers through direct compensation, canceled debt, and reduced loan principals.

The agency has also issued $5 billion in civil penalties against banks, credit unions, debt collectors, payday lenders, for-profit colleges, and other financial services companies. That money is deposited into a victims' relief fund, with nearly 200 million people eligible for relief.

https://archive.ph/xIYTF[

[–] strntz (12285) 3 days ago

"Duplicative"..

The U.S. gov has agencies watching agencies watching agencies..

[–] Sparky (2617) 3 days ago

Cool. The taxpayer dime is not specifically for employing people in the government for charity purposes, and if there are duplicative agencies then yes please cut them.

[–] fc31 (5418) 3 days ago

Has anyone even asked that which agency does the same thing?

Because Musk is politician now, that means his words can't be trusted.

[–] Sparky (2617) 3 days ago

Trust is a subjective thing. Are you suggesting Musk, now that he bears the moniker of "politician", has suddenly changed fundamentally and will break bad as a result? He involved himself in it to relieve the country of unneeded bureaucracy- a noble effort. You'll have to provide more in the way of evidence to sway me here.

[–] fc31 (5418) 2 days ago

Yeah, that is exactly what I am saying.

Since he started getting involved in politics, he really started misleading the public. Being a business man, credibility is important, their words are their bonds, so to speak.

Being politician, lying is very fundamental. Because they need to pretend doing good things while harming people's interests.

Here are some instances I believe he was lying: https://moviechat.org/nm1907769/Elon-Musk/6743cc220599ac4ffff66114/Remember-when-all-the-libs-loved-Elon?reply=6743d8c50599ac4ffff6614d

But back to the topic of CFPB, which stands for "Consumer Financial Protection Bureau", as the name suggested it is to protect consumers from financial institutions, result of Dodd–Frank Wall Street Reform and Consumer Protection Act: https://en.wikipedia.org/wiki/Dodd%E2%80%93Frank_Wall_Street_Reform_and_Consumer_Protection_Act

The main regulatory agencies related to financial institutions are:
Federal Deposit Insurance Corporation (FDIC): To insure people's money at banks, up to certain amount
U.S. Securities and Exchange Commission (SEC): To protect investors from market manipulation
Office of the Comptroller of the Currency (OCC): To regulate banks on currency issuance
Federal Reserve (the "Fed"): That needs no introduction
Securities Investor Protection Corporation (SIPC): The purpose of the SIPC is to expedite the recovery and return of missing customer cash and assets during the liquidation of a failed investment firm.

And finally Consumer Financial Protection Bureau, which is the first one actually mainly a blanket cover to protect consumers from all financial institutions, including bank and non-bank financial institutions.

Once a financial institution acquires $10 billion in assets, it falls under the guidance, rules, and regulations under the CFPB. The bank will then be known as a CFPB regulated bank. The CFPB will examine the institution for compliance with bank regulatory laws.

[–] fc31 (5418) 2 days ago

Quick research shows the main criticism of CFPB is it has too much power and increase regulatory cost of smaller institutions ($10 billion is clearly not a lot of money).

Republicans have been trying to repeal "Dodd–Frank Wall Street Reform and Consumer Protection Act" and limit the power of CFPB, which they succeeded to an extent, in 2017 through "The Financial Choice Act", in 2018 "Economic Growth, Regulatory Relief and Consumer Protection Act", when Trump was in power and they controlled both house and senate.

Numerous efforts from republicans to paralyse CFPB too, like trying to remove the director and nominate a republican acting director once Trump was in power.

Though they did not mention it was a duplication of other agencies, Musk is being novel.

There are too many duplicative regulatory agencies.

I don't think that is a lie, it just has nothing to do with CFPB. You don't see republicans attacking the similar agencies with such enthusiasm.

Did he notice something numerous republicans did not? Or is he simply lying and misleading the public?

That I leave to you.

[–] Sparky (2617) 2 days ago

I read your first link and I just don't see things the way you do. There are logical fallacies etc and I can't just convict the guy before he commits a misstep in his new capacity. Should we be vigilant and concerned? It's politics- of course we should, but coming from what's likely the worst administration in the history of the country this is a step in the right direction. If we want we can paint anyone as a monster and point to the evidence of their humanity but that's not enough to convince me that they are useless in every situation. It may be that we see things the same but one with a glass half full and the other half empty- both views add value.

Regarding the CFPB- we are privy to some information but I would bet not as much as Elon and crew. Whatever perceived shortcomings the remaining agencies may have they can be amended to cover for the lost ones. At some point we should recognize this and allow the people that were appointed by a legitimately elected president to do their job. Should they stray then I'll be with you when you jump on them.

Can you convincingly argue against their claims that the CFPB has too much power? Some bills are presented to congress that have a lot of 'fat' to them- extra bureaucracy, and many reject them due to the unwanted parts even though some parts might be beneficial. I believe that's the claim essentially of Musk et al. and being that I'm on the outside looking in while knowing there is much in the way of governmental waste well I'm just happy to see something finally being done about it all.

The days of operating as if the (R)s are the richest in the country/world and that they are the elites as a result really needs to be put to rest. At this point the party of the people seems to be the (R)s, at least that's what the people themselves said, overwhelmingly.

[–] fc31 (5418) 2 days ago

I am merely saying Musk was not being honest on "duplication".

As for whether CFPB should be cancelled or whether it was too powerful, I don't have enough enthusiasm to dig that deep.

I am Australian after all.

I am just very surprised some Americans are so eager to remove consumer protection. I think at the very least the answer should be to reform it.

Maybe your guys should ask Musk to remove FDA and FAA as well.

[–] HarlemEagle42 (17770) a day ago

Of course he does. Less oversight, the better for these Tech Broligarchs. Besides, Elon Musk won't be affected whatever financial catastrophe comes next if Trump makes good on his promises.