CFPB Lives On Despite Elon Musk’s Epitaph
Reports of the Consumer Financial Protection Bureau’s (CFPB) death may have been somewhat exaggerated.
Last month, the Trump administration shuttered the regulator’s offices and essentially shut down enforcement activity. “RIP CFPB” White House adviser Elon Musk wrote on social media.
But as The New York Times (NYT) reported Saturday (March 15), the CFPB has so far been hard to kill. Last week, the watchdog’s consumer response team was summoned back to the office to deal with a backlog of 16,000 complaints.
In addition, the report said, the CFPB’s Fair Lending Office is back to preparing its annual report to Congress. And the front page of the agency’s website, which showed a 404 error message beginning on the day Trump officials arrived at the bureau, is functioning once more.
The NYT argued the agency is becoming a “test case” for President Donald Trump’s ability to rein in government agencies. For the last few weeks, the bureau’s union and other groups have been battling the administration in court, arguing that only Congress has the authority to shut down the agency.
A consent order and series of short-term agreements have temporarily paused, and in some areas rolled back, what Judge Amy Berman Jackson of the U.S. District Court for the District of Columbia has called the White House’s “shoot first and ask questions later” strategy.
However, the report added, Jackson has not yet decided a larger question: Can Trump essentially end the CFPB by whittling down its operations, even if it technically remains open?
Although the duties that have been restored are only a small part of the CFPB’s workload, consumer advocates and agency staff view these court orders as important victories in the broader effort to prevent Mr. Trump’s shuttering of federal agencies, NYT said.
Meanwhile, PYMNTS wrote recently about efforts in Congress against two CFPB rules — one governing digital payments providers, the other focused on bank overdraft fees — thus opening up a new front against the embattled agency.
But the joint resolutions of disapproval, part of the Congressional Review Act’s “fast track” to reverse those rules, also set the stage for banks and Big Tech companies to innovate within payments, that report said.
“Nonbanks would move more fully to offer banking services; the banks would maintain at least some revenue streams that are used to fund other parts of the business, expanding credit and even basic financial services and beefing up fraud defenses,” PYMNTS wrote.
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