The Trump administration has taken unprecedented steps against the Consumer Financial Protection Bureau (CFPB), effectively shutting down the agency tasked with protecting consumers from financial abuses. Acting director Russell Vought ordered all employees to cease work, citing the CFPB's alleged 'wokeness' and 'weaponization' against certain industries. This move follows a pattern of hostility towards the CFPB by Republicans and conservative groups, who view the agency as an overreaching force targeting financial institutions.
Back in 2018, during Donald Trump's first term, his appointed director of the Consumer Financial Protection Bureau ( CFPB ), Mick Mulvaney, gleefully described his plan to emasculate the bureau by bringing the financial firms victimizing Americans under its protective umbrella. 'We are there to help protect people who use credit cards,” he told an appreciative audience of credit union executives. “We’re also there to help and protect the people who provide that credit….
We are there to help people who borrow money; but we’re mindful and respectful of the people who provide those loans.” Mulvaney couldn't resist taking a swipe at Sen. Elizabeth Warren (D-Mass.), who had conceived of the CFPB and acted to create it as part of the Dodd-Frank financial reform act of 2010. 'I am the acting director of the CFPB,”he said, “something that’s apparently keeping Elizabeth Warren up late at night, which doesn’t bother me at all.” Mulvaney isn't part of the current Trump administration, but his successors as the Trump-appointed overseer of the CFPB have taken his approach much further. Rather than direct the CFPB staff to be more solicitous of the financial services firms that the bureau is charged with regulating, they've completely shut the bureau down. Acting CFPB director Russell Vought, in an email reportedly issued Monday, instructed all the bureau's employees to 'stand down from performing any work task.' The bureau's Washington headquarters building has been closed and will remain shuttered at least until Friday. Vought was an author of the right-wing Project 2025 blueprint for an incoming Trump administration. Anyone clicking on the bureau's home page as recently as Monday was greeted by a messaage indicating the page couldn't be found, along with the image of an electric plug dangling uselessly next to a power outlet. Vought's order puts on indefinite hold all the CFPB's enforcement and investigative activities. It reflects what has emerged as the Trump administration's approach to governing, which has instilled chaos in the workings of the U.S. Agency for International Development and other federal agencies whose funding has been frozen. Rather than trying to redefine an agency's purposes and goals, it's so much easier to simply stop them from working at all. That brings us to the reasons for Republican and conservative hostility toward the CFPB. 'The CFPB targets financial predators, lawbreakers and crooks,' says Dennis Kelleher, co-founder and chief executive of the financial services watchdog Better Markets. 'That's why Wall Street and its allies in the Trump administration and the Republicans on Capitol Hill have been fighting the CFPB from the beginning. It's powerful and it's effective, and it's forced them to give back the money they rip off.' 'Financial rip-offs don't just rip off Democrats or Republicans,' Kelleher told me. 'They rip off anybody and everybody.' Every CFPB case is directed at helping 'hard-working Main Street American victims. They're the ones who need a Consumer Financial Protection Bureau to stand next to them.' Curiously, the Trump White House seems to think that protecting Main Street Americans from rip-offs is an argument for the bureau's extinction. In defending its shutdown, the White House issued a release Monday headlined, 'CFPB Isn’t a Wall Street Regulator, It’s a Main Street Regulator.' Most people might regard that as a compliment rather than a criticism. The release called the bureau 'another woke, weaponized arm of the bureaucracy that leverages its power against certain industries and individuals disfavored by so-called 'elites,'' though it didn't specify those industries or individuals or the 'elites' that supposedly have it out for them. The White House didn't respond to my request for details. One can put numbers to the bureau's 'wokeness' and 'weaponization.' According to its latest financial report, from its inception in 2012 through Jan. 30, the bureau had returned $19.7 billion to 195 million people, via actual compensation from financial firms, reductions in loan principal and canceled debts. It also collected $5 billion in civil penalties. The bureau's partisan critics haven't effectively challenged these figures. Rather, they've ginned up accusations that the bureau had used legal settlements to accumulate a 'slush fund' — meaning its Civil Penalty Fund — to 'provide unaccountable funding to leftist nonprofits.' That language comes from the Project 2025 chapter on the CFPB. As it happens, the project's footnoted source for the charge, a 2015 article from the conservative Investor's Business Daily, appeared before the penalty fund had actually come into existence and obviously before it had disbursed a dime. Project 2025 noted that the Civil Penalty Fund was created both to provide money to compensate victims of financial rip-offs and to fund programs in financial literacy and consumer educatio
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