May I have your attention, please?
I know you’re upset about the price of eggs. The stock market is showing signs of chaos fatigue, pulling down the returns you expect and hope to be there for your retirement. Consumers are concerned that President Donald Trump’s tariffs on Canada, China and Mexico will raise prices.
So you might not know that Trump and Elon Musk are working to decimate the Consumer Financial Protection Bureau. Its plight may not seem as urgent. But trust me, the fate of this vital agency will impact you, too.
In early February, Musk posted “CFPB RIP,’’ on X, formerly Twitter, with a gravestone emoji.
Musk’s death march has begun. The number of consumer complaints being processed by the bureau is significantly down, and several lawsuits against financial companies were recently dropped.
During his first term, Trump was hell-bent on eviscerating the authority of an agency that Congress authorized to protect consumers after the 2008 financial crisis. His choice to lead the agency in 2017 signaled his disdain: Mick Mulvaney, a former congressman who voted to abolish the CFPB.
“The Bureau is far too powerful,’’ Mulvaney wrote in a 2018 report to Congress, re-upping the long-standing Republican criticism of the CFPB’s actions against businesses, claiming the agency overstepped its powers.
But consumers needed then — and need now — a powerful advocate.
When harmed, the average consumer often doesn’t have the money to defend themself. Hiring an attorney is expensive. Rooting out deceptive predatory practices should be left to the government, not a family trying to make ends meet.
Remember the Great Recession?
Do you recall how big businesses’ reckless behavior sent our economy and the housing market into a financial tailspin? People lost their homes and jobs. Fearing even greater declines, many investors cashed out of the stock market, locking in losses they never recovered.
It took the recession and a wave of foreclosures before Congress acted to require simpler mortgage-disclosure forms. That task was assigned to the CFPB, the brainchild of Senator Elizabeth Warren.
In the 14 years the agency has existed, it has challenged banks on outrageous overdraft fees, taken on payday lenders, and issued rules to rein in rogue debt collectors. It created a complaint database to help consumers seeking to resolve disputes with their creditors and pursued companies and industries with deceptive marketing and billing practices.
The agency was also laser-focused on making companies communicate with consumers in plain language.
Think of the CFPB as a Doberman pinscher guarding your financial interests.
“Since its founding, the CFPB has returned over $21 billion directly to consumers,’’ Warren said during a hearing this past week. “It’s helped service members who have been ripped off by unscrupulous lenders. It’s helped borrowers whose student loan servicers treated them unfairly; it’s helped families that have been scammed; and it’s helped thousands of Americans that have been charged extortionate fees by big banks and other financial services providers.’’
In one of its final actions under the Biden administration, for example, the CFPB filed a lawsuit on Jan. 14 against Capital One, alleging the financial institution misrepresented its “360 Savings’’ accounts, effectively “cheating consumers out of more than $2 billion in interest payments.’’
A month earlier, the CFPB filed a lawsuit against Rocket Homes Real Estate, alleging that the company incentivized real estate brokers and agents to steer home buyers to Rocket Mortgage.
“At a time when homeownership feels out of reach for so many, companies should not illegally block competition in ways that drive up the cost of housing,’’ said then-CFPB Director Rohit Chopra in announcing the action.
But on Thursday, the CFPB dropped several complaints against financial institutions, including the ones for Capital One and Rocket Homes.
“We welcome the CFPB’s decision to dismiss this action, which we strongly disputed,’’ a spokesperson for Capital One said in an emailed statement.
In a statement, Rocket Homes said: “This case was a misrepresentation of the facts, as we have said from the day the suit was filed.’’
The dismissed cases “underscore why the CFPB’s work is so essential to investigate practices that are draining hard-earned money from the pockets of everyday people,’’ Lauren Saunders, associate director of the National Consumer Law Center, said in a statement.
The CFPB’s consumer-complaint system is already suffering. Senate Banking Committee Democrats released a report on Tuesday that found an 80 percent drop in the processing of consumer complaints in the first weeks of the Trump administration.
“Nobody is helped by shutting down the agency, except big banks, con-men and rip-off artists, oh and billionaires like Mr. Musk, who is trying to start a new ‘X Money’ feature on his social media platform,’’ Warren said at the hearing. “By eliminating the CFPB, he would take the financial cop off the beat.’’
Jonathan McKernan, Trump’s pick to lead the CFPB, has picked up where Mulvaney left off. In written testimony for his nomination hearing, he said the agency “suffers from a crisis of legitimacy.’’
The businesses being challenged over their practices are the ones crying foul and complaining about the CFPB.
As Christine Chen Zinner, a senior policy counsel at the nonprofit Americans for Financial Reform, pointed out in an interview, the agency has been politically under siege since its creation.
“We have a bad feeling about the direction that it’s going,’’ she said. “This is an agency that was created after a devastating financial crisis because there were regulatory gaps.’’
The CFPB is “an example of the government working for the people,’’ she continued.
If they can’t destroy the agency, Trump and Musk will transform it from a fierce watchdog protecting consumers into a docile lapdog. Under their leadership, it might as well be renamed the Financial Services Protection Bureau.
One user on X, responding to Musk’s cryptic note about the CFPB, gave a compelling example:
“I’ve used the CFPB [complaint system] after my bank was giving me the run around and I had a bunch of fraud charges that they wouldn’t refund me, after telling me they found them as fraudulent. Within a week I had my money back. So explain to me how this doesn’t benefit us as American citizens? This one just really baffles me.’’
Me, too.
Michelle Singletary can be reached at michelle.singletary @washpost.com.
