The Club PUBlication 02/17/2025

Protect U.S. consumers, preserve CFPB
JOHN RASH Columnist

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Economic and employment data told a statistical story of the Great Depression. But the human story was understood visually through visceral images like "Migrant Mother," Dorothea Lange's era-defining photograph of a destitute, desperate farmworker and her children huddled in a California camp after the failure of the pea crop.

The Great Recession didn't yield such similar images — mostly photos of abandoned Arizona, Florida or California condominiums, or "The Big Short," the sublime film about subprime mortgages plunging the country into a deep recession that nearly spun into a global depression — a specter that led then President George W. Bush to say that if Congress didn't cooperate on emergency legislation "this sucker could go down."

The Great Depression's social and economic shock led to temporary programs like the WPA and CCC as well as enduring entities like the FDIC and SEC, among other alphabet-soup Washington and Wall Street institutions.

The Great Recession spurred one significant equivalent: The CFPB, or Consumer Financial Protection Bureau, which "was created after excessive risktaking by financial companies, many of whom were not supervised by a federal regulator, crashed our economy," Adam Rust, director of financial services for the Consumer Federation of America, said in a statement.

In a follow-up interview, Rust said that "first, they shouldn't shutter it because it's illegal," referring to its creation by Congress, not the White House.

He elaborated that the bureau is "dedicated to consumers, which is unlike any banking agency. When an older person is scammed, when a service member falls prey to a predatory loan, when you can't get resolution on your mortgage bill or your student-loan account, it's the CFPB that steps in."

In fact, the bureau says it's stepped in to claw back nearly $21 billion on behalf of wronged consumers. But the agency has long been fought by financial institutions. And now, by the Trump administration. Which, in action akin to the lightning (and likely illegal) dismantling of the United States Agency for International Development (USAID), has frozen the bureau's work by actions from the Elon Musk-led Department of Government Efficiency (DOGE), as well as the Office of Management and Budget, whose recently confirmed leader, Russell Vought, was one of the architects of "Project 2025," the controversial governing blueprint President Donald Trump disavowed on the campaign trail but seems to now be implementing from the White House.

The CFPB, according to the Washington Post, "has the authority to write rules for financial institutions, impose monetary penalties on those that violate them and provide compensation to consumers who have been wronged by malpractice. Consumers can also file complaints with it about financial products such as credit cards, virtual currencies, vehicle loans and mortgages."

But its nearly 1,700-plus employees were told by Vought to "cease all supervision and examination activity" and "stakeholder engagement."
The CFPB "has been a woke & weaponized agency against disfavored industries and individuals for a long time," Vought posted on X, Musk's social network, using the Orwellian words deployed to destabilize government institutions.

"I don't know what on Earth that means," Rohit Chopra, the bureau's former director told PBS NewsHour. Listing a litany of actions against financial institutions on behalf of consumers, Chopra said that "these are things that people of every political stripe want to protect themselves against." Consumers, he added, often do not have much power against "some of the biggest corporations in America.

And that's what the CFPB does to level the playing field."
Vought added to his post that "This must end." But Musk unsubtly seems to have already buried the bureau, posting "CFPB RIP" on X, next to a tombstone emoji.

Indeed, it seems the dawn of a grave era for oversight overall just weeks into the Trump administration. Beyond the previous unconscionable pardons of people who assaulted law enforcement officers on Jan. 6 and the questionably legal firing of 17 inspectors general of federal agencies, the administration on Monday moved to drop corruption charges against New York Mayor Eric Adams, pardoned former Illinois Gov. Rod Blagojevich (convicted of attempting to in effect sell the Senate seat previously held by President Barack Obama), as well as issued an executive order to pause all actions taken under the Foreign Corrupt Practices Act.

Musk, whose extensive, often federally funded businesses (including $13 billion in government contracts over the past five years, according to an analysis in the New York Times), have made him the world's richest man, is facing investigations by at least 11 different federal agencies, according to the Times. The investigators include the CFPB, which has hundreds of complaints about Tesla, mostly about debt collection or loan problems.

The bureau would also likely monitor Musk's plan to launch a payment system on X.
According to the White House press secretary, if Musk "comes across a conflict of interest with the contracts and the funding that DOGE is overseeing, then Elon will excuse himself from those contracts."

Richard Blumenthal, a Connecticut Democratic senator, is less sanguine. In a letter to Tesla's general counsel and board chair, Blumenthal wrote that Musk's "dual roles — running a for-profit corporation while serving in public office — not only creates glaring conflicts of interest that pose grave risks for America's most sacred institutions but may also violate federal law."

Most profoundly, Chopra told PBS, "Defunding this type of oversight is just begging for another financial crisis."
Another Great Recession is a risk the country can't take — especially since it could spiral into an economic calamity similar to that which was the subject of Lange's Great Depression lens.

Or the camera of her contemporary Walker Evans, whose searing shots of sharecroppers struggling through the Great Depression were compiled in "Let Us Now Praise Famous Men," the seminal account of those who were the opposite of famous: anonymous, everyday, dignified Americans, the kind of people the CFPB — and, ideally, the administration — should protect. [email protected]