Elon Musk wants to ‘delete’ the CFPB. Could he?

Andrew Harrer/Bloomberg

WASHINGTON — Elon Musk mentioned the Client Monetary Safety Bureau ought to be eradicated, calling the bureau an instance of “too many duplicative regulatory businesses.” 

The decision comes after Marc Andreeson, the Silicon Valley enterprise capitalist, mentioned on a Joe Rogan podcast that the bureau was “terrorizing monetary establishments.” 

Andreeson has a protracted historical past with the bureau. The CFPB mentioned earlier this yr that it had returned almost $40 million to shoppers from a fintech firm referred to as LendUp Loans, which was backed by Andreeson’s agency Andreeson Horowitz. The CFPB in 2021 closed LendUp Loans, which billed itself as an alternative choice to conventional payday lenders, for “repeatedly mendacity and illegally dishonest its prospects.” 

Musk might need the ability to affect the Trump administration’s views towards the bureau as co-head of a brand new entity referred to as the “Division of Authorities Effectivity,” which can function exterior of the federal government. 

The flexibility of Musk — and of the Trump administration writ giant — to shutter the CFPB, nonetheless, is proscribed. 

It will doubtless take an act of Congress to unwind the bureau. 

“Nonetheless lucky or unlucky, the CFPB was established by an act of Congress — requiring an act of Congress to ‘delete,'” mentioned Aaron J.B. Kofsky, Vice President-elect JD Vance’s former monetary coverage advisor. “And I simply do not suppose the votes are there. Whereas I take challenge with a lot of the CFPB’s work, conservatives ought to as a substitute give attention to weaponizing the bureau to constitution an America First course.” 

One other layer of safety for the CFPB is the latest Supreme Court docket resolution — determined by a bench that leans conservative — that finds the bureau’s funding construction constitutional. 

“The logic of deleting the CFPB, like half of the accounts on X, is nothing greater than an imaginative ruse designed to fan flames inside an echo chamber,” mentioned Adam Rust, director of economic companies on the Client Federation of America. “The CFPB is an unbiased company with unbiased funding.” 

Central to Andreeson’s claims, which Musk was responding to in his social media publish, are complaints about “debanking,” which for Musk and his counterparts are sometimes issues about banks’ kicking conservative voices and industries just like the crypto business and the firearms business out of conventional banking companies.

Musk spent a lot of Wednesday posting about debanking and “Operation Chokepoint.” 

“Do you know that 30 tech founders have been secretly debanked?” Musk wrote, reposting a video of Andreeson’s interview. 

It’s going to be a key level in banking coverage to look at within the new Trump administration, consultants mentioned, no matter whether or not it winds up affecting the CFPB or different banking businesses. 

“Whereas debanking — primarily of conservative voices and industries disfavored by the Left — is a severe challenge, the CFPB is just not the perpetrator,” Kofsky mentioned. “Financial institution examiners on the FDIC, Fed and OCC make the most of reputational danger to stress banks to cease doing enterprise with not solely conservatives, but additionally the gun, conventional power and crypto industries.” 

The CFPB was created as a part of the Dodd-Frank Act, and the bureau specifically comes from the work of now Sen. Elizabeth Warren, D-Mass., who would be the rating member of the Senate Banking Committee when the brand new Congress begins within the new yr. 

Conservatives and Republicans since have opposed the bureau, with Trump appointing Mick Mulvaney to steer it throughout his first time period, with the aim of dismantling its work and undercutting its powers. 

Challenge 2025 — the conservative blueprint from the Heritage Basis that Trump has distanced himself from whereas embracing a few of its concepts — requires “returning the patron safety perform of the CFPB to banking regulators and the Federal Commerce Fee.” 

What the election means for the way forward for the CFPB

It will be an onerous path to perform this, mentioned Todd Phillips, assistant professor learning monetary regulation regulation at Georgia State. 

“The CFPB is a creature of Congress, and Congress can cross laws to abolish it if it desires to,” he mentioned. “That is not going to occur. As a lot because the business dislikes how vigorous Director [Rohit] Chopra has been, they do not wish to see the company abolished.” 

Congress must write laws to maneuver the CFPB’s authorities again to the FTC and to the financial institution regulators, a fancy course of that may make for a extra complicated panorama for bankers and tech companies alike. 

“I anticipate that as quickly as Donald Trump will get into workplace he’ll appoint his individual to run the company and Congress is not going to do a complete lot with it,” Phillips mentioned. “Even conservatives don’t love getting ripped off.”