Trump’s Gutting Financial Protections Placed after 2008 Financial Crisis

If you, like millions of others, are a victim of financial fraudsters, debt collectors, excessive banking fees, a false credit report, unscrupulous payday lenders, or check cashers you can file a complaint with the Consumer Financial Protection Bureau (CFPB). Unfortunately, there is little chance that the problem will be resolved now that President Trump is attempting to reduce its staff from 1700 to 200 and has replaced Rohit Chopra, the head of the agency that saved and recovered at least $23 billion for consumers, with Trump loyalist Russel Vought.  

In January virtually all of the agency’s workers were put on notice that they likely will lose their jobs. Hundreds of workers in San Francisco’s Western Regional Office received notices that they were on administrative leave and told not to return to work and to stop almost all of the projects they were working on. A furloughed employee has said there are plans to close the office entirely along with all the other regional offices except Atlanta. While their National Treasury Employees Union was granted a preliminary injunction to preserve the CFPB on March 28 by DC District Court Judge Amy Berman Jackson, the Trump Administration has appealed the ruling hoping to neuter the agency charged with “Rooting out unfair, deceptive, or abusive acts or practices by writing rules, supervising companies, and enforcing the law.” 

Since 2012, consumers have been credited or saved more than $23 billion due to CFPB actions. The CFPB won a suit against Wells Fargo for $3.7 billion for decades of mismanagement of auto loans, mortgages, and deposit accounts harming more than 16 million Americans gaining them justice after suffering fraud. The CFPB recovered $363 million from lenders who scammed service members and veterans by violating the Military Lending Act. The CFPB instituted a rule limiting overdraft fees to $5 instead of the customary $20-35 that banks charge customers who have the least in their accounts, a projected savings of $5 billion to consumers. Unfortunately, Congressional Republicans killed this rule in April allowing banks to go back to charging whatever they want.  

Organizations working to democratize finance such as the California Public Banking Alliance, the San Francisco Public Bank Coalition and Americans for Financial Reform strongly support the work of the CFPB. They are also strongly opposed to billionaire tech moguls and bankers attempts to defang these effective regulators and consumer advocates.

Elon Musk whose DOGE started the mass firings may fear the CFPB getting in the way of his desire “to transform X.com, his social media platform, into a virtual wallet where people can send money to one another” without regulatory restraints. 

Hai Binh Nguyen, an enforcement attorney with the agency in San Francisco notes the agency was designed to take actions against businesses that employ unfair tactics, such as getting credit card companies to return money from disputed charges and stopping businesses like Wells Fargo that opened thousands unauthorized accounts. 

The shuttering of the CFPB has met strong opposition from those that want to see American families protected from financial scams and mismanagement. Senator Elizabeth Warren posted on Twitter/X, “Understand this: by trying to kill the Consumer Financial Protection Bureau, Elon Musk and Russ Vought [the acting director of CFPB and key architect of Project 2025] are trying to make it easier for big banks to cheat you. It’s another way the Trump administration wants to reward the rich and powerful while hurting working people.” 

Minnesota Attorney General Keith Ellison, tells the story of Sharon Tolbert-Glover who was swindled by mortgage refinance salespeople who claimed they could reduce her monthly mortgage payments. The contract these fraudsters sold her instead raised her mortgage payments from $1200 to $1900 a month leaving this ex-nun with only $200 left for necessities after receiving $2100 from social security and her deceased husband’s pension. This horror story led Ellison to become an outspoken defender of the CFPB.

With Trump’s attacks on the CFPB and his installation of banking and crypto friendly regulators, the chances for another financial collapse, as bad or worse than the one in 2008, are greatly increased. A key role of government is to protect the general public from unscrupulous actors that rob us; Trump and his billionaire backers would like nothing better than eliminating these protections in order to secure even more profits.

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