Defending CFPB for the Hundredth Time

You are reading the 100th edition of Financial Justice – happy triple digits! When we started this brief in 2023, a banking crisis was shaking the financial system. Now, crises are everywhere, and this newsletter will keep you informed about the news and the work of Americans for Financial Reform. If you want to support the work we do and celebrate 100 issues of Financial Justice, consider making a small donation to the fight.

Also, the staff of AFR would like to collectively thank Dustin Duong, an erstwhile intern who was so good we hired him as a researcher. We couldn’t publish Financial Justice without him. Thanks, Dustin!

House Republicans will soon get a chance to let big banks keep skimming junk fees from their customers’ bank accounts and Big Tech become unregulated big banks themselves. There’s still time to stop them.

At the same time, the courts are standing up for the Consumer Financial Protection Bureau. Judge Amy Berman, in a 112-page opus that name-checked the movie Casablanca, granted a preliminary injunction preventing Acting Director Vought from effectively shutting down the CFPB. The Trump administration’s appeal has landed in the U.S. Court of Appeals for the D.C. Circuit before a panel of three judges, two of whom were previously appointed by Trump himself. They have stayed the injunction but a previous judicial order still protects the CFPB from dismemberment.

As early as next week, a set of Congressional Review Act resolutions will come to a vote on the House floor. If passed, they will allow Congress to overturn two rules finalized during the Biden-era Consumer Financial Protection Bureau: one that keeps money in people’s pockets by limiting overdraft fees at $5, and another that would have protected everyday users of nonbank payment apps (think ApplePay, Venmo, PayPal or X-Money, Elon Musk’s planned currency once it hits a certain threshold) from surveillance, fraud and other potential abuses.

The Senate previously sided with banks when it advanced legislation to undo the overdraft rule. Despite the rule having been expected to save families across the nation $5 billion a year, only one Republican voted against the rollback in the Senate. The move, which allows banks to charge an outsized amount for going over one’s bank balance – even if just barely – comes at a time when overdraft fees slammed consumers with $12.1 billion in charges in 2024 at credit unions alone, 48 percent higher than once thought.

Said AFR’s Patrick Woodall: “Overdraft fees are nothing more than an attempt by big banks to pad their profits at the expense of consumers.”

Eager to expand their reach into financial services, Big Tech firms like Meta are also quietly benefiting from a rollback of consumer protection enforcement under the Trump-era CFPB. ProPublica reports that the agency paused or abandoned investigations into Meta and other companies over concerns including deceptive financial advertising. These moves signal a troubling shift, as tech giants increasingly operate in financial spaces, such as digital payments and lending, without facing the same scrutiny as traditional banks.

AFR and other advocates warn that without rigorous oversight, consumers could face serious harms from fraud, opaque practices and data misuse. Said AFR’s Amanda Jackson:

The House should reject this total giveaway to Big Tech that enriches Elon Musk and rewards him for his assault on the democratic governance and the rule of law. Musk’s unlawful, unaccountable attack on the CFPB is aimed straight at this rule which would provide for supervision of his new X-Money payment app and safeguard users from fraud, privacy lapses, and losing access to accounts.

Want to make it clear that the Trump administration, Musk’s DOGE, and their Congressional allies can’t get their way? Consider going to one of the hundreds of Hands Off! protests across the country this Saturday. Tell them to keep their #HandsOffCFPB.

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BANKING AND FINANCIAL STABILITY: Big Banks’ OCC – Crypto’s SEC – Extend and Pretend – Ditching Reputational Risk – Capital Formation – Citi – Independent? Agencies
CONSUMER: The Fight for the CFPB – Credit Card Late Fees – Medical Debt – Letting Payday Drain Consumers – Pardoning Corporate Wrongdoers – Comerica – Buy Now, Pay Later – Prehired
CAPITAL MARKETS: The Billionaires’ Bill – SEC Brain Drain
PRIVATE MARKETS: PE’s DA – Private Equity and Senior Living – PE’s Trouble – Other Private Markets News
CRYPTO: The Stablecoin Bill – Trump’s (Un)Stablecoin Gambit – Forget Decentralization - Coinbase Wants MOAR – Solana Sketchiness – Who Even Owns Crypto?
HOUSING: Making Housing Unfair – Paying Back a Racist Lender – More Info Needed
CLIMATE AND FINANCE: Musk’s FEMA Purge – The Insurance Crisis – No Insurance Institution – The OCC Bows Out
POLITICS AND MONEY: Crypto Cash in Florida

Feedback? Reach us at afrnews@ourfinancialsecurity.org

BANKING AND FINANCIAL STABILITY

Big Banks’ OCC.

In a party line vote this week, the Senate Banking Committee approved the nomination of Jonathan V. Gould to serve as Comptroller of the Currency, potentially making one of Wall Street’s watchdogs a banking industry ally bent on deregulation. In a letter, AFR and other public interest organizations urged Senators in the Committee to reject Mr. Gould’s nomination, explaining that Gould has been openly hostile to key financial protections, including the pivotal Dodd-Frank Act, which he does “not think was a good law in general.” Gould was one of the architects of a major deregulatory bill that significantly weakened banking safeguards, lowered capital requirements, and more during the first Trump administration.

Crypto’s SEC.

In a party line vote this week, the Senate Banking Committee advanced the nomination of Paul Atkins to head the Securities and Exchange Commission, potentially handing a seat intended for a securities watchdog to someone with a history of supporting deregulation and a portfolio stuffed with $6 million in crypto-related assets. Before his confirmation, Atkins called crypto policy a “top priority,” hinting at easing up on regulations to make it easier for the members of the volatile industry to conduct business.

Ahead of the hearing, AFR and 47 other organizations called on the Senate Banking Committee to oppose Atkins’ nomination, citing his support of industry-backed deregulatory agendas and numerous conflicts of interest. Said AFR’s Patrick Woodall:

The Atkins record speaks for itself. When previously serving as a SEC commissioner, he repeatedly put the deregulatory interests of corporate actors and Wall Street above the needs of investors, workers and working families. He is categorically unfit to serve in a role that requires sober leadership committed to the public interest rather than the enrichment of clients and friends.

Extend and Pretend.

Lenders pushed back repayment of a record $348 billion worth of commercial real estate (CRE) loans into 2025, and trends suggest that they’re not done with extending-and-pretending to stave off having to mark the losses on their balance sheets. About 40 percent of the near-trillion-dollar mass of CRE loans coming due this year were supposed to have been due in previous years. As property values decline and loan delinquencies spike, analysts are particularly concerned about regional banks, which are more heavily exposed to the sector than their larger counterparts.

Ditching Reputational Risk.

FDIC Acting Chair Travis Hill informed Congress that his agency would not “criticize activities or actions on the basis of reputational risk,” bending to industry demands for less accountability. The move would prevent bank examiners from potentially considering how risky lines of business – such as those that facilitate money laundering or terror financing – impact the safety and soundness of a financial institution. Acting Comptroller of the Currency Rodney Hood made a similar announcement, which the nominee for the permanent position, Jonathan Gould, said he supports.

Capital Formation.

Ahead of a House Financial Services Committee hearing, Beyond Silicon Valley: Expanding Access to Capital Across America, AFR sent a letter to policymakers to oppose a bundle of bills that would erode investor protection under the guise of capital formation. Many of the proposals considered at the hearing resemble Project 2025 provisions and would ultimately expose retail investors to informational asymmetry, losses, and steep fees they cannot afford, stemming from opaque, risky, and illiquid private markets, AFR argued.

Citi.

The CFPB withdrew its support for a lawsuit brought by the New York Attorney General last year against Citibank over the lender’s alleged failure to protect victims from millions in losses due to electronic fraud. In May 2024, under Rohit Chopra, it filed an amicus brief backing the NY AG. Under Trump-appointed Director Vought, however, the agency called the previous filing “highly irregular and inappropriate.”

Independent? Agencies.

While the Trump administration seeks to consolidate banking regulators, potentially bringing their power more squarely into the purview of the Treasury and threatening the Federal Reserve’s independence, a federal court just made it easier for the president to fire the board members of executive branch agencies like the National Labor Relations Board and the Merit Systems Protection Board.

CONSUMER

The Fight for the CFPB.

On the occasion of a House hearing devoted in part to attacking the CFPB, AFR reminded everyone that the assault on the CFPB only hurts consumers to the benefit of Wall Street, urging the House Financial Services Committee to support a strong CFPB with an independent director and secure funding stream. Said AFR’s Christine Chen Zinner:

With Wall Street, Big Tech, and Elon Musk eager to dismantle the CFPB and throw consumers to the wolves, it’s no wonder their allies in Congress are mounting yet another legislative assault on the CFPB. As has been the case for most of its 14-year history, the CFPB draws fire from the industries it oversees precisely because it does its job well. Money back in consumer pockets is less money for the financial services industry, as it should be.

Meanwhile, some lawmakers have called for probes into the conduct of Musk and DOGE.

Credit Card Late Fees.

With less than 30 days before it has to reach a settlement in the bank industry’s lawsuit against the agency’s $8 cap on credit card late fees, Vought’s CFPB says it’s “optimistic” that it will find a resolution with the trade groups at the heart of the case. The industry has been vying for a permanent injunction to prevent the rule from being able to help consumers.

Medical Debt.

Ahead of last Wednesday’s House Financial Services hearing to undermine the CFPB’s mission to defend everyday consumers, Accountable.US reported that committee Republicans accepted $867,000 from trade groups that wanted to block the agency’s medical debt rule. The rule would have wiped $49 billion from the credit reports of 15 million people.

Letting Payday Drain Consumers.

At the end of March, a CFPB rule that would prevent predatory payday lenders from skimming off of their customers’ accounts multiple times if denied went into effect. Vought’s CFPB swiftly said it wouldn’t enforce the rule, effectively allowing high-cost lenders to weigh on “people struggling to afford basic necessities,” in the words of Lauren Sanders, from the National Consumer Law Center.

Pardoning Corporate Wrongdoers.

The Consumer Federation of America and Student Borrower Protection Center lowlighted a litany of cases where the Trump administration effectively pardoned corporate offenders, despite their long records of consumer abuses. The entities that made the list had their ongoing enforcement cases dismissed by Vought’s CFPB. Some of the dishonorable mentions: Wells Fargo ($4.8 billion in penalties paid over the years), Bank of America ($1 billion in penalties), and JPMorgan Chase ($600 million in penalties), among others.

Comerica.

The CFPB accused Comerica – the bank that was responsible for providing card services for 3.4 million people receiving federal benefits – of using an ongoing lawsuit to forestall incoming enforcement action over its alleged mishandling of the government benefits program. Late last year, the CFPB alleged that the bank charged consumers illegal junk fees, forced consumers to close accounts, misled fraud victims, and imposed illegal terms of service on customers, among other harms.

Buy Now, Pay Later.

The CFPB is now signaling it will withdraw a rule that would have brought Buy Now, Pay Later (BNPL) providers under the same protections that govern credit cards. The rule, finalized in 2024, required companies like Klarna and Afterpay to give consumers clear dispute rights and refund protections—basic safeguards many assume already exist. But under pressure from fintech industry lobbyists and a lawsuit from the Financial Technology Association, the CFPB appears ready to reverse course. Consumer advocates, including AFR, warn that without these protections, BNPL users, many of whom are young, lower-income, or financially vulnerable, will remain exposed to hidden fees, confusing terms, and limited recourse when things go wrong. This action comes at a time when Klarna and DoorDash have partnered to offer installment plans to pay for food deliveries.

Prehired.

In 2023, the CFPB and 11 states compelled Prehired, a tech bootcamp that used deceptive and misleading practices to lock their students-come-borrowers into “illegal loans,” to pay $30 million in consumer relief. The Verge reports that the company is worming its way back under a different name: FastTrack. But this time, the consumer agency that previously kept it in check is being restrained from within from protecting borrowers.

CAPITAL MARKETS

The Billionaires’ Bill.

The likes of billionaire oligarch Elon Musk, Mark Zuckerberg, and shadowy private equity firms teamed up against investors like CalPERS – which represents everyday workers and savers – and advocates to push Delaware to pass a law that will make it easier for corporate wrongdoers to amass power and dodge accountability. SB21, or the “Billionaires’ Bill,” will overhaul Delaware corporate law to make it more onerous for investors in a given company to challenge insider wrongdoing in Delaware courts. AFR, Public Citizen and the Consumer Federation of America denounce the bill. Wrote AFR’s Natalia Renta:

Rewriting Delaware corporate law at the behest of Musk and other corporate insiders makes no sense. Insulating the self-serving decisions of corporate insiders from challenge and gutting the federal agencies and protections that hold corporate power accountable are two sides of the same coin. Heads Big Tech oligarchs win, tails the rest of us lose.

SEC Brain Drain.

​The U.S. Securities and Exchange Commission (SEC) is experiencing a significant reduction in staff, with over 600 employees—more than 12 percent of its workforce—accepting voluntary buyout offers amid the Trump administration's initiative to downsize the federal government. This wave of departures includes senior personnel and enforcement lawyers, raising concerns about the agency's capacity to effectively oversee financial markets and protect investors. The buyout program, offering $50,000 incentives for voluntary resignation or early retirement, is part of a broader effort to gut administrative agencies’ ability to police financial institutions and corporations.

PRIVATE MARKETS

PE’s DA.

When a private equity firm takes over a company, it loads that company with an often-oversized debt burden. It’s one of the reasons why the industry is keen to tack a “DA” onto the end of a tax calculation that only looks for “EBIT.” Currently, tax deductions use Earnings Before Interest and Taxes to limit how much interest paid on debt a firm could deduct from its federal taxes. Adding back Depreciation and Amortization would increase the amount of earnings used to figure out the deduction and therefore the amount of tax-deductible interest, making the potential payouts collectively worth billions if the industry gets its way.

Private Equity and Senior Living.

Private equity firms are buying up senior housing facilities and dramatically increasing rents, often with little notice or justification. For example, a Vietnam veteran living in his dream retirement community suddenly saw his rent increase by nearly $1,000 a month after new owners took over. These investment firms, focused on maximizing profits, frequently cut staff and essential services, jeopardizing residents’ safety and well-being. As NBC News reports, many seniors on fixed incomes are left scrambling to find alternatives or facing the threat of eviction.

PE’s Troubles.

The Financial Times takes stock of the problems plaguing private equity. As of last year, firms are sitting on $1.2 trillion of unspent capital, all while more or less unable to sell off the companies they already own. As interest rates and inflation rise, the author foresees more volatility in the years ahead.

Other Private Markets News.

Cars. Three well-regarded car news sites, dating back to the mid-2000s, have been gutted by private equity, following a string of their peers going bankrupt, suffering an exodus of talent, and crumbling under reorganization.

Data. Clearlake Capital Group wants to acquire Dun & Bradstreet, a company that provides commercial data and analytics services, for $4.1 billion in cash – and that’s excluding the debt burden.

Dollar Stores. Dollar Tree will sell its Family Dollar brand of stores to two private equity firms, Brigade Capital Management and Macellum Capital Management, for just north of $1 billion.

College Football. Having already fought its way into the NFL, private equity is circling college football now too.

CRYPTO

The Stablecoin Bill.

The House Financial Services Committee approved a stablecoin bill – the STABLE Act of 2025 – that was ultimately a giveaway to the industry, as the legislation lacked sufficient fraud and consumer safeguards and did nothing to address the Trump family’s corrupt crypto business dealings. Said AFR’s Mark Hays:

With no meaningful safeguards or consequences this legislation will make stablecoins assets appear safe in ways that will harm consumers, not help them. Taxpayers may also find themselves on the hook for the future failures of stablecoin companies as these cryptocurrencies become ever-more intertwined with the traditional banking system.

In addition to opposition from many consumer groups ahead of the vote, a group of state banking regulators, represented by the Conference of State Bank Supervisors, told House Financial Chair Rep. French Hill and Rep. Maxine Waters that they had “serious concerns” about the legislation, and asked them to include “significant and material changes” to “prevent regulatory arbitrage, protect consumers, and promote a stable and predictable stablecoin market.”

Democratic leaders on the Committee such as Reps. Maxine Waters (D-Calif) and Stephen Lynch (D-Mass.) opposed the bill due to lax safeguards and because the bill does not block Trump and Musk from issuing stablecoins. Other members, including Reps Sean Casten (D - Ill.), Bill Foster (D- Ill.), Brad Sherman (D-Calif.), Rashida Tlaib (D-Mich.), Nikema Williams (D-Ga.), and Sylvia Garcia (D- Tex) voiced similar concerns in a prolonged debate about the bill’s shortcomings.

Trump’s (Un)Stablecoin Gambit.

AFR’s Mark Hays wrote in Rolling Stone about Trump’s crypto ventures and the mess of fraud, instability, and who-knows-what associated with stablecoins:

Stablecoins are largely used for crypto investing, like poker chips in a casino. You use your regular money to buy chips to play roulette, then cash out your winnings with the house when you’re done…

In 2022, the crypto industry lost over $2 trillion in value. But your bank probably didn’t go under because it wasn’t up to its neck in crypto. But this stablecoin bill — and likely worse bills to follow — could change that, if we’re all suddenly exposed to the risk, fraud, and instability this industry represents.

That hasn’t stopped the Trump family from trying to hit it rich in the cryptosphere. Last week, the Trump family affiliated crypto platform World Liberty Financial announced it would launch USD1, a stablecoin purportedly backed by treasuries, dollar deposits and other cash equivalents. And two of the president’s sons said they’d invest in a new Bitcoin mining scheme, called American Bitcoin, created in partnership with the crypto mining company Hut 8.

Sen. Elizabeth Warren and four other Democrats fear that in dealing with these Trump family business ventures, regulators could face “an extraordinary conflict of interest,” and questioned how the agencies would be expected to oversee the activities of crypto companies steered by the president’s family in an objective and fair manner.

Said former SEC advisor Corey Frayer: “Trump knows a good grift when he sees one. There are a lot of people who have said that Trump doesn’t really understand crypto. And while that may be true at a technological level, I don’t think I have ever seen anyone so quickly master the pump-and-dump business model of crypto like he did with his meme coin.”

Forget Decentralization – Coinbase Wants MOAR.

Coinbase, the crypto exchange that previously came under fire from Gensler’s SEC for operating as an unregistered securities exchange, wants to purchase Deribit, the world’s largest platform for Bitcoin and Ether options, Bloomberg reports.

Solana Sketchiness.

Memecoins have made headlines recently, either for their role in scammy rug-pull schemes, their sheer ridiculousness, or both. Many of these coins are minted on the Solana blockchain, and despite industry claims regarding decentralization, a recent Bloomberg article describes how memecoin markets and the platforms that host them are often controlled by a small group of insiders that profit even as retail investors – any normal person that wants to tap into the frenzy – lose out. Groups responsible for launching memecoins are called cabals, who often employ questionable techniques to pump coin prices to generate sales and boost their holdings — such as sniping, in which they use trading bots to mass-buy tokens during launch and then quickly sell them off.

Who Even Owns Crypto?

In a recent blog post, the Federal Reserve Bank of St. Louis analyzed data from the Survey of Consumer Finances (SCF) to offer one of the clearest pictures to date of how crypto is distributed across the U.S. population. The analysis estimates that only about 4.3 percent of American households held cryptocurrency in 2022. This relatively small share suggests that, while digital assets have visibility, their adoption remains limited and uneven, highlighting a need for better, independent data collection and clearer insights into who owns crypto and how it's being used.

HOUSING

Making Housing Unfair.

Top banking watchdogs – the Fed, FDIC and OCC – announced plans to pull back a new rule under the Community Reinvestment Act intended to address disinvestment in lower-income areas and communities of color due to redlining and discriminatory lending practices. It’s a win for the banking industry, who didn’t want to comply with rules they claimed were too complex – even though the provisions ultimately didn’t go far enough to ensure fair lending.

Meanwhile, Bill Pulte announced (by posting a photo of a wrinkled piece of paper) that Fannie Mae and Freddie Mac would end special purpose credit programs that were designed to level the homebuying field by offering marginalized borrowers financial support.

Paying Back a Racist Lender.

Last year, the CFPB took action against Townstone Financial for illegal redlining and discrimination against Black families, after conducting an analysis of the company’s skewed lending practices and a review of an episode of the Townstone Financial Show podcast, on which the hosts made racist statements about local neighborhoods and discouraged prospective Black mortgage applicants. Last week, under Vought, the agency sought to reverse the case and return $105,000 to the company.

AFR notes that Townstone conducted its business almost exclusively in majority-white neighborhoods, with little to no lending in Chicago’s majority-Black neighborhoods. Only 1.4 percent of Townstone loan applicants were Black, and less than 1 percent of applicants were for properties in Black neighborhoods, even though 30 percent of Chicago residents are Black. Townstone was a clear outlier; it did far less lending in the South Side than other firms.

Said AFR’s Christine Chen Zinner:

The reversal of this case plumbs new depths in the Trump administration’s utter contempt for the spirit and letter of civil rights laws designed to provide fair access to credit and financial services for everyone. Without that access, no one can meaningfully prosper in today’s economy.

Or put another way, vacating this settlement for such overt racism is “banacakes.”

More Info Needed.

AFREF supports a Federal Trade Commission proposal to conduct a study of “mega investors” that own more than 1,000 single-family rental homes. Creating and maintaining a publicly available database would provide invaluable information about trends, regional consolidation within the single family home rental industry and its impact on rental and home purchase pricing. Additionally, the database would be helpful to current and prospective residents, neighbors, communities, and state and local policymakers concerning the prevalence and impact of mega-investor-owned properties, as mega investors often use LLCs and corporate shields to obscure their true ownership from the public.

CLIMATE and FINANCE

Musk’s FEMA Purge.

Elon Musk’s intervention in FEMA funding decisions has sparked trouble for affected communities around the country. His unfounded accusations led to the firing of top officials and the stripping of $80 million in aid meant to support migrants in New York City. Musk falsely claimed that FEMA was misusing disaster relief funds to house migrants in luxury hotels. Musk’s actions not only spread misinformation but also undermined a critical humanitarian effort, punishing vulnerable communities and public servants in service of political theater.

The Insurance Crisis.

The Federal Housing Finance Agency's recent decision to rescind its Advisory Bulletin on Climate-Related Risk Management and waive Equitable Housing Finance Plan requirements set back efforts to address growing climate threats that disproportionately impact lower-income communities and communities of color.

Said AFREF’s Caroline Nagy:

Rescinding this guidance and waiving Equitable Housing Finance Plan requirements sends a signal to the Enterprises and the market that the FHFA will no longer support climate resilience, leaving homeowners to fend for themselves in an already historically challenging housing market.

No Insurance Institution.

In a move that would make it more difficult for the government to monitor nationwide insurance risks, the National Association of Insurance Commissioners is backing an effort to dismantle the Federal Insurance Office (FIO). The FIO has previously exposed limitations of existing state-level insurance regulations and it released a critically needed nationwide insurance dataset in the waning days of the Biden administration, revealing how quickly climate change is making property insurance unaffordable across the country.

The OCC Bows Out.

The OCC withdrew from the Principles for Climate-Related Financial Risk Management for Large Financial Institutions, a joint initiative by banking regulators to establish a set of climate principles for big banks with more than $100 billion in assets.

Said AFREF’s Jessica Garcia: “The OCC is undermining legitimate efforts to understand how climate change creates compounding and concurrent risks for institutions and for the financial system, which may lead to crisis.”

And AFREF’s Kelsey Condon:

The old backwards-looking style of risk management and monitoring is insufficient for the level, frequency, and speed of these unfolding climate risks. The OCC’s withdrawal of guidance that was intended to assist banks as they address emerging, forward-looking risks — such as a sizable portion of homeowners losing access to property insurance each year — leaves our banks, neighbors, and economy more exposed.

POLITICS and MONEY

Crypto Cash in Florida.

The growing influence of pro-cryptocurrency super PACs like Defend American Jobs, backed by Fairshake, raises serious concerns about the role of money in politics and the potential erosion of democratic accountability. With over $1.5 million being funneled into Florida’s special elections to support crypto-friendly candidates, the industry is clearly aiming to buy political influence and shape regulatory outcomes in its favor.