Forget Trump and Musk: Voters Like the CFPB

Forget what Trump, Elon Musk, and Wall Street think of the Consumer Financial Protection Bureau: Large majorities of voters, across party lines, support the agency’s mission, according to a new poll commissioned by Americans for Financial Reform and the Center for Responsible Lending. Said AFR Co-Executive Director Lisa Donner:

The public likes the CFPB for the same reason Wall Street, Big Banks, Big Tech, predatory lenders and abusive debt collectors are fighting it: because the agency makes financial companies treat people more fairly, and puts money back in household budgets.

But Trump appointees are still busy doing the wrong thing. The CFPB – just two months into the Trump administration – has let multiple corporate wrongdoers walk free. Under the leadership of Trump appointee Russell Vought, the agency has axed and buried some of its most important, ongoing legal cases.

Maybe the most egregious example: it dropped a case on Zelle, the fraud-ridden payment system run by JPMorgan Chase, Bank of America, and Wells Fargo and abandoned a lawsuit against Capital One over fleecing consumers out of more than $2 billion. It has also asked to pause an enforcement action against Comerica Bank.

And it has dropped its case against a student loan servicer that owes $3 million to borrowers for multi-year failures, a case against a predatory lender that locked borrowers into a cycle of debt, a case against a manufactured home lender that trapped borrowers in impossible loans, a case against a credit bureau’s sketchy bait-and-switch subscription plan, and its case against Rocket Homes for an illegal mortgage lending kickback scheme.

Said AFR’s Christine Chen Zinner:

The old CFPB stood ready to protect consumers and wrestle back the ill-gotten gains of big banks like Capital OneWith this decision, the Trump-appointed leadership is letting Capital One steal $2 billion from its depositors, another example of this administration standing up for Wall Street at the expense of everyday people.

The new administration’s crusade is also putting in limbo hundreds of millions of dollars that’s due to return to harmed consumers.

Legislative attacks are in motion, too. The House Financial Services Committee voted this week on a party-line vote to roll back an important CFPB safeguard on overdraft fees. The Senate then voted to roll back a CFPB plan to oversee payment apps like Google Pay, Apple Pay and X-Money, the currency envisioned for use on the former Twitter. What Musk wants from this administration and Congress, Musk gets.

Now is the time to make that call to your member of Congress and ask them to allow the CFPB to keep serving people. As Christine Chen Zinner reminded Checkbook listeners: “Consumers are voters, too.”

Over 300 organizations and academics from 45 states and D.C. have called on lawmakers to restore a strong CFPB. Hundreds of House Democrats have tried to push federal courts to block the shutdown, and Senate Democrats have launched investigations and held hearings.

Trump officials are blatantly lying about what they’re doing as they take the CFPB apart. Internal emails show that the agency’s leaders aren’t authorizing supervision and examination activity, “even though the Bureau is required by law to carry out these activities.”

Fortunately, a federal court has ordered the Trump administration to keep its hands off the agency’s funding until at least March 14, a stay that will probably be extended. This week, a federal judge ordered a new hearing to ascertain if legally required work was still taking place at the CFPB.

Advocacy organizations are pushing to keep Jonathan McKernan out of the CFPB director’s seat. That said, with the CFPB dropping cases right in the middle of McKernan’s confirmation hearing, it sure seems like Musk and his acolytes are very much in charge.

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BANKING AND FINANCIAL STABILITY: Merger Mania – More Regulators is Better than One – Banks and Consumers – Wall Street Wants the Post Office
CONSUMER: Blocking Rules – Senate Republicans Choose Musk Over Everyday People – Zelle in a Handbasket – Rural Communities Need the CFPB
CAPITAL MARKETS: Shareholders’ Rights – The Billionaires’ Bill – Who Will the SEC Fight For? – Pension Power – Investors Fighting Financial Deregulation
PRIVATE MARKETS: Private Equity and Data Centers – Walgreens – Looting America’s Affordable Housing Fund – PE Pay
CRYPTO: Bitcoin Reserve? – Unstablecoins – Missing the Point – Not for Consumers – Dropping Investigations – Memecoins Don’t Count
HOUSING: A Threat to Affordable Housing – Overturning a Fair Housing Rule – Bill Pulte – HOPE Over Hedge Funds
CLIMATE AND FINANCE: The Insurance Disaster

Feedback? Reach us at afrnews@ourfinancialsecurity.org

BANKING AND FINANCIAL STABILITY

Merger Mania.

The FDIC wants to axe a Biden-era policy that eliminated the 1995 automatic approval mechanism and expedited merger review process as well as updated the merger review manual, including heightened reviews or public hearings if the transactions created banks larger than $50 billion in assets.

More Regulators is Better than One.

Big banks love the Trump administration’s idea to merge the country’s major bank regulators, such as the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency, a move that would fall in line with Project 2025’s bolstering of big business’ power. Smaller community banks warn against consolidation, calling for federal regulators to remain “objective, nonpartisan, and protected from political influence, which is essential to promoting a safe and sound banking system, consumer confidence, and a strong national economy.”

Banks and Consumers.

As Trump and Musk illegally dismantle the CFPB, House Financial Services Ranking Member Rep. Waters demands to know how big banks plan to follow consumer protection laws. In a letter to the Financial Services Forum and Bank Policy Institute, she wrote:

Given the Trump Administration’s reckless decision to try to go around Congress to unilaterally ‘delete’ the CFPB, however, they have created an unlevel playing field where community banks and credit unions are being scrutinized for consumer compliance while megabanks are not. That exposes consumers to an untold amount of unchecked harm, so I would encourage your member banks to be transparent about how they are following the law and treating consumers.

Wall Street Wants the Post Office.

According to a Wells Fargo analysis, Commerce Secretary and former Cantor Fitzgerald CEO Howard Lutnik could carve up the United States Postal Service by selling off its profitable package division while burdening taxpayers with employee pension obligations. The banking analysts describe the USPS as "an obvious source of value" and propose raising shipping prices by "30-140%" across product lines, benefiting private competitors like FedEx and UPS. Their strategy includes "monetizing" approximately 7,200 post office facilities and 20,700 acres of land nationwide, while compromising the universal service obligation that ensures affordable six-day delivery to every American address.

CONSUMER

Blocking Rules.

Republicans are intent on blocking a slew of CFPB rules that would help everyday people including the CFPB’s medical debt rule, overdraft fees rule, and larger participants (digital payment app oversight rule). This week, Senate Republicans voted to undo the CFPB’s larger participants rule by a vote of 51-47, and the Republican-led House Financial Services Committee voted to undo the CFPB’s overdraft fees rule that would lower overdraft fees from $35 down to $5.

Said AFR’s Amanda Jackson:

The CFPB was created precisely to enact rules like the overdraft rule to keep a watchful eye on the consumer financial services marketplace and protect families from the whims of big banks and financial predators. The committee did the wrong thing, but the full House should reject this attack on the overdraft rule and prevent Wall Street banks from ripping people off.

Legislation has also been introduced to undo the CFPB’s medical debt relief rule, which would have wiped $49 billion worth of medical debt from 15 million people’s credit reports and alleviated a burden to pay wrongful debt that weighs more heavily on historically marginalized communities.

Senate Republicans Choose Musk Over Everyday People.

Over 110 diverse organizations have joined forces to oppose a Senate resolution that would rescind the Consumer Financial Protection Bureau's oversight rule for digital payment applications. Said AFR’s Patrick Woodall:

The Senate should reject this colossal giveaway to Big Tech that literally enriches Elon Musk and rewards him and his assault on the CFPB, federal workers, and democracy itself. There are few clearer examples of how Musk's ravaging of federal institutions benefits a super-rich person at the expense of everyday consumers, who will face greater ripoffs and fraud.

The coalition warns that approving the Congressional Review Act resolution would exempt technology companies from necessary consumer protections, potentially exposing users to increased fraud, account deactivation issues, and privacy violations while allowing Musk's financial services to operate with minimal regulatory scrutiny. Now that the Republican-led Senate has voted to undo this rule, it is up to the House to side with the nearly 75 percent of people in the US who use digital payment apps, such as ApplePay, Venmo, and PayPal, and make sure these apps are regulated in the same way that banks are.

Zelle in a Handbasket.

The Trump-appointed CFPB leadership dropped its case against digital payment app Zelle, a joint venture between Wells Fargo, JPMorgan Chase, and Bank of America, effectively delivering a pardon to the company for failing to protect its users from fraud and identity theft that cost customers more than $870 million over seven years. Wrote AFR’s Christine Chen Zinner:

“Dropping the Zelle case at the same moment the Senate is voting to eliminate digital payment app protections is a win for Big Tech and Wall Street banks over everyday people. Any time we take out that app to pay for our necessities, we will be on our own.”

Rural Communities Need the CFPB.

The ongoing destruction of the CFPB will disproportionately harm small farmers and rural consumers. A new HEAL Food Alliance report warns that eliminating these protections will have immediate economic consequences, from creating banking deserts and raising overdraft fees to reducing transparency in agricultural lending.

CAPITAL MARKETS

Shareholders’ Rights.

During the 2024 proxy season, shareholders proposed a number of important resolutions – like one calling for a racial equity audit at Walmart and another pushing for the adoption of a living wage policy at Target.

But, lately, shareholder proposals have been under fire from corporations who have sued activist investors, lawmakers who have advanced pro-corporate bills on the Hill, and the SEC who has made it more difficult for shareholder proposals to come to a vote. The Shareholder Rights Group, the Interfaith Center on Corporate Responsibility, and the U.S. Sustainable Investment Forum remind us that shareholder proposals are an essential right that has promoted accountability for corporate wrongdoing, addressed financially relevant environmental and social risks, and served as an important avenue for companies to understand investor concerns.

The Billionaires’ Bill.

Delaware lawmakers are advancing Senate Bill 21, the “Billionaires’ Bill,” a corporate giveaway that lets billionaires like Elon Musk raid company treasuries while stripping investor protections. Secretly drafted by Musk’s lawyers, the bill would gut legal safeguards for pension funds, restrict access to corporate records, and shield executives from accountability.

“Delaware lawmakers should ask themselves whose side they are on: working people like teachers saving for retirement or self-dealing billionaires like Elon Musk. We urge them to side with working people by voting down the Billionaires’ Bill,” said AFR’s Natalia Renta.

Who Will the SEC Fight For?

For nearly two decades, Paul Atkins was a consultant-for-hire that large corporations would parachute in when they needed an “expert” to fight the SEC. Now, Trump has tapped him to lead the agency, which may force him to recuse from some of its ongoing enforcement work.

Last week, Acting Chair Mark Uyeda’s SEC gave Wall Street firms an extra year before they have to comply with rules that were finalized back in December 2023. Firms previously had until the end of 2025 to comply with the provision, which intends to reduce risk in the $26 trillion Treasury debt market by clearing up rules around the transactions’ middlemen (called clearinghouses). Now they have until the end of 2026.

And: As part of the Musk-driven slashing at the federal workforce, the SEC has offered some staff $50,000 to voluntarily resign or retire.

Pension Power.

State and labor officials are fighting federal attacks on public pensions and pushing for stronger investment strategies. In a webinar hosted by AFREF and The Horizon Project, leaders stressed the need to protect pensions and deploy state pension power to grow a strong economy for retirees, workers, and the public. Said the American Federation of Teachers’ Randi Weingarten:

If you looked at [investments] through the sustainability and the American Dream standard, or long-term economic viability for the working class as well as the investment class — then all of a sudden, issues around private equity, issues around climate sustainability, issues around workers being able to make a living wage would be a lot different.

“The stakes are high, and there’s a lot for state policymakers and pension officials to do to both protect public pensions and also to use state pension power to grow a strong economy for retirees, workers, and the public,” said Natalia Renta of AFREF.

Investors Fighting Financial Deregulation.

AFREF and several partners hosted a webinar lowlighting agency attempts to roll back financial regulation – from attempts to allow private equity to expose everyday investors to riskier products, to attacks on shareholder engagement – and educating investors about how they can fight back and promote investor protectors and corporate accountability.

Said Josh Zinner, CEO of the Interfaith Center on Corporate Responsibility: “The SEC and Congress are becoming increasingly hostile to shareholder engagement, ESG investing, and even climate science itself.”

Added the Global Black Economic Forum’s Alphonso David: “We need to stop playing defense and start pushing back. If we don’t challenge these laws now, they will dictate investment decisions for years to come.”

PRIVATE MARKETS

Private Equity and Data Centers.

AFREF published a research memo, Private Equity’s Silicon Gold Rush, analyzing PE’s surging investment in data centers – big warehouses that contain fleets of servers – that put massive amounts of computing power toward artificial intelligence, cryptocurrency, and cloud computing and storage. With at least $170 billion pushed into the sector since 2022, the mass investment is intensifying the longstanding problems with data center operations, such as draining local water sources to cool servers, high and (often under-reported) carbon emissions, acoustic pollution, and increased costs and strain for local electricity ratepayers. In addition, data center projects often receive government subsidies, meaning state and local dollars — taxpayer money — can be supporting the data center investments by wealthy private equity firms.

Said AFREF’s Dustin Duong:

The private equity industry is spending a torrent of money in an exploding sector that is creating significant environmental and financial burdens on communities where these data centers are located. The private equity industry is quietly setting up to reap financial rewards by consolidating a hold on the data center market, but communities must reckon with the negative environmental, economic, and social impacts.

Walgreens.

The Sycamore Partners $10 billion purchase of drugstore chain Walgreens risks disaster for workers and customers, given the private equity firm’s track record. The private equity takeover of retailers has enriched Wall Street by extracting dividends, stripping out real estate, and charging astronomical fees that has driven many chains into bankruptcy, shuttered thousands of locations, cost hundreds of thousands of jobs, and left consumers worse off than before. Said AFR’S Aliya Sabharwal:

Sycamore’s retail takeovers have not turned out well for retail chains, workers, or shoppers. Private equity is well known for looting retailers — hollowing out their value and driving them to bankruptcy. The private equity playbook is good for lining Wall Street executives’ pockets but is bad for workers and the industries they pillage.

Looting America’s Affordable Housing Fund.

Private equity firms are swarming the Federal Home Loan Bank System, a system of banks designed to deliver affordable mortgages to homebuyers-in-need. They’re making billions by diverting the money, through buyouts of insurance companies allowed to access the FHLBs’ government-subsidized loans, from people who need it most.

PE Pay.

Last year, Steve Schwarzman, head of the private equity megafirm Blackstone, pulled in over $1 billion in income. $83.7 million of it came from carried interest, a type of profit that, thanks to an industry-coveted tax loophole, is taxed at a lower capital gains rate instead of as income. It’s a loophole for which private equity is expected to continue fighting to keep.

CRYPTO

Bitcoin Reserve?

Late on Thursday, President Trump signed an order to create a so-called “strategic reserve” of crypto tokens already owned by the government, marking another step of the administration legitimizing a highly volatile sector of finance. The apparent grift and potential conflicts of interest has even some crypto enthusiasts dismayed. Said one: “Call me old fashioned but I don’t think the government should be pumping our crypto bags with taxpayer money while we are running a near $2trn deficit.”

Unstablecoins.

AFR and 23 other organizations raised alarms over two bills – the STABLE Act in the House and the GENIUS Act in the Senate — that attempt to create a new regulatory framework for so-called stablecoins. Even though they’re ostensibly tied to the value of traditional financial assets, stablecoins are far from stable; the groups warn that normalizing them as part of mainstream finance without robust oversight could cause widespread financial harm to investors and the economy. Said AFR’s Mark Hays:

The picture is clear: these bills are nothing but a crypto industry wish list, not an adequate regulatory regime that provides necessary oversight, customer protection, and stability. And, the shortcomings of these legislative efforts are compounded by Elon Musk and the Administration’s collaboration with the crypto industry to eviscerate the ability of federal regulators to provide adequate oversight and consumer protection.

A policy brief from George Washington University’s Arthur Wilmarth echoes the concerns. Wilmarth calls attention to the potential disruption of the banking system and of the flow of credit to “Main Street businesses” while shadow banks are free to exploit private customer data.

Missing the Point.

Lawmakers in the Senate and Republicans on the House Ways and Means Committee voted to repeal a Biden-era rule that directed crypto (and other decentralized finance) brokers to collect certain information from their customers and report digital asset transactions to the IRS, shining a light into an opaque sector of finance. Proponents of the rules argued that overturning them would only help tax evasion, and other forms of illicit finance, including drug and human trafficking.

Not for Consumers.

The crypto exchange Coinbase is cheering the destruction of the Consumer Financial Protection Bureau, especially as its customer complaints to the agency near 8,000, with more complaints online.

Dropping Investigations.

The Republican-controlled SEC has reportedly dropped its investigation into the crypto exchange Uniswap Labs, in what the firm touts as a “win” for decentralized finance. Last year, the agency put Uniswap on notice that it was preparing charges for alleged violations of federal securities laws.

Memecoins Don’t Count.

The SEC claims that memecoins – highly volatile crypto tokens based on Internet in-jokes – aren’t protected by the agency’s rules. Fun fact: over 800,000 wallets that invested in Trump’s memecoin $TRUMP have collectively lost $2 billion in value since investing in the coin, while wallets linked to the coin’s issuers have earned over $300 million.

HOUSING

A Threat to Affordable Housing.

This week, a group of 122 House Democrats delivered a letter to Department of Housing and Urban Development Secretary Scott Turner demanding information about “questionable staff terminations, stop-work orders, funding cancellations, and the role of private corporations” amid Musk’s purge of the agency that oversees affordable housing. Rep. Waters sought an emergency hearing with Turner regarding the administration’s plans to dismantle the department. Late last month, an internal memo indicated that HUD’s budget could be cut by as much as half, a move that staffers say is “likely to upend housing markets, make homes less affordable and roil mortgage transactions.” Meanwhile, Musk’s minions – operatives from the housing industry – were accessing highly confidential records on housing discrimination, medical details and even domestic violence, according to ProPublica.

At the same time, the Trump administration planned to halve the workforce at the Federal Housing Administration, the agency that provides mortgage insurance to people who couldn’t afford a downpayment or have below-average credit scores. The Urban Institute warns that the cuts would “likely disrupt the housing industry,” especially as delinquency rates among certain loans have markedly increased.

Senate Democrats want answers from Turner on how the plans to re-privatize Fannie Mae and Freddie Mac, the government-backed mortgage provider, would boost housing prices and enrich wealthy investors at the expense of prospective homebuyers.

And: Trump’s tariffs on Canadian and Mexican imports are expected to make homes even more unaffordable. Analysts indicate that prices on new homes could rise by as much as $22,000.

Overturning a Fair Housing Rule.

The Trump administration revoked a Biden-era Affirmative Furthering Fair Housing proposed rule requiring localities to track and address segregation patterns to receive federal funds. The proposed rule, first introduced under the Obama administration and scrapped by Trump in 2020, was never finalized by Biden. HUD replaced it with an interim rule allowing local governments to return to the pre-Obama standard of self-certifying their compliance with fair housing laws.

Bill Pulte.

Bill Pulte, the White House nominee to lead the Federal Housing Finance Agency (FHFA), has disclosed a net worth of at least $200 million, though his actual wealth is likely higher. His holdings in Pulte Capital LLC and Mullett Holdings LLC each exceed $50 million, according to his financial disclosure form. As FHFA chief he would oversee Fannie Mae and Freddie Mac, the two government-controlled mortgage giants that back nearly half of U.S. residential loans. His nomination comes as the Trump administration considers efforts to privatize the companies.

AFR and 17 other groups oppose his nomination.

HOPE Over Hedge Funds.

Sen. Jeff Merkley and Rep. Adam Smith introduced the Humans Over Private Equity (HOPE) for Homeownership Act, a bill they hope will end “the harmful practice of hedge funds buying up single-family homes.” The lawmakers cited reports that large investors owned about 700,000 single-family home rentals nationwide. The legislation seeks to establish tax penalties, take away certain tax breaks, and impose a tax on hedge funds, private equity firms, and other corporate landlords that don’t sell off their single-family homes every year over a ten-year period. Said AFR’s Caroline Nagy:

Our housing market needs to work for U.S. families, not hedge funds. Unfortunately, private equity firms and other corporate landlords, flush with cash, have unfair advantages over first-time homebuyers who are struggling with sky-high home purchase prices and high interest rates. The HOPE for Homeownership Act will keep corporate landlords from gobbling up even more of our housing stock while giving a leg up to people who actually want to live in the homes they buy.

CLIMATE and FINANCE

The Insurance Disaster.

Insurance companies are raising rates, denying claims, and dropping policies while raking in profits as climate disasters worsen. Homeowners in wildfire, hurricane, and storm-prone areas struggle with skyrocketing premiums, delayed payouts, and denied claims, often forcing them into more expensive state-run plans. In Los Angeles, Louisiana, Florida, and Hawaii, families wait months or years for insurance settlements after disasters. Writes AFR’s Kelsey Condon:

[Insurers] accumulate wealth and pay dividends to shareholders with money generated by the premiums paid by working people — who don’t get a refund when there aren’t disasters. This is a feature, not a bug. The system is working as designed by and for the industry.

Our elected officials let this crisis fester by failing to hold insurers accountable. The industry’s model of profiting in good times and walking away in bad cannot stand. Insurance should be a safeguard for families, not a gamble where the house always wins.