The People Fight Back Against a Billionaire-Oligarch’s Plan to Destroy the CFPB
A few years ago, the events of the past two weeks would have made for the foundation of a pulpy dystopian novel – but it’s the Consumer Financial Protection Bureau’s reality.
It’s an agenda “to let billionaire-oligarchs reign unchecked over us,” in the words of Americans for Financial Reform’s Patrick Woodall.
Fewer agencies provide as stark a case of the executive branch’s hostile intervention than the plight of the CFPB, the watchdog that has returned $21 billion to consumers and helped 205 million people.
Since the so-called Department of Government Efficiency entered their offices earlier this month, the president appointed one of the authors of Project 2025 Russell Vought as the agency’s new head. Since then, Vought has engaged in illegal mass purges of employees (“deregulation by firings”), shut down its website home page, canceled contracts, and halted enforcement and supervision. AFR’s Christine Chen Zinner characterizes the layoffs as something that “will only empower Wall Street and predatory financial companies that can now rip people off with greater impunity.” Former employees sounded the alarm on tech billionaires driving the agenda against regulating their companies. After all, the CFPB is the agency that wants to treat Big Tech financial actors like their traditional bank counterparts, and Elon Musk is trying to make X an “everything app,” including by launching a payment platform on the social media app that would fall under the CFPB’s jurisdiction.
Also: One of Trump’s latest hires for the CFPB is former Department of Justice lawyer Jeffrey Clark, previously indicted as part of the president’s attempt to overturn the 2020 election.
Happily, there’s been pushback at every level.
On Valentine’s Day, a federal judge temporarily blocked the mass firings at the CFPB.
Sens. Warren and Schiff have called into question Musk’s conflict of interest (and Warren wants to hear about it from Musk himself)
Rep. Waters has railed against Vought’s plans to destroy the agency.
Advocates have filed a litany of lawsuits and legal actions against the deregulatory regime, like the National Treasury Employees Union’s suit against Vought, the American Federation of Government Employees’ suit against DOGE and the Office of Personnel Management, the City of Baltimore’s case against Vought (in which 23 state attorneys general filed an amicus brief against the Trump administration), and even an 83-year-old pastor.
Those employees and many more rallied outside the CFPB.
Media outlets across the nation, from the Associated Press to TIME, to writers in New York, Chicago, Lexington, and Los Angeles, remind everyone that consumers rely on the CFPB.
Veterans and small business owners have written in to save the CFPB.
Influencers are making Instagram videos about the CFPB’s good work and workers.
It makes sense: billions of dollars are on the line for average, everyday people.
Even the industry is nervous about a world without the CFPB. A corporate lawyer warns that in the “medium term,” companies can expect “chaos and uncertainty.” The Open Banker warns that the deletion of the CFPB would create a vacuum that would disrupt business across the entire economy. One bank CEO is concerned that losing the CFPB would mean losing some level of “predictability and stability.”
The taking-apart of the CFPB is just one part of a wider plan to subvert the independence of critical agencies. Said AFR’s Patrick Woodall:
“President Trump’s power grab subverts the rule of law and will allow political cronies and billionaire insiders to directly shape important regulatory decisions in their own interests. This is a recipe for allowing billionaires and corporate insiders to write rules that favor themselves at the rest of our expense.”
BANKING AND FINANCIAL STABILITY: Capital Rules – One vs. Seven – Aid in the Hands of Industry – Dodgy DOGE – Capital One/Discover
CONSUMER: Dropping SoLo – Public Supports Student Loan Safety
CAPITAL MARKETS: DOGE vs. the SEC – Treasury Market Rule – Delaware Debacle
PRIVATE MARKETS: Taxes & PE – PE and Healthcare – DOGE Follows the PE Playbook – Small Investors – A Conflict of Interest – How Much Bigger?
CRYPTO: The Bybit Hack – The Next Financial Meltdown? – Unstablecoins – Binance Backslide – Coinbase Cave – Who Owns Crypto? – Banking on Crypto – Crypto in the Oval Office – Crypto at the CFTC – Crypto’s Smoke and Mirrors
HOUSING: Disaster Relief – Impossible Mortgages – Philly’s Eviction Solution
CLIMATE AND FINANCE: The Insurance Implosion – Going After Climate Funds – Trump on the Side of Polluters
Feedback? Reach us at afrnews@ourfinancialsecurity.org
BANKING AND FINANCIAL STABILITY
Capital Rules.
Sen. Warren and Rep. Waters asked Chair Powell to explain why the central bank would “surrender” to big bank lobbyists by finalizing a version of capital rules that could weaken stress tests and “come back to haunt families, small businesses, and the economy, increasing the likelihood of another Wall Street-driven economic collapse.”
One vs. Seven.
Ahead of Trump’s inauguration, Fed Vice Chair for Supervision Michael Barr – who, among other things, commissioned a review of Silicon Valley Bank’s collapse and worked on drafting (then diluting) capital rules – announced his imminent resignation, slated for the end of February. Just a couple of weeks before his colleague steps down, Fed Chair Jerome Powell questions whether Barr’s position is necessary moving forward. The central bank chief suggested moving the regulatory responsibility to the seven-person Fed board, raising concern that turnover in the one-person gig could increase “volatility” in banking policy. But the Vice Chair for Supervision was created by the Dodd-Frank Act over a decade ago precisely because the board dropped the ball in the run-up to the financial crisis.
Meanwhile: Trump officials are considering a merger of the Federal Deposit Insurance Corporation (FDIC) and the Treasury’s Office of the Comptroller of the Currency, a plan that would likely result in “significant cuts” to the departments. Such a move would undermine regulators’ ability to insure deposits and monitor risks at any of the 4,500 banks across the country.
Aid in the Hands of Industry.
Since DOGE dismantled the U.S. Agency for International Development (USAID), Trump’s transition team has considered moving the billions of dollars of funding for foreign aid from USAID to the US International Development Finance Corp. Created during the first Trump administration, the IDFC uses taxpayer money to make private-sector investments overseas, including planned investments in Greenland. And the agency is due to be helmed by the son of the founder of private equity megafirm Apollo, himself a private equity mogul.
Dodgy DOGE.
Earlier this month, DOGE got into the Treasury’s payments system, which doles out federal funding on behalf of the entire government. Last week, the leaders of the Senate Banking Committee demanded to know why Trump-appointed Treasury Secretary Scott Bessent misrepresented the type of access granted to DOGE. The agency granted DOGE agents – including a 25-year-old programmer who later resigned after some racist social media posts surfaced – the ability to modify code, suggested that DOGE was conducting a review when it was actually implementing a funding freeze, and had staff “bending over backwards to accommodate a highly unusual arrangement.”
Capital One/Discover.
New York and California attorneys general are weighing an antitrust lawsuit to block Capital One’s $35.3 billion takeover of Discover Financial, citing competition concerns. The deal, announced a year ago, remains under federal regulatory review. With scrutiny mounting at both state and federal levels, the companies have pushed the closing date to May 19, as officials could decide on legal action as early as this month.
CONSUMER
Dropping SoLo.
Last Friday, Vought’s CFPB dropped its enforcement action against SoLo Funds, an online fintech lender that duped over 500,000 of its customers into paying fees in the form of “tips” and “donations” after marketing their loans as zero-interest loans. SoLo’s shady practices had been targeted in a number of states, with state law enforcement actions against the predatory fintech in California, D.C., Connecticut, and Pennsylvania. Vought further defended the agency’s actions in a tweet that clearly casts the Trump administration as siding with this payday fintech over everyday consumers who were tricked into high-cost loans that carried the equivalent of APRs in excess of 300%, with some over 1,000%.
From AFR’s Christine Chen Zinner: “The Trump-Musk crowd has sided with the powerful fintech predators and not the people who have been cheated and scammed and is sending a clear message that fintech predators have a green light to rip off their customers.”
Public Supports Student Loan Safety.
Polling from the Student Borrower Protection Center (SBPC) found that the vast majority of voters are against a Republican-led effort to slash programs like the federal student loan initiative and are strongly in favor of preserving student borrower protections.
CAPITAL MARKETS
DOGE vs the SEC.
Next on DOGE’s hit list is the Securities and Exchange Commission (SEC), where it is expected to “to cut contracts, access internal data, fire probationary employees and fellows, and otherwise halt agency work,” as it has done at other federal agencies. Letting Musk into the SEC raises stark conflicts of interest concerns, as Musk is the subject of an SEC lawsuit that alleges he amassed shares of Twitter without properly disclosing this ownership before his takeover, allegedly underpaying by at least $150 million at the expense of Twitter shareholders.
Treasury Market Rule.
Now under Mark Uyeda, the SEC has given up an attempted appeal of a federal court’s decision to overturn its dealer rule, a proposal that would have put high-frequency trading firms under greater SEC scrutiny. Without it, hedge fund managers don’t have to comply with the terms of registration, possibly leaving their investors in the dark and putting market stability at risk.
Delaware Debacle.
Last Monday, Delaware lawmakers proposed significant amendments to the state’s corporate law through Senate Bill 21, which would dramatically curtail shareholders’ ability to hold conflicted directors and executives accountable for self-dealing. This bill was drafted in secret and far outside the usual procedure for formulating changes to the state’s corporate law, which governs around two thirds of the corporations in the S&P500. Notably, a Delaware judge last year ordered Elon Musk's $56 billion pay package from Tesla to be rescinded.
PRIVATE MARKETS
Taxes & PE.
A new report from AFREF, Americans for Tax Reform and the Private Equity Stakeholder Project, Private Equity, Public Damage, scrutinizes how the tax code makes the industry more profitable and wealthy PE owners even richer – at the expense of the vulnerable communities, homeowners, public employees and environmental activists they exploit. Eight people at the helm of Blackstone and KKR saved a collective $335 million in taxes over a five-year span, the authors indicate. Said AFREF’s Oscar Valdés Viera:
“The private equity industry exploits tax breaks and loopholes to extract wealth from workers and communities. The industry’s playbook for stripping companies for profit is subsidized by a tax code that rewards their predatory tactics. This rigged system distorts the broader economy, incentivizes speculation over real investment, entrenches systemic inequality, and exacerbates the racial wealth divide—all while private equity billionaires pocket massive publicly-subsidized gains.
One of these tax oversights is the carried interest tax loophole, which enriches private equity executives. Instead of treating the PE firm’s management earnings as income, the profit is regarded as capital gains and is taxed at a lower rate, effectively halving the firms’ tax bill and boosting executive pay. Now, for the first time, BlackRock has awarded head honcho Larry Fink a carried interest incentive, signalling that “banks and asset managers have started to emulate private equity practices.”
The connection between traditional financial institutions and private equity runs deeper than just aping behaviors: A paper from the Boston Fed estimates that large banks have committed approximately $300 billion in loans to private equity and private credit, about 14 percent of their total commitments to all nonbanks. Last week, the Fed put out a risk assessment, exploring credit and liquidity shocks among nonbanks and warning that market shocks could cause “unexpected defaults” among a bank’s “five largest equity hedge fund counterparties.”
And regulators have tried to see how deep the ties run. The FDIC directed lenders to specifically disclose their year-end exposure to different types of shadow banks on a “best-efforts basis.” JPMorgan’s supposed best effort was listing all of the $133 billion in loans it made to nonbanks in an “other” category.
PE and Healthcare.
Editor-in-Chief of the Johns Hopkins News-Letter reminds everyone that the private equity takeovers of the healthcare system “are emblematic of the ills of the American health care system, not the cure.”
DOGE Follows the PE Playbook.
Megan Greenwell, author of the upcoming book Bad Company: Private Equity and the Death of the American Dream, notes that Elon Musk’s DOGE bears a striking resemblance to the private equity model: “Random people you’ve never seen before start walking around your office and start asking the dumbest questions possible.” Eventually, she says, things “just tend to stop working,” as detached executives make changes with no “systemic thinking [and]...no larger plan.” Ultimately, private equity profits while the company fizzles out of existence – hopefully not the case with the vital government agencies being invaded by DOGE.
Small Investors.
Private equity is trying to court retail investors in an attempt to tap into the estimated $137 to $147 billion held in the hands of average, non-professional investors. The Hoover Institution’s Amit Seru warns that diving into the retail market would lead to liquidity pressure and short-term demands which, without proper guardrails, could make market instability worse. And the industry’s opacity doesn’t square with the demands of regulations like the Employee Retirement Income Security Act (ERISA), which requires disclosures to protect investors.
A Conflict of Interest.
A court in Delaware ruled that a private equity megafirm’s decision to trigger a fire sale of one of its portfolio companies was somehow not a conflict of interest, despite the firm having owned over 50 percent of the company’s stock. Plaintiffs in Manti Holdings, LLC v. The Carlyle Group, Inc. alleged that Carlyle, the PE owner of the Authentix Acquisition Company, breached fiduciary duty when it rapidly sold off parts of the company to another private equity firm. Carlyle had a controlling stake in the company and the majority of the board was “not independent of Carlyle,” yet the court found no “disabling conflict of interest.”
How Much Bigger?
More and more private equity firms are struggling to raise funds for overambitious investment vehicles (one of the reasons they are targeting people’s retirement accounts), and high rates have made it harder for them to exit existing investments to deliver returns to their clients without resorting to sketchy financial engineering tactics. And the largest firms are beginning to make up a vast proportion of fundraising. In 2024, 59 percent of total private-markets fundraising was done by the top six megafirms – Apollo, Blackstone, Ares, KKR, Carlyle and Brookfield.
CRYPTO
The Bybit Hack.
In what appears to be the largest, single-platform hack ever, attackers stole $1.4 billion worth of Ethereum-based tokens from a wallet belonging to a DAO (decentralized autonomous organization) controlled by crypto exchange Bybit. The hackers are suspected to be associated with a North Korean group, Lazarus, which has previously been accused of diverting stolen funds to the country’s nuclear program.
The Next Financial Meltdown?
The Trump-Musk co-presidency is promoting a cryptocracy that could crash the economy. Recent regulatory rollbacks, including the weakening of the Consumer Financial Protection Bureau and the departure of SEC Chair Gary Gensler, could accelerate the mainstreaming of cryptocurrency, increasing the risk of financial instability. As crypto becomes more interconnected with traditional finance, concerns about contagion grow. The New York Fed has warned that investors are leveraging loans from banks to make high-risk crypto bets, while the Treasury’s Office of Financial Research has observed a rise in auto and mortgage loans in areas with high crypto ownership. Without regulatory guardrails, a downturn in digital assets could trigger broader economic fallout.
Unstablecoins.
An early draft of the Republican-led stablecoin bill is “light on consumer protections,” according to a statement from House Financial Ranking Member Rep. Maxine Waters. Last week, after her Republican colleagues released an overly permissive bill that would heighten risks to consumers and the broader system, Waters unveiled her own stablecoin legislation which she says builds upon progress made with former Chair McHenry last Congress.
Speaking of stablecoins: The co-founder of Tether, a stablecoin issuer previously investigated by federal authorities over possible violations of anti-money laundering and sanctions rules, has thrown his weight behind a new stablecoin project: the Pi Protocol, intended to be backed by yield-bearing assets like bonds.
AFR’s Mark Hays breaks down some of the dangers associated with stablecoins — like over-concentration among private actors, contagion risk, consumer risks and custody risks — in a new blog:
The same cryptocrats and DOGE bros that are assaulting the foundation of democratic governance are demanding this stablecoin bill as the price of their fealty to the Trump administration. Locking in stablecoin policy is a prerequisite for future crypto industry giveaways. Supporting these stablecoin bills as introduced rewards these tech broligarchs and paves the way for even more extractive and perilous crypto measures that will pose even greater risks to consumers, community, and the economy as a whole.
Binance Backslide.
The SEC, now led by Trump-appointed Chair Mark Uyeda, has asked the federal court overseeing its civil case against Binance to pause proceedings. Under Gensler, the agency found that Binance and its founder, Changpeng Zhao, inflated trading volumes, diverted customer funds and misled investors. Zhao was later sentenced to prison time.
Coinbase Cave.
In a win for the industry, the SEC has moved to drop its case against the cryptocurrency exchange Coinbase, which it filed in 2023 on the grounds that the company was operating an unregistered securities exchange. The SEC surrender signals a hands-off approach to crypto that gives a green light to the industry’s scammiest actors.
Who Owns Crypto?
When the crypto firm Coinbase disclosed its quarterly financials this month, $538 billion of its assets and liabilities vanished from its previous reporting. The Wall Street Journal questions: “Who ultimately owns those digital assets?... If Coinbase went bankrupt, the bitcoins and other tokens held on behalf of customers could be considered the property of the bankruptcy estate, and such customers could be treated as unsecured creditors.”
Banking on Crypto.
Traditional banks are anticipating Trump’s support of the crypto industry to trigger a wave of IPOs, share sales ,and convertible bonds, looking to deepen their relationship with a volatile corner of finance rife with bad actors.
Crypto in the Oval Office.
Trump is bringing crypto further into the mainstream, exposing more Americans to its risks. His $TRUMP memecoin lured in first-time investors before crashing, a preview of what could happen on a larger scale. Meanwhile, his plan to shift oversight from the SEC to the weaker CFTC signals looser regulations, making it easier for scams to flourish and for banks to sell crypto-backed investments to everyday consumers. His push for a national Bitcoin stockpile could further entangle the government in crypto’s volatility, turning the next crash into a broader financial crisis.
Related: Argentinian President Javier Millei also tried promoting a crypto memecoin, LIBRA, which surged, then promptly crashed. He’s now facing the possibility of impeachment, as details emerge about the token’s co-creator bragging about “buying access to Argentine President Javier Milei's inner circle.”
Crypto at the CFTC.
Trump’s pick to head up the Commodity Futures Trading Commission, Brian Quintenz, has raised a “clear and present conflict-of-interest problem,” says the Project on Government Oversight.
Crypto’s Smoke and Mirrors.
Congressional Republicans are using the red herring of so-called crypto debanking as a smokescreen to shield crypto firms from scrutiny and court wealthy industry donors. The 2022-2023 crypto crash wiped out $2 trillion, exposing rampant fraud and mismanagement at firms like FTX, Terra/Luna, Voyager, and Celsius. But instead of addressing the industry’s systemic failures, crypto-backed lawmakers are pushing a false narrative that regulators unfairly targeted digital asset firms to justify gutting financial safeguards.
The goal is clear: strip banking regulators of oversight and force banks to service crypto firms, no matter the risks. This push is fueled by hundreds of millions in industry lobbying and mirrors the tactics of Wall Street before the 2008 crash. Said AFR’s Mark Hays: “The crypto bros aren’t looking for fair access to banking—they’re looking for a backdoor to embed their risky, fraud-ridden industry into the mainstream financial system.”
HOUSING
Disaster Relief.
The Trump administration is trying to cut critical resources from the U.S. Department of Housing and Urban Development (HUD), including by axing staff and funds from its fair housing and disaster relief programs. Writes the Consumer Federation of America’s Sharon Cornelissen:
HUD staffers have done so without much support and on public sector salaries – a far cry from the salaries Elon Musk pays to tech bros – but with a dedication to making a difference for American families and communities…Now the Trump Administration seeks to further eviscerate this agency, in the middle of a deep housing crisis that they claim to care about. It is entirely unclear how cutting HUD in half will help lower rents, build more housing, or help a younger generation become homeowners too.
Impossible Mortgages.
Fed Chair Powell predicts that, amid the growing property insurance crisis, there will be a time when mortgages will be impossible to get in certain parts of the country that are more susceptible to extreme weather events, even as home prices continue to rise beyond untenable levels.
Philly’s Eviction Solution.
Philadelphia’s Eviction Diversion Program has helped cut eviction filings by 37% compared to pre-pandemic levels, keeping more renters in their homes. The program requires landlords to negotiate with tenants before filing for eviction, often leading to payment plans or repairs instead of displacement. Housing counselors help broker these agreements, preventing unnecessary evictions and improving landlord-tenant relations.
Despite its success, demand for rental assistance exceeds available funding, leaving many tenants at risk. The Targeted Financial Assistance program, which provides up to $3,500 for back rent, no longer stretches as far as it once did. Advocates are urging Mayor Cherelle L. Parker to expand funding in the next budget to ensure that more renters can stay housed and landlords receive timely payments. Said Councilmember Jamie Gauthier: “We can’t let bureaucracy be the reason someone loses their home.”
CLIMATE and FINANCE
The Insurance Implosion.
In California, State Insurance Commissioner Ricardo Lara approved a $1 billion bailout of the FAIR Plan to cover over 3,400 claims from the Los Angeles wildfires. Under the deal, private insurers will pay just over $500 million, while homeowners statewide will foot the rest through insurance policy assessments—regardless of where they live or if they can afford it. Consumer advocates warn this could be illegal, as insurers are statutorily required to cover these costs.
Meanwhile, private insurers like State Farm continue raking in profits, even as they drop customers and raise premiums. Many also finance fossil fuels, fueling the climate disasters that are making insurance unaffordable in the first place. Said Caroline Nagy of AFREF: “Insurers should cover these losses out of their exorbitant profits, not force regular families to bail them out.”
Going After Climate Funds.
Earlier this month, a federal prosecutor chose to resign instead of bowing to pressure to launch a probe into climate-related funds already allocated to vetted recipients across the country from a law passed in 2022. Senators say that the prosecutor’s higher-ups “demonstrate a gross abuse of prosecutorial authority” for pushing her to do it. The Trump administration has also placed the director in charge of those funds, a 27-year career employee of the Environmental Protection Agency, on administrative leave without stating a justification.
Trump on the Side of Polluters.
SEC Acting Chair Mark Uyeda has requested that the 8th Circuit halt litigation of the agency’s climate transparency rule in light of his and Commissioner Peirce’s opposition to the rule and President Trump’s anti-regulatory order, placing the administration on the side of corporate polluters. Said AFR’s Alex Martin:
Acting Chair Uyeda claims his views were informed ‘by many comments on all sides,’ but he clearly ignored the hundreds of comments from investors who provided near unanimous support for the rule. Instead, he cites comments from the fossil fuel-aligned Chamber of Commerce and the National Association of Manufacturers. There is no doubt: climate change is already affecting companies’ bottom lines. The question that remains is whether or not the SEC will remain a fully independent, federal agency and uphold its mandate to protect investors, especially working-class people with 401ks and pensions, or put their life savings at risk to insulate corporate polluters.