The fate of the CFPB and why we should care

Diane Rehm: On My Mind

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🗓️ 27 February 2025

⏱️ 36 minutes

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Summary

On February 7, billionaire Elon Musk posted a message on his social media platform X: “CFPB RIP,” along with a tombstone emoji.

In the days that followed, the workings of the government’s financial industry watchdog created in the aftermath of the 2008 financial crisis essentially ground to a halt.

More than a hundred and fifty employees were let go, with more layoffs expected. Donald Trump has explicitly said he wants to get rid of the agency. And when you try to access the CFPB’s website, you get an error message.

So, can the Trump administration actually kill the CFPB? Mallory SoRelle says no.

SoRelle is an assistant professor of public policy at Duke University and author of “Democracy Declined: The Failed Politics of Consumer Financial Protection.” She explains that only Congress can shutter the agency. But, she adds, the actions the Trump administration have taken so far are “fundamentally shifting the playing field in favor of the financial industry and away from consumer protection.”

SoRelle joins Diane on this week’s episode of On My Mind to talk about the history of the Consumer Financial Protection Bureau and what would happen if it went away.

Transcript

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0:00.0	Hi, it's Diane. On my mind, the fate of the Consumer Financial Protection Bureau.
0:13.0	Earlier this month, billionaire Elon Musk posted a message on X, C-F-P-B-R-I-P-P.
0:25.7	In the days that followed, the agency is essentially ground to a halt.
0:31.7	More than 150 employees have been let go with more fireings expected. Donald Trump has explicitly said he wants to get rid of the agency. And when you try to access the CFPB's website, you get an error message.
0:51.3	That is fundamentally shifting the playing field in favor of financial
0:56.3	industry and away from consumer protection. That's Mallory Zarell. She's an assistant
1:03.3	professor of public policy at Duke University and author of Democracy declined. The failed politics of consumer financial protection.
1:16.7	Mallory, take us back to 2008 and the circumstances that caused the CFPB to be created.
1:29.3	In 2008, we experienced a global financial crisis that was the largest, certainly in the United States, since the Great Depression.
1:39.3	And one of the concerns that policymakers had is that part of that financial crisis was precipitated by predatory lending, particularly in the mortgage market, but really across all different types of credit and lending.
1:54.8	And so Congress in 2010 passed the Dodd-Frank Wall Street Reform Act, which did a number of things to try and address issues
2:02.6	to help prevent a future financial crisis.
2:05.6	But one of the most significant was it created the Consumer Financial Protection Bureau, or the CFPB.
2:11.6	And what the CFPB did was it was designed to be a consumer watchdog.
2:18.6	So it is an agency designed specifically to protect the interest of consumers' finances.
2:26.3	And that's important because prior to the CFPB, while we had a lot of different financial regulators,
2:33.4	none of those regulators were tasked specifically and primarily
2:37.4	with looking out for Americans' finances.
2:41.0	Instead, those existing regulators were tasked with looking out for the profitability
2:45.6	and soundness of banks.
2:48.8	And so during that 2008 financial crash, as it was, millions of people lost money.
3:01.7	Ordinary individuals lost money from the banks, but the banks did what?
	...

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