Vidostream | News, sport and opinion from the Vidostream's US Edition

https://vidostream.com

Elon Musk calls to ‘delete’ US finance consumer watchdog agency

Tech billionaire tapped by Trump posts on X about wanting to eliminate Consumer Financial Protection Bureau (CFPB)

Elon Musk listens as Donald Trump addresses House Republicans in Washington DC, on 13 November 2024. Photograph: Allison Robbert/Reuters

Elon Musk listens as Donald Trump addresses House Republicans in Washington DC, on 13 November 2024. Photograph: Allison Robbert/Reuters

Elon Musk has said he wants to “delete” the Consumer Financial Protection Bureau (CFPB), a federal watchdog that helps protect consumers from predatory financial practices.

The tech billionaire, who has been tapped to run a “Department of Government Efficiency” in the incoming Donald Trump administrationposted “Delete CFPB” on X, the social media site he owns. He added a declaration that the agency, which employs 1,700 people and has an annual budget of close to $700m, is an example of “too many duplicative regulatory agencies” in Washington.

The CFPB is an independent watchdog agency with oversight over banks and other financial institutions, created after the financial crash of 2008 and charged with overseeing consumer protection in the industry.

Musk’s post came in response to a recent podcast clip from the venture capitalist Marc Andreessen, a significant Trump donor, who said the agency’s primary purpose is to “terrorize financial institutions”.

But it was soon reported that Andreessen’s venture capital firm, Andreessen Horwitz, was among other investors who had backed LendUp, an online consumer payday lender, that was shut down by the CFPB in 2018.

The CFPB director, Rohit Chopra, said the company’s lending operations were shuttered “for repeatedly lying and illegally cheating its customers”.

Trump announced a plan for Musk and fellow entrepreneur Vivek Ramaswamy to run a new advisory agency, known by the acronym Doge, earlier this month. Musk has said he would like the newly formed commission to cut $2tn from federal government running costs – approximately a third of all government spending.

Trump has said Doge and its new “efficiency” tsars would “provide advice and guidance from outside of Government” to “restructure Federal Agencies”.

Ramaswamy and Musk – whose X bio is now headlined: “the people voted for major government reform” – outlined plans for a “drastic reduction” in regulations and “mass head-count reductions” last week in the Wall Street Journal.

The men said they would rely on two recent US supreme court rulings that limited the authority of federal regulatory agencies to “liberate individuals and businesses from illicit regulations never passed by Congress”.

They said Doge would target more than $500bn “authorised by Congress or being used in ways that Congress never intended”, including $535m in funding for public broadcasting, $1.5bn in grants to international organisations and nearly $300m given to progressive groups including Planned Parenthood.

DOoge would also carry out audits of government contracts to “yield significant savings” and “identify the minimum number of employees required at an agency for it to perform its constitutionally permissible and statutorily mandated functions”.

“Critics claim that we can’t meaningfully close the federal deficit without taking aim at entitlement programs like Medicare and Medicaid, which require Congress to shrink,” they wrote, referring to the healthcare programs covering more than 150 million Americans.

How far Ramaswamy and Musk will be able to influence cuts to federal programs and spending before running into legislative opposition is yet to be determined. Many have warned them that cutting bureaucracy is difficult and time-consuming.

On Wednesday, Musk asked in a poll on X what should happen to the budget for the Internal Revenue Service (IRS), the agency responsible for collecting federal taxes. The most popular result was to have its budget “deleted”. He later replied positively to a post that called for the IRS itself to be audited by Doge.

But dismantling the CFPB would be a signal of broader plans for disruption. The agency was formed after the financial crash of 2008, which was caused by insecure or predatory lending to “subprime” mortgage borrowers.

Safeguards to prevent a repeat of the disaster included regulatory financial reforms and the formation of CFPB. The agency reports that its work has resulted in over $20.7bn in compensation, cancelled debt and other forms of monetary relief for consumers and has requested responses from companies involved in more than 5.6m consumer complaints.

It has also drawn the attention of the conservative policy blueprint known as Project 2025, which called for CFPB to be abolished.

“The CFPB is a highly politicized, damaging, and utterly unaccountable federal agency. It is unconstitutional,” the document said. “The next conservative President should order the immediate dissolution of the agency”.

Musk last week also posted on social media naming several specific people and jobs that he aims to eliminate, targeting relatively obscure posts and otherwise unknown government employees.

“These tactics are aimed at sowing terror and fear at federal employees,” said Everett Kelley, president of the American Federation of Government Employees, which represents more than 800,000 of the 2.3 million civilian federal employees, told CNN. “It’s intended to make them fearful that they will become afraid to speak up.”

Author: Editors Desk, Edward Helmore in New York

Source: The Guardian

We are using cookies to give you the best experience on our website. By continuing to browse, you are agreeing to our Cookie Policy.
You did not use the site, Click here to remain logged. Timeout: 60 second