It seems that the government keeper may be on a chain, and some experts are concerned about what this can mean this for financial protection.
The Bureau of Consumer Financial Protection, a government agency that oversees consumer financial services and products, was ordered to stop all work -related activities. The newly appointed Acting Director, Russell You, stopped the agency's funding and sent is -lod This weekend told staff not to issue new rules and stop all investigations.
The home page of the web site of Consumption.gov Error message shown 404. The presence of the Social Media Agency was deleted after the Ministry of Efficiency of the Government, led by billionaire Elon Musk, gained access to CFPB systems.
In the past, President Donald Trump has been publicly critical of CFPB and has been trying to limit the power of the agency to his first term.
The Bureau was originally created on the eve of the 2008 financial crisis with Mission of “implementing federal financial laws on consumers and consumer protection”. As of December 2024, the CPB announced that it had recovered up to $ 21 billion in compensation, debt cancellation and other forms of facilitation for US consumers.
Democratic Senator Elizabeth Warren, one of the founders of the FPB, warned in A. press release That because the agency was created by an act of Congress, the Trump administration cannot legally eliminate it.
But with the financing stifled and the staff is not allowed to work, CFPB is essentially dismantled. What can it mean to consumers?
“In the short term, CFPB has a mechanism for submitting complaints to financial products or services, and companies will usually respond in 15 days,” said a credit card expert and personal finance Asoneyson style. “But now it is unclear whether this mechanism is still working. In the long run, it is also unclear how companies will respond without supervision or supervision. “
Realleye break down how the disassembly of the desk can affect you and your finances.
Why is there a CFPB?
CFPB began in 2011 as an independent agency for the implementation of financial regulations and guards. Authorized by Law on Reform and Consumer Protection Dodd -Frank Wall StreetCongress founded the independent bureau for resolving financial regulatory failures, which were accused of bringing to a mortgage crisis and a subsequent major recession in 2008.
In addition to overseeing financial regulations, CFPB investigates consumer complaints in unfair or fraudulent financial products or services and offers the financial education and resources facing the public.
During its 14-year history as an independent agency, the CPB has often drawn the anger of Republican politicians and the financial industry who challenged the executive power of the Bureau of Court. In June 2020The Supreme Court ruled that the president could remove the Director of the CPB for no reason, but that the agency and its funding were protected by laws that could be abolished only by the legislative branch. A 2024 Supreme Court judgment He confirmed the constitutionality of the bureau's funding structure.
What happens if CFPB is eliminated?
Even if CFPB cannot be legally eliminated, preventing the work of the Bureau can still have an impact on consumers relying on the agency to protect them from fraud, financial abuse and predatory lenders.
Rich Dubois, CEO of the National Legal Consumer Center, condemned the Trump administration's decision to prevent the work of the FCB.
“Financial companies have again shown time and time that the police cannot themselves,” Dubois said in the recent press release. He cited several pending investigations affected by the exclusion, including a lawsuit that is claimed Took the security features skipped In its service to person to person to person and lawsuit against the credit bureau Experiment through errors in the credit report.
Relaxing regulations for the banking industries could become important as the field grows more crowded. Buy now, pay for later applications have increased in popularity, as well as payer-to-peer payment services. The Musk Social Media platform, owned by Musk, Recently announced It was a partnership with a visa to create a payment platform.
Is Trump aimed at FDIK Next?
There is speculation that as part of her regulatory removal agenda, Dogg may undermine or dismantle Federal Deposit Insurance Corporation Also. The recent freezing of the Government for employment has affected new FDI jobs, according to A. Washington Post report.
Created after the Great Depression to assure Americans that banks are safe, the FDI is using an industry -funded pool of money to cover losses in the event of bank failures. Every depositor in a bank or credit union supported by the FDIK has its insured money up to $ 250,000 and this promise is supported by the US Government.
“Unlike CFPB, FID has its own legal power,” Bill Isaac, a former President of FDIK. “There is a board of directors and own funding from the banking industry. It would not be easy to disassemble FDIK. And that would be a terrible move. “
Financial experts warn that eliminating CDIK can cause a wide disruption of the banking industry, potentially affecting not only consumer confidence in financial institutions, but also the value of the US dollar.
“If FDI was dismantled, all the money in our banks would be at risk,” Style said.
However, experts point out that for the time being, FDIK remains in force, so bank deposits remain insured up to $ 250,000. If bankers with a federal insured credit union, your deposits are covered by the National Credit Union Administration.
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