Opinion: The Consumer Financial Protection Bureau has irked billionaires, but it serves the public well

The billionaire Elon Musk and the California venture capitalist Marc Andreessen have started a debate about the role of government that we should be having — but it might not go the way they would hope. They don’t like government agencies that stop corporations like theirs from ripping off consumers.

They especially hate the 14-year-old Consumer Financial Protection Bureau. But most voters in both major parties support its work.

Musk and Andreessen recently made their case publicly. “Delete CFPB,” was Musk’s pithy policy position on X. Andreessen spun a conspiratorial tale on “The Joe Rogan Show” about how Sen. Elizabeth Warren (D-Mass.) uses the bureau to take away the bank accounts — “debank” — of anyone who doesn’t agree with her, especially Silicon Valley entrepreneurs.

Attacks by the two men resemble what Wall Street banks and predatory lenders have said since before the bureau came into existence in 2010. JPMorgan Chase CEO Jamie Dimon tried to strangle it in the crib during the congressional debate over its creation and now audaciously paints his $4-trillion, very profitable bank as a victim of regulation. Payday lenders took a case to the Supreme Court in an attempt to defund the agency (they lost). Most financial institutions belong to lobby groups that have sought to eviscerate the bureau.

These industries dislike the Consumer Financial Protection Bureau intensely because, bluntly, it does its job. Congress gave the bureau enforcement powers to stand up for consumers, and companies run or influenced by Musk and Andreessen have been on the receiving end. In one example from 2016, the agency sued a startup backed by Andreessen, Oakland-based LendUp, after it flouted federal law. Ultimately the bureau shut the company down in 2021 following repeated violations that included changing the terms of existing loans.

Andreessen is also an investor in San Francisco-based Synapse, a bank-like company that wiped out people’s life savings, as reported last month. No charges have been filed — yet.

PayPal, with which Musk was closely involved, has also faced sanction by the bureau.

Tech moguls might hold a grudge when justice is done, but the 118,101 LendUp customers who received more than $40 million of their money back thanks to the Consumer Financial Protection Bureau surely feel differently. Those people are not alone.

Since its creation, the agency has recovered more than $21 billion in restitution and canceled debts for tens of millions of consumers. Recently, in just one week, the bureau returned $1.8 billion to 4 million consumers who had been scammed by a group of credit repair companies scattered across the western United States. Bureau-created protections barring unfair fees, charges and terms for financial products have saved billions more.

So yes, Andreessen might have felt a little salty after the Consumer Financial Protection Bureau shuttered LendUp. And yes, companies that defraud clients are justifiably more likely to be shut down or “debanked,” if Andreessen wants to use that term. But the bureau also stands up for consumers who actually are debanked, like people who are suddenly cut off from their accounts because of race or ethnicity.

Not every case involves, as with “Black Panther” director Ryan Coogler, a call to the cops for banking while Black. The bureau works the much more insidious cases, like when companies systematically close accounts for discriminatory reasons, with no outward evidence of misdeeds. In fact, after the agency received numerous complaints about account closures and freezes, it created a rule — which will go into effect soon — to oversee digital payment apps and stop illegal debanking.

Indeed, the bureau’s director, Rohit Chopra, has explicitly called for a banking system that does not penalize identity or speech. On the podcast Organized Money, Chopra recently said: “We have to do more to stop debanking and make sure that people really have a right for all of their law-abiding activities to freely flow through the banking system.”

Musk’s attack on the Consumer Financial Protection Bureau hinges on his new role as one of President-elect Donald Trump’s go-to guys for shrinking government. In theory, that agenda appeals to an anti-bureaucratic, libertarian strain in American politics — a sentiment that has ebbed considerably since its high point in the Reagan years, given what Americans have learned from the savings-and-loan debacle, the predatory practices of credit card companies, payday lenders, and of course, the 2008 financial crisis and Great Recession. Voters like government agencies that work well and work for them. There’s a reason proposals to change Social Security are known as the third rail of American politics; the public relies on this program just as we rely on consumer protection rules.

My organization has researched what voters think of the Consumer Financial Protection Bureau’s mission and found support among Republicans, independents and Democrats. Standing up to Wall Street and predatory lenders and wrangling back ill-gotten gains on behalf of the little people is very popular. Other surveys confirm this finding.

In the coming months and years, the new president, his appointees and congressional Republicans are likely to try to kneecap a government institution that has done remarkable things for millions of families.

Musk and Andreessen are the leading edge of a false populism that hides an agenda that will unfold over the next four years designed to benefit the wealthy at everyone else’s expense. They can launch a campaign against the Consumer Financial Protection Bureau, but they can’t change the facts or draw the battle lines: On one side are a handful of Wall Street bankers, payday lenders and Silicon Valley billionaires, who make money by breaking the rules. On the other side are the vast majority of Americans, who benefit from and value the bureau’s crucial work — but don’t have a billionaire’s megaphone.

Christine Chen Zinner is senior policy counsel at Americans for Financial Reform.