Billionaire Elon Musk and California venture capitalist Marc Andreessen have begun a discussion about the role of government we should play, but it may not turn out the way they hope. They don’t like government agencies that stop companies like them from ripping off consumers.
They particularly dislike the 14-year-old Consumer Financial Protection Bureau. But most voters in both major parties support the effort.
Musk and Andreessen recently made their claims public. “Delete the CFPB” was Musk’s misguided policy stance toward X. Andreessen told “The Joe Rogan Show” about how Sen. Elizabeth Warren (D-Mass.) used the CFPB to take away her bank accounts, or “debunk her bank accounts.” developed a theory. — about people who disagree with her, especially Silicon Valley entrepreneurs.
Their attacks are similar to what Wall Street banks and predatory lenders have been claiming since before the agency was created in 2010. JPMorgan Chase CEO Jamie Dimon, who tried to strangle himself in his crib during Congressional debates about creating the agency, is now daring to paint his own $4 . – Highly profitable banks as victims of regulation. Payday lenders filed a lawsuit in the Supreme Court (and lost) to stop funding to government agencies. Most financial institutions belong to lobbying groups that aim to dismantle the agency.
These industries hate the Consumer Financial Protection Bureau so much because, frankly, the Consumer Financial Protection Bureau does that job. Congress has given the agency enforcement powers to stand up for consumers, and businesses run by or affected by Musk and Andreessen stand to benefit. In one example from 2016, the Andreessen-backed Oakland-based LendUp Inc. sued a start-up backed by the agency for flouting federal law. The agency ultimately shut down the company in 2021 following repeated violations, including modifying existing loan terms.
Andreessen is also an investor in San Francisco-based Synapse, a bank-like company that wiped out people’s savings, as reported last month. No charges have been filed yet.
PayPal, with which Musk was closely involved, has also been sanctioned by the agency.
Tech industry moguls may hold a grudge as justice is served, but the 118,101 LendUp customers who received more than $40 million in refunds thanks to the Consumer Financial Protection Bureau are sure to feel differently. would be holding. These people are not alone.
Since its founding, the agency has recovered more than $21 billion in compensation and canceled the debts of tens of millions of consumers. Recently, the bureau returned $1.8 billion in just one week to 4 million consumers who were defrauded by a group of credit repair companies across the western United States. Billions of additional savings have been realized through agency-created protections that eliminate unfair fees, charges, and financial product terms.
Yes, Andreessen may have felt a little salty after the Consumer Financial Protection Bureau shut down LendUp. And, certainly, it stands to reason that companies that deceive their customers are likely to be shut down or “unbanked,” if Andreessen wants to use that term. But the bureau also advocates for consumers who are actually unbanked, such as those whose accounts were suddenly cut off because of their race or ethnicity.
Not all cases of banking while black are reported to the police, as was the case with Ryan Coogler, director of “Black Panther.” The bureau handles more insidious cases where there is no outward evidence of wrongdoing, such as when companies systematically close accounts for discriminatory reasons. In fact, after receiving numerous complaints about account closures and freezes, the agency has created rules to supervise digital payment apps and deter illegal bank account openings, which are expected to take effect soon.
Indeed, its director, Rohit Chopra, has explicitly called for a banking system that does not punish identity or speech. On the “Organized Money” podcast, Chopra recently said, “To stop demonetization and ensure that people truly have the right to have all law-abiding activities pass freely through the banking system, we must do more. We must act.”
Musk’s attack on the Consumer Financial Protection Bureau hinges on his new role as one of President-elect Donald Trump’s go-to people for shrinking the government. In theory, its agenda appeals to the anti-bureaucratic, liberal tendencies in American politics, but this sentiment has receded considerably since its heyday during the Reagan era, with Americans becoming more and more willing to pay for savings and loans. Considering what we’ve learned from the fiasco and predatory practices of credit card companies, payday lenders, and, of course, the 2008 financial crisis and Great Recession. Voters like government institutions that work well and work for them. There’s a reason why 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 regulations.
My organization researched what voters think about the Consumer Financial Protection Bureau’s mission and found support among Republicans, independents, and Democrats. Standing up to Wall Street and predatory financiers and reclaiming ill-gotten gains for small citizens is extremely popular. Other studies have confirmed this finding.
In the coming months and years, the new president, his appointees, and Republicans in Congress will likely seek to bring an agency that has done remarkable work for millions of families to its knees.
Mr. Musk and Mr. Andreessen are the cutting edge of a fake populism that masks the agenda that will unfold over the next four years, aimed at benefiting the wealthy at the expense of everyone else. They can launch a campaign against the Consumer Financial Protection Bureau, but they can’t change the facts or draw battle lines. On one side are a handful of Wall Street bankers, payday lenders, and Silicon Valley billionaires who are making money by beating the system. rule. Meanwhile, the vast majority of Americans benefit from and value the agency’s important work, but they don’t have the billionaires’ megaphones.
Christine Chen Jinner is a senior policy advisor at Americans for Financial Reform.
