EP 23: How Corporate Power Destroyed the CFPB

In this episode, I trace how corporate power and political influence destroyed the Consumer Financial Protection Bureau, silencing the only federal agency whose sole mission was protecting ordinary consumers. From real-world cases to court rulings and donor pressure, this is the story of what happens when the watchdog is taken off the beat. 

Check out my substack page where I tackle some of the episode topics in depth and write about other issues our country and the world are facing today. https://substack.com/@ktdpodcast

Episode Transcript

(00:02):
Christmas came early.
The regulators finally work forus.
That was a bank executiveearlier this year at a
conference saying the quiet partout loud.
It happened soon after the Trumpadministration gutted the
Consumer Financial ProtectionBureau.
Not in a leaked email, not in aprivate conversation.

(00:24):
At a public event to a room fullof his peers.
Celebrating the fact that thecops were taken off the beat.
That quote, those nine wordsperfectly encapsulate today's
America.
It reveals exactly whoseinterest this administration
serves, and how little any ofthem think to hide it anymore.

(00:44):
Donald Trump promised to drainthe swamp.
Instead, the swamp hascompletely taken over.
Welcome back to KhannectingDots.
It's been a while since I'vereturned to the DOGE series.
The last episode focused onU-S-A-I-D, how a conspiracy
theory drove the administrationto dismantle America's
humanitarian aid agency,shutting programs worldwide, and

(01:08):
cutting off food medicine anddisaster relief.
I promised I'd return to theConsumer Financial Protection
Bureau, or CFPB, and theDepartment of Education.
Today I'm gonna focus in on theCFPB.
Why now?
Two reasons.
First, in November, Elon Musksecured what could become a

(01:30):
trillion dollar compensationpackage from Tesla.
I'll break that down more fullyin a related substack piece.
But for now, understand this.
The man who helped dismantleFederal oversight is positioned
to personally profit on a scalethat makes the CFPB's entire 14
year budget look like a roundingerror.

(01:50):
Second, the CFPB is set to runout of money and close its doors
in early 2026.
Now you've probably heard theacronym in the headlines.
Earlier this year, theadministration locked the CFPB
headquarters, fired its directorand ordered staff to stop
working.
Doge announced its destructionearly and loudly.

(02:14):
But Doge went after so manyagencies, each with its own
acronym and mandate that theystart to blur together.
Another agency gutted.
Another acronym, eliminated.
Another so-called EfficiencyWin.
So why focus on this one?
Because the CFPB's Destructionreveals something essential

(02:34):
about who this administrationactually serves.
This wasn't about waste orefficiency.
It's about removing the onlyfederal agency whose sole
mission was protecting ordinaryAmericans from corporate fraud.
Before we dive into what theCFPB was, let's talk about some

(02:54):
of the people it actuallyhelped.
Anthony Ramirez, a truck driverin California.
In August, 2021, he overdrew hischecking account at Bank of
America.
The bank charged him$245 inoverdraft fees.
The problem was this; Bank ofAmerica was still advertising a
client assistance program thatpromised to refund overdraft

(03:17):
fees during the pandemic.
Anthony was directed to requesta refund through that very
program.
But the program had been shutdown a year earlier.
The bank never updated the appor its website.
Never told customers, the reliefno longer existed.
Anthony filed a complaint withthe CFPB.
In 2023.

(03:38):
The agency ordered Bank ofAmerica to pay more than$100
million in refunds frommisleading customers like him.
Then there's a New York businessowner whose bank froze his
checking account.
He couldn't pay rent, utilitiesor buy groceries.
He couldn't even put gas in hiscar.
He contacted his congressionalrepresentative.

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They referred him to the CFPB.
The agency intervened.
He got his money back.
When the CFPB investigatedcomplaints, it often uncovered
systemic abuse.
At Navy Federal Credit Union, itfound the bank was charging
overdraft fees to servicemembers and veterans, even when
their accounts showed positivebalances.

(04:20):
Active duty troops trying to paybasic bills were hit with fees
they didn't owe.
The CFPB ordered Navy Federal toreturn$80 million to its
customers.
These weren't isolated cases.
Over its lifetime.
The CFPB saves consumers over$21billion.

(04:40):
For every dollar taxpayersinvested, consumers got at least
$2 back.
So why destroy something thatworks this well?
To answer that, we need tounderstand why the CFPB was
created in the first place.
It was created after the 2008financial collapse.
Millions of Americans lost theirhomes to mortgages they'd been

(05:03):
deceived into taking.
Banks sold loans they knewpeople couldn't repay, then
bundled and sold them asinvestments.
The problem wasn't just fraud,it was fragmentation.
Consumer finance laws wereenforced by a patchwork of
agencies, each with differentpriorities.
The result was predictable.
Protecting consumers was neveranyone's primary job.

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Minimal oversight, emboldenedbanks and lenders to push
predatory financial products atmassive scale.
Elizabeth Warren, then a Harvardlaw professor studying
bankruptcy and consumer debtproposed a fix.
One agency, one mission.
Protect ordinary Americans fromfinancial deception.
She put it this way,"you can'tbuy a toaster that has a one in

(05:49):
five chance of burning down yourhouse, but you can refinance a
home with a mortgage that is thesame one in five chance of
putting your family on thestreet." In 2010, Congress
created the Consumer FinancialProtection Bureau; independent.
Fed, funded, and designed to beharder to politically
manipulate.
For consumers.

(06:09):
It became the country's mostimportant financial watchdog.
For banks and corporations.
It became an obstacle.
Here's some more examples ofwhat the CFPB actually
accomplished.
In 2022, it hit Wells Fargo witha$3.7 billion penalty.
The bank had been openingaccounts customers never

(06:30):
authorized charging fees onthose fake accounts and botching
mortgage applications so badlythat families who qualified for
loans were pushed intoforeclosure.
It went after other majorinstitutions too, like Bank of
America and Navy Federal CreditUnion, I mentioned earlier.
But the CFPB didn't just punishmisconduct, it prevented it.

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It capped credit card late fees,cutting them from$32 to$8.
A change that would've savedconsumers more than$10 billion a
year.
It limited overdraft fees.
It removed medical debt fromcredit reports, and it built a
public complaints database soconsumers could compare products
and hold companies accountable.

(07:15):
That complaint system became oneof the agency's most powerful
tools.
When consumers filed complaints,companies were forced to
respond, on the record, and on adeadline.
The CFPB tracked thoseresponses, identified patterns
of abuse and escalated caseswhere people were at immediate
risk, like foreclosures orunlawful account freezes.

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The scale of those complaintstells you how badly this
oversight was needed.
In 2019, the CFPB received about280,000 complaints.
By last year, that number hadsurged more than 2.7 million.
More than 2.3 million involvedcredit reporting errors that
damaged people's scores andaffected lives in numerous ways.

(08:00):
More than half of thosecomplaints resulted in relief.
As Adam Rust of the ConsumerFederation of America put it.
"These credit score formulasgovern so many factors of your
life.
It's not just your ability toget a loan, it's your ability to
secure housing or qualify for ajob.
It's important that you canresolve something, but it's
difficult to do it on your own."Much of the relief was

(08:23):
non-monetary.
Fixing credit reports, stoppingharassment by debt collectors,
correcting account records.
Still more than$300 million wasreturned to consumers through
the complaint system alone,including$90 million just last
year.
No other government or privateentity has the capacity to
handle consumer financial harmat this scale, and yet from the

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moment it opened its doors,Republicans worked to destroy
it.
Republicans have opposed theCFPB since its creation.
They've called it governmentoverreach, accused of harassing
businesses, and attacked itsindependence.
But a recent ProPublicainvestigation uncovered
something else.
Many of the same Republicanlawmakers who voted to gut the

(09:10):
CFPB, were quietly using it tohelp their own constituents.
Senator John Cornin of Texasalone referred more than 800
constituent complaints to theCFPB.
More than any other currentlawmaker from either party.
Other Republicans did the same.
Representative Daryl Isareferred more than 100
complaints.

(09:30):
So did representative RobWhitman.
In total Republicancongressional offices steered
nearly 10,000 complaints to theCFPB between 2011 and 2025.
Here's how that played out.
A service member from New Jerseyhad their savings stolen.
They contacted the Republicanrepresentative for help.
That office referred the case tothe CFPB.

(09:53):
The agency intervened.
The service member got relief.
Then that same lawmaker voted toslash the CFBs budget by 46%.
This wasn't an isolated case.
Take the New York business ownerI talked about earlier.
After his bank account wasfrozen, he contacted his
Republican representative whoreferred the case to the CFPB.

(10:15):
Two weeks later, that lawmakervoted to gut the agency.
In July, 2025, nearly everyRepublican in Congress voted for
Trump's signature legislativepackage, the one big beautiful
bill act.
It cut the CFPB's budget capfrom$823 million to$446 million
per year, a 46% reduction.

(10:38):
The same lawmakers who used theCFPB to serve their
constituents, voted to dismantleit.
By now, it's clear whycorporations hated the CFPB.
It held them accountable.
It cost them money, and itforced them to follow the rules.
DOGE, led by Elon Musk becametheir hatchet man.

(10:59):
But Musk wasn't doing this workfor others.
He had a lot to gain from theCFPBs destruction.
The agency had received hundredsof complaints about Tesla's
financing arm.
Complaints involving auto loansand debt collection.
Those investigations were frozenwhen DOGE took over.
At the same time, Musk waspreparing to launch X Money, a

(11:22):
payment platform integrated intohis social media company, X.
If successful, it would competedirectly with Venmo, cash app,
and PayPal.
All companies regulated by theCFPB.
In February, doge operativesswept into the CFPB
headquarters.
According to multiple sources,including a CBS news

(11:42):
investigation, they set up campin the building's basement.
They taped paper over the windowso no one could see what they
were doing.
And they were grantedunprecedented access to the CFP
B'S confidential database.
The same databases that containconsumer complaints against
companies like Venmo and CashApp, Musk's future competitors,

(12:03):
along with proprietary businessinformation, trade secrets and
sensitive financial data.
Normal CFPB employees undergomonths of background checks to
access those systems.
Fingerprinting, interviews,extensive vetting.
The DOGE team received a briefprivacy training and signed
non-disclosure agreements.

(12:25):
No background checks, no monthslong review.
Hannah Hickman.
a CFPB attorney fired shortlyafter the takeover put it
bluntly.
"I guess it's easier to fire usthan it is to beat us in court."
Musk wasn't the only major Trumpdonor with a stake in gutting
The CFPB.
Paul Singer who runs the hedgefund, Elliot Management,

(12:46):
contributed$7.5 million toTrump's reelection efforts.
He's invested in financialcompanies that accumulated more
than 5,000 complaints in theCFBs database.
Mark Andreessen and Ben Horowitzgave a combined$7 million to
pro-Trump Super pacs.
Their firm invested in LendUp, apayday lender who the CFPB fined

(13:07):
tens of millions of dollars forpredatory practices.
Warren Stevens contributed$3million to Trump's campaign.
He held a major stake inintegrity, advance another
payday lender the CFPB sued andfined for predatory lending.
The pattern is unmistakable.
Trump's biggest donors includedpeople who ran or invested in

(13:29):
companies being investigated,fined, or sued by the CFPB.
They paid to dismantle theagency that was holding them
accountable.
And now they're collecting theirreturns.
Within weeks of Trump'sinauguration, the CFPB was on
the chopping block.
By February 7th, those operatorswere already inside CFPB

(13:52):
headquarters, shutting the placedown and sending staff home.
Three hours later, Elon Muskposted on X, CFPB RIP, alongside
an image of a gravestone.
Three days after that, RussellVought, Trump's budget director
and a key architect at Project2025, was installed as the
CFPB's acting director.

(14:12):
His first message to staff wassimple.
"Do not perform any work tasks".
The agency's website went dark.
Social media accounts weredeleted.
Investigations frozen.
Enforcement actions halted.
Consumer complaints piled upwith no one left to respond.
In late March, federal Judge AmyBerman Jackson stepped in.

(14:35):
She issued a temporaryinjunction blocking the
dismantling.
Ordered, terminated employeesreinstated, and prohibited
further firings or datadeletion.
In her order, she warned therewas a substantial risk.
The administration wouldcomplete the agency's
destruction before the courtscould rule, and that it would be
impossible to rebuild.

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Administration appealed.
In August a three judge panel onthe DC circuit lifted Jackson's
injunction.
Two Trump appointees ruled thata directive to close the agency
wasn't something courts couldreview.
The lone dissenting judge warnedthat the idea"courts are
powerless to stop a presidentfrom abolishing federal agencies

(15:17):
cannot be reconciled with aconstitutional separation of
powers or our nation'scommitment to government of
laws".
By late November, the CFPBannounced they would transfer
all active litigation to theJustice Department.
Enforcement actions, appeals,regulatory challenges.
Kat Farman, president of theUnion representing CFPB
attorneys warned staff fearedthe DOJ would quietly dismiss

(15:40):
the cases.
Then came the final maneuver.
The Justice Department's Officeof Legal Counsel issued a memo
claiming a CFPB's fundingmechanism was illegal.
The theory was simple and deeplyflawed.
The CFPB draws funding from theFederal Reserve's combined
Earnings.
The Fed has operated at losssince 2022.

(16:01):
No earnings.
The memo argued meant no fundingand therefore no CFPB.
Several federal judges hadalready rejected that theory
outright.
Even Ken Paxton, RepublicanAttorney General of Texas
disputed it.
But it didn't matter, in a courtfiling the CFPB warned it had
enough funding to operatethrough the end of 2025.

(16:23):
After that, it expects to runout of money In early 2026.
The agency will close and thereis no one coming to save it.
So what does all of this meanfor ordinary Americans?
Right now there are nearly500,000 unresolved consumer
complaints sitting in the CFPB'sdatabase.

(16:44):
Half a million people who filedcomplaints about banks, credit
cards, debt collectors, mortgageservicers, and got no help.
Among those complaints, 75families facing imminent
foreclosure.
People about to lose theirhomes.
Under normal circumstances, theCFPB would escalate those cases
immediately.

(17:04):
Contact mortgage servicers,intervene.
That didn't happen.
Those families got nothing.
And then there are the casesthat were simply erased.
Take Toyota Motor Credit.
Between 2016 and 2021 Toyotadealers lied to customers about
whether add-on insurance andservicing products were

(17:25):
mandatory.
They sneak them into contractswithout customers knowing.
People tried to cancel.
Toyota trained itsrepresentatives to keep selling
until the customer asked threetimes.
Even then, customers couldn'tcancel during the call.
They had to submit a writtenrequest.
The CFPB ordered Toyota torefund$48 million to 118,000

(17:46):
consumers and pay a$12 millionfine.
The Trump administrationreversed it.
Toyota kept the money.
Remember the Navy Federal CreditUnion, the$80 million refund to
service members and veteransthat I mentioned earlier.
Also reversed.
In total 22 CFPB enforcementactions have been permanently

(18:09):
dismissed.
At least$120 million that shouldhave gone back to consumers
stayed in corporate pockets.
Another$240 million is now atrisk.
And this isn't just about pastcases being wiped away, it's
about what's coming next.
Auto loan delinquencies hit 11%in January, 2025.

(18:31):
That's the highest level onrecord, going back to at least
2005.
Higher than during the 2008financial crisis.
Medical debt is back on creditreports after a federal court
overturned the CFPB rule thatremoved it.
That means people who were sick,who went to the hospital and
couldn't afford the bills, nowhave that debt dragging down

(18:51):
their credit scores.
Payday lenders are returning totriple digit interest rates.
Credit card companies arereintroducing junk fees, costing
the average household about$420a year.
Mortgage servicers aremisreporting payments again.
These aren't just numbers,they're individual stories.
Like a woman in Georgiaundergoing chemotherapy.

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She disputed a charge with amerchant.
Her credit company denied therefund.
Before the CFPB was gutted, shecould have filed a complaint.
The agency would've intervened.
Now.
There's no one to call.
No refund checks going out.
No investigations happening.
No enforcement actions beingfiled.
The watchdog is gone andcorporations know it.

(19:37):
And so here we are.
The Consumer FinancialProduction Bureau, an agency
that saved billions of dollarsfor Americans cheated by
corporations, protected millionsfrom fraud, and actually worked;
dismantled by an administrationthat claimed it would fight for
ordinary citizens.
But this wasn't aboutefficiency.
It was never about waste.

(19:59):
This was about corporatecapture.
Not the slow kind wherelobbyists quietly weakened
enforcement over years.
But immediate and total.
Billionaires who funded Trump'scampaign had direct stakes in
destroying the CFPB.
Their companies were underinvestigation.
Their business models dependedon the very practices the agency
was designed to stop.

(20:20):
So they paid to dismantle it andthey succeeded.
The same pattern played outacross the government.
DOGE targeted agencies that heldcorporations accountable,
agencies that regulated finance,protected workers, enforced
environmental laws, andmaintained safety standards.
The same Republicans who quietlyuse the CFPB to help their own

(20:43):
constituents voted to gut itbecause their loyalty isn't to
the people who elected them.
Remember what the bank executivesaid after the CFPB was gutted,
'the regulators finally workedfor us'.
That's the truth of thisadministration.
Government doesn't serve thepublic anymore.
It serves the oligarchs whobought it, the billionaires who

(21:05):
funded the campaigns.
The corporations whose profitsdepend on removing oversight.
The CFPBs destruction makes onething unmistakably clear.
This is who policy serves now,and this is what happens when
concentrated wealth translatesdirectly into political power.
Thank you for listening.

(21:25):
If this episode helped youunderstand what we're losing
with the destruction of theCFPB, please consider
subscribing, sharing it with afriend, and leaving a review.
Until next time, stay curious,stay critical, and stay
connected.