(Yahoo! Finance) - Billionaire Elon Musk, a key adviser to the incoming Trump administration, called for the Consumer Financial Protection Bureau to be eliminated, setting his sights on a regulator that has often clashed with Silicon Valley investors as they’ve attempted to enter the banking space.
“Delete CFPB. There are too many duplicative regulatory agencies,” the Tesla CEO posted on his social media platform X a little after midnight Wednesday.
The comment followed an appearance by celebrity venture capitalist and fellow Trump supporter Marc Andreessen on the Joe Rogan podcast, in which he accused the agency of attempting to “terrorize financial institutions” and “prevent new startups that want to compete with the big banks.”
Under current Director Rohit Chopra, the CFPB has sued and fined a number of financial tech firms and other startups it accused of deceiving customers, including at least one backed by Andreesen’s own firm.
In 2021, the regulator shut down the online payday lender LendUp “for repeatedly lying and illegally cheating its customers.” The press release announcing the move specifically noted that the company was backed by “some of the biggest names in venture capital, including Andreessen Horowitz, Kleiner Perkins, and Google Ventures.
In his Rogan appearance, Andreessen also appeared to accuse the CFPB of conspiring to “debank” startup founders in disfavored industries such as crypto, by pressuring financial institutions to drop them as customers. The comments echoed claims about federal regulators such as the Federal Deposit Insurance Corporation that have circulated among crypto industry executives and conservatives, including lawmakers on Capitol Hill.
“It’s a privatized sanctions regime that lets bureaucrats do to American citizens the same thing that we do to Iran — just kick you out of the financial system,” Andreessen said. “This has been happening to all the crypto entrepreneurs over the last four years, this has been happening to the fintech entrepreneurs, anybody trying to start any kind of new banking service, because they’re trying to protect the big banks.”
The CFPB, however, has recently taken legal and public stands against debanking — the forced closure of a bank account of an organization deemed to be a legal or financial threat. In an August appeals court argument, for instance, the agency warned that a federal judge’s decision in Texas limiting its ability to police discrimination by financial institutions would block it from investigating banks for cutting off conservative Christian groups.
President-elect Donald Trump tapped Musk and former GOP candidate Vivek Ramaswamy to lead the so-called Department of Government Efficiency — or DOGE — a private advisory board tasked with finding trillions in budget savings. Both Ramaswamy and Musk have promised to thin out the federal workforce and trim the ranks of regulators, moves some critics have noted could benefit Musk’s own companies by easing oversight.
X, for instance, has been seeking state money transmitter licenses that would allow it to operate as a payments app — a line of business that would put it under the purview of the CFPB.
Mick Mulvaney, who served as head of the CFPB under Trump’s previous administration, told Yahoo Finance on Wednesday that he agreed with Musk that the agency should be eliminated because it simply created a “duplicative layer of additional regulatory oversight.”
“To the extent we're trying to bring efficiencies to the system — either letting the CFPB do what it was supposed to do and take that authority away from others, which is never going to happen or shutting the CFPB — I'm all in for shutting the CFPB,” he said.
