As he targets the CFPB, Elon Musk looks to dismantle his own potential regulator
Elon Musk has spent years laying the groundwork to transform X into a digital payments platform. Now he appears to be helping dismantle the agency that would oversee it.
Over the weekend, the Trump administration ordered a halt to effectively all work at the Consumer Financial Protection Bureau, the regulator that ensures companies like large banks, mortgage lenders, student loan servicers, and online payment apps don’t bilk their customers. It also barred employees from showing up to the agency’s Washington, D.C., headquarters this week, apparently following the playbook it used to rapidly shut down USAID earlier this month.
Musk seemed to signal those moves were imminent on Friday afternoon, tweeting “CFPB RIP” just hours after members of his Department of Government Efficiency — aka DOGE — set up shop at the agency. “They did above zero good things, but still need to go,” he added later.
Many Republicans have opposed the CFPB since its creation as part of 2010’s Dodd-Frank financial reforms and have often called for its closure, arguing that Washington has too many redundant regulators. The agency has also clashed with Silicon Valley in recent years, such as when it forced LendUp, an online payday lender, to stop doing new business. Musk first tweeted that it was time to “delete CFPB” in November, after one of LendUp’s backers, the billionaire venture capitalist Marc Andreessen, harshly criticized the agency on a podcast.
But critics have noted that if the CFPB is mothballed, Musk also may stand to personally benefit.
“He’s not just looking at government efficiency,” said Adam Rust, director of financial services at the Consumer Federation of America, a conglomerate of nonprofits supporting strong regulations. “He’s clearing the way for his company to avoid regulation.”
The billionaire has long talked about his desire to elevate X from a social media platform into an all-encompassing “everything app,” where consumers can also hold their cash, make payments, and shop, similar to China’s Weibo. The company made major strides toward that goal by acquiring money-transmitter licenses in 40 states plus the District of Columbia, and last month announced a new deal with Visa that will eventually allow it to offer a digital wallet.
As a result, X would likely come under the CFPB’s oversight. Late last year, the agency finalized rules establishing its authority to supervise digital payment apps that handle more than 50 million transactions. It has also brought enforcement actions against payment platforms like CashApp and the group that runs Zelle for failing to adequately deal with fraud on their networks.
Read more: Is it safe to store money in apps like Venmo, PayPal, and Cash App?
“Musk does not want an active CFPB that will make sure that [X] is following the rules, that it is not ripping off consumers,” said Patrick Woodall, managing director of policy at Americans for Financial Reform, a group that advocates stricter regulations in the financial services industry.
Federal conflict of interest laws bar special government employees like Musk from working on matters where they may have a direct financial stake. But last week, White House press secretary Karoline Leavitt said it would be up to the tech magnate to decide when to recuse himself from a matter.
“If Elon Musk comes across a conflict of interest with the contracts and the funding that DOGE is overseeing, then Elon will excuse himself from those contracts,” she said. “And he has, again, abided by all applicable laws.”
A Trump administration spokesman did not respond to a request for further comment on Musk’s potential conflict of interest on Monday or about its plans for the CFPB.
For now, the agency is being directly run by Russell Vought, Trump’s Office of Management and Budget head, who issued this weekend’s stop-work order freezing all of CFPB’s supervision, enforcement, and regulatory work. Whether Trump officials will eventually seek to put the agency into long-term hibernation or keep it operating with a bare-bones workforce, remains to be seen. (A federal employees union has sued to undo Vought’s work pause).
But even just diminishing the CFPB could free companies like X from layers of federal scrutiny. For instance, the agency may have fewer resources to conduct day-to-day supervision, where staff check to make sure firms are following consumer protection laws.
“The thing about supervision is it’s the checkup along the way,” said Rust. “You don’t know there’s a problem unless you check. And it looks like we’re not going to be checking for a little while.”
Even with the CFPB sidelined, X’s payments app could still face oversight from state attorneys general, who are empowered under Dodd-Frank to enforce many of the same laws and regulations as the agency. During the last Trump administration, California actually created its own “mini-CFPB,” while states like New York have tried to act aggressively on consumer protection.
Still, there are other concerns about Musk’s potential meddling with the CFPB. DOGE’s engineers may have access to the agency’s data on X’s competitors in financial services, including details of ongoing investigations. Musk might find ways to use that information to his advantage if he accesses it, said Lisa Gilbert, co-president of the progressive advocacy group Public Citizen.
“It really is just an object lesson in what the problem is with having a conflicted billionaire in charge of looking at what is going on in government and making decisions,” she said.
Jordan Weissmann is a senior reporter at Yahoo Finance.
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