A key federal watchdog is being stripped of its power to oversee potential fraud and abuse in online payment platforms just as Elon Musk’s site, X, attempts to become one.
Late last year, the Consumer Financial Protection Bureau—which is tasked with rooting out financial malfeasance—issued a rule that expanded its purview to include digital payment apps like Venmo, PayPal, and Zelle. Just as the CFPB is responsible for overseeing traditional financial institutions, the agency had also sought to exert oversight over the increasingly popular peer-to-peer payment sites. “Digital payments have gone from novelty to necessity and our oversight must reflect this reality,” the CFPB’s then-director Rohit Chopra said. “The rule will help to protect consumer privacy, guard against fraud, and prevent illegal account closures.”
Since then, Trump has fired Chopra, and, amidst a broader rampage throughout the federal government, Musk’s DOGE has sought to shut down the CFPB. “RIP CFPB,” Musk posted in February, after having ransacked the agency. That same month, the newly installed CFPB chief, Russell Vought, enacted several policies that slowed the agency’s operations to a crawl before telling all of the agency’s staff members that they did not need to come in to work.
The attack on CFPB has since run into legal roadblocks, but the effort to destroy the agency comes at an interesting juncture, given that Musk’s platform, X, recently entered into an arrangement with Visa to create a peer-to-peer digital payments system. The new feature, which is still in the works, would allow the site’s users to transfer money and make payments in a Venmo-like fashion.
Now, Republican lawmakers have sought to cut off the CFPB from monitoring such online payments. On Wednesday, the U.S. Senate voted on a resolution that would roll back the previously introduced CFPB rule that gave it the power to monitor online payment platforms. The resolution still needs to be approved by the House, but the House is also currently controlled by Republicans.
Congressional acquiescence to policies that would benefit Musk’s companies is particularly worrying, given the fact that Musk has threatened to use his gargantuan fortune to “primary” (or, rather, unseat) any lawmaker that does not go along with his and President Trump’s agenda. Given the immense power and influence Musk has over the current administration, it’s also exceedingly difficult to disentangle what is Trump’s agenda and what is Musk’s agenda.
The Verge reports that a number of Democrats have attempted to push back on the GOP-led gutting of the CFPB. On Wednesday, U.S. Senator Elizabeth Warren (D-Massachusetts), and Senator Adam Schiff (D-California) wrote to Doug Collins, the Acting Director of the Office of Government Ethics, demanding to know whether the conflicts of interest inherent to Musk’s role in government were being probed.
“Notably, the CFPB has taken steps in recent years to protect consumers from fraud on digital payment apps and collects proprietary information from the digital payment industry,” Warren and Schiff wrote. “Mr. Musk is also the founder and CEO of Tesla, which offers customers the option of working with Tesla to finance their auto purchases. The CFPB plays a critical role in supervising the auto lending industry and protecting consumers from corporate malfeasance and scams. Therefore, actions by Mr. Musk and DOGE at the CFPB have the potential to directly benefit X, Visa, and Tesla—and by extension, Mr. Musk.”
Weirdly enough, the effort to destroy CFPB has also inspired outrage across the aisle, specifically from rightwing influencer Laura Loomer. Loomer, who is best known for spouting conspiracy theories online, recently took to social media to bash the GOP’s attack on the regulatory agency which, she correctly pointed out, is responsible for stopping “debanking”—the supposedly discriminatory phenomenon in which a financial institution can decide to blacklist certain individuals or businesses. The crypto community, in particular, has claimed that “debanking” is a huge problem for them. “Every Senate Republican with the exception of Senator Josh Hawley @HawleyMO just voted to LEGALIZE DEBANKING,” Loomer recently wrote on X. “Now apps like PayPal can get away with banning you for your political views thanks to Senate Republicans who just voted to repeal a rule that made that illegal in Dec 2024.”
Donald Trump’s First Buddy Elon Musk replied to Loomer with a single word: “Really?”