Why DOGE is killing the agency that stops banks from ripping you off

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0:42Hello and welcome to Decoder. I'm Neil A. Patel, editor-in-chief of The Verge, and Decoder is my show about big ideas and other problems. Today I'm talking to Rohit Chopra, who is the director of the Consumer Financial Protection Bureau until the end of January, when President Donald Trump fired him and Elon Musk's Doge began trying to dismantle the agency. The CFPB has been around for about 15 years now. It was started in 2010 in the wake of the 2008 financial crisis in order to protect consumers from the kinds of lending and credit schemes that led to that crash. Broadly speaking, the CFPB has been pretty popular.

1:14This is the agency that prohibits predatory lending practices, limits credit card fees, and investigates various kinds of financial fraud. So shutting it down kicked off a number of controversies, not least of which was whether or not Trump and Musk even had the power to do it. After all, the CFPB was created by Congress in a law. And the Constitution says the president is supposed to take care that the laws passed by Congress are faithfully executed, not reinterpreted by an unelucted billionaire who is deep into crypto. I don't think that idea came up at all with the founders, actually. It's been a minute since I watched Hamilton, but I don't think that was part of it.

1:47Anyway, this all led me to ask several times who made the decision to fire him, and who is currently responsible for the various policies of our government, and whether any of those things add up to a clear plan for which someone can actually be held accountable in the end. I ask questions like this on Decoder all the time, and there are usually answers, even from some of the most powerful executives in the world. In fact, especially from some of the most powerful executives in the world. But here, well, you're just going to hear Rohit say over and over again that he doesn't know. Sincerely, I don't think he knows.

2:18I don't know if anyone knows. And that should probably be as worrying as anything right now. Rohit and I also talked about the obvious clash between the two sides of the Trump coalition, the Elon Musk tech libertarians and the more populist mega wing. These two factions are currently fighting over tariffs in very public and very loud ways, but they seem poised to be ever more at odds as Trump reshapes even more of the government. The CFPB sits right in the middle of that kind of fight. It's a lot easier for Elon to turn X into an everything app crypto payments platform without a regulator on the beat, but the populist wing of the party isn't exactly in love with big banks and big tech gaining even more power.

2:56I have no idea how any of that will play out, so I was curious to see if Rohit had any insight and what he was most worried about without an agency like the CFPB standing guard. There's a lot going on in this one. Former CFPB head, Rohit Chopra. Here we go.

3:25roe chopra you are the third director of the consumer financial protection bureau you are former commissioner of the federal trade commission welcome to decoder thanks for having me briefly explained to people what the cfpb was meant to do yeah well we saw how much people lost wealth across the country after a massive mortgage crash. And there was a realization that there was really no one kicking the tires on some of these very big financial firms that were offering loans that were set up to fail. So they created an agency with some real teeth to go after the biggest financial companies, but others too, who were peddling loans, payments, and other financial products.

4:15Do you think that establishing all this oversight was a better solution than simply letting a bunch of people fail at their big businesses? Look, this is not a true capitalist system. When you had some of the biggest companies in the economy at the time, the big Wall Street banks, screw up. And then many of them actually grew bigger and more powerful on the other side. So it's not an either or, it should have been an and, where there was tougher enforcement to look after consumers, but also really making sure that those bailouts could never happen again. There was not enough fixes. And I think we are still feeling the anger from those bailouts even today.

5:02It seems like today, no one's exactly sure what to do with their anger. In the government right now, you've got Trump's faction that has a lot of popular, maybe even populist anger at big banks, big business, and big tech. And then you've got Elon Musk, who kind of wants to be an avatar of tech and business, empowered to tear down all the parts of the government that can do anything about big business and big banks and all that. You were right at the center of that storm. How do you square those things? Well, that was clearly two big factions, and one of those factions won out. A lot of people were hoping on Wall Street I'd be fired in day one, but I actually kept going for a few more weeks.

5:44And in fact, Donald Trump went and gave a speech at Davos calling out Jamie Dimon, Brian Moynihan, the CEOs of JPMorgan Chase and Bank of America. But then not so long later, just a few weeks, we do see Elon Musk take decisive steps. And here's what's interesting. To fire the technologists and investigators at the CFPB very, very quickly. And of course, this is coming at a moment where the CFPB is needing to look more and more at tech giants because they are increasingly infiltrating payments and lending. You got fired. Was that a phone call from Donald Trump? Was that a phone call from Elon Musk?

6:31It's a letter. It's a letter. You get a letter. How did the letter arrive? Was it USPS? Was it email? Was it PDF? You get it electronically, though. I think they probably sent a hard copy, too. I'm always interested in these little details. Literally, did you open a PDF and say, well, that happened? Yeah, I think I read it, and I was prepared for that moment. We had said very clearly, I'm not going to resign. I serve a five-year term, but if they want to replace me, that's their right. And then I think they were in a war with each other about, are they actually going to use this agency to go after abuses by big financial firms and big tech firms?

7:20Or are they going to defund the police that look after Silicon Valley and Wall Street? And they chose the latter. When you say they, who specifically do you mean? I don't know. But at the end of the day, that's what the White House decided. Do you think Donald Trump made that decision? I have no clue, but certainly he's the one that has to ultimately sign off on who leads these agencies. I'm asking this very specifically because you being fired from that role specifically requires a kind of presidential authority. That's right. You not knowing who made the decision to fire you seems like a central part of the story here.

8:00and it seems like you are unwilling to assign that decision to Donald Trump individually. No, I mean, look, that's his call. It's his signature on it. There's no question that he fired me, but really who was in the room and who was pushing for what, I don't know. I certainly see the signs that Elon Musk played an enormous role in that. Interestingly, it was just before Thanksgiving, a few weeks after the election, Elon Musk tweets, we need to delete the CFPB. Late January, Twitter X inks a deal with Visa to become a new platform to move payments. And a few days later, I was fired. I don't know, but there's a lot of evidence to suggest that there was a voice, not necessarily from Wall Street, but from the big tech companies and Elon Musk that was really calling the shots.

9:04We're seeing already a number of very fast decisions to overturn decisions you've made or policies that the CFPB had. The Senate just voted to overturn rules about overdrafting and checking accounts. The CFPB itself has announced now that they won't enforce the payday lending rule. There's all kinds of this stuff happening. We're seeing companies that were previously penalized starting to light back up and advertise again. And by the way, issuing a series of pardons, including to Capital One, including to JPMorgan Chase and Bank of America, and a long list of other companies. These were in courtrooms, across the country, and those cases were pulled out without any explanation.

9:47How do you think people should assess the risks of not having a regulator like the CFPB there right now? Well, I feel we're at a moment right now that everyone thinks that their data is being harvested, that there are more risks online to our privacy, to our identity, our voices and images about ourselves can be cloned. There really is so much that people are at risk for, and many people don't feel they have any other options, and they're just hoping that someone is looking after all this. You know, when I board a plane, I'm not going to read up on all of the history of the aircraft. I expect that there is a regulator making sure that that plane is not going to burst in flames.

10:41When I walk into a building in an elevator, I have to expect that someone has inspected to make sure that that elevator is not going to come crashing down and kill people. So people really want to see some meaningful inspection and oversight, especially when it comes to how much money is at stake. You mentioned Elon Musk several times here. It seems like he is playing a central role in deciding who the regulators are, how the regulators will work. He's wanted X to become the everything app and do payments. I'm not sure that will ever happen, but that's what he said he's wanted. He obviously does lending with Tesla.

11:24He's involved in a lot of things that access our payments infrastructure, that access the financial system. Do you think that his approach is strategic? Do you see a plan in the moves that he's making or do you see sort of random destruction? It could be both. There was lots of worry about when his folks got into the CFPB systems. Who were they snooping on? Were they looking at some of the plans of their competitors? What were they downloading? And look, this is not unique to X. We have seen this in many other gigantic tech firms. Mark Zuckerberg went on Joe Rogan and said, why is the CFPB looking at me?

12:09We're doing social media, not acknowledging the fact that a few years ago, he tried to create a new currency and is increasingly into the world of financial products. Google, Apple, they are the ones that move so many payments when we tap our phones. So I do think there is a little bit of jealousy that some of these tech firms in the U.S. have over their Chinese counterparts. Look at how Alipay, WeChat Pay have a window into every single consumer transaction, it seems like. It's so ubiquitous. They are able to match that information with geolocation, with friends and contact lists, with search history and so much more.

12:58So it's no surprise to me that there is a race to have all of the data about our payments and transactions because I think there's going to be big money in that for them. And we felt it was important to make sure that the existing laws, financial privacy, fraud, all of it, were actually being enforced. There's the argument from Silicon Valley that I hear all the time that the regulations are actually too burdensome, that it prevents them from building all the things they want to do. Do you think we had the appropriate set of regulations that just needed to be enforced more consistently and more transparency, or did we need more, or did we need less?

13:37In some cases, we need the laws and the rules to just have brighter lines, being very clear on this is what you can and can't do. And it is often true when the sausage is made and goes through the system, it can be complicated. But, you know, at the same time, these are laws and rules. And when a small bank or a tiny tech company violates them, they feel like their whole business is on the line. But when the biggest players violate those laws, sometimes with impunity, it feels like they just get a fine and they move on. And I think that was something that I really tried to correct. that we should focus on the biggest actors that are repeat offenders and to make sure that all the little players were not being choked off by some of the biggest gatekeepers and banks.

14:40And I'm not saying we ever got it perfectly right, but we have to have laws and we have to enforce them. At a very fundamental level, having and enforcing laws feels like it should be simple. But of course, it often isn't. Maybe right now, more than ever. We have to take a quick break, but when we come back, we'll get into what's happening with the CFPB now. We'll be right back.

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17:03Welcome back. I'm talking with former CFPB head Rohit Chopra. Right before the break, he was explaining that although the letter he got firing him from his job had President Trump's signature on it, he doesn't really know who actually orchestrated his firing, because this administration is not only opaque, but made up of a whole bunch of factions that don't always see eye to eye themselves. That brings us to now at the CFPB. Obviously, you have left, but there have been lawsuits about the agency. The employees are theoretically supposed to be back at work. It's unclear if they're actually working.

17:36What is the current status of the agency? There is lots and lots of money being completely wasted by putting all of the staff essentially on the bench. They are not continuing investigations. They are not distributing money that are supposed to be refunded to people. they are not doing those basic inspections of very large financial companies that the law specifically instructs them to do. Right now, there's lots of litigation about this. A court has put a pause on any further destruction to the CFPB. But of course, the proof is going to be in the pudding. When are they actually going to enforce the law and do their job?

18:25Or are they just going to keep paying people to sit at home. Do you think the courts are going to allow Trump and Musk to just dismantle an agency without an act of Congress? The president can't unilaterally repeal a law. Do you think it's possible to maintain the CFPB and its enforcement actions in the sort of economy that Trump seems to envision where we're doing tariffs on big partners? We're trying to move a lot of investment back in the United States, and then we're basically deregulating huge swaths of the rest of the economy. I think that is a recipe for a mess. There's greater signs right now that the country could be heading into a recession.

19:07And if there is a recession, that's a time when we start seeing the auto repossessions, the mortgage foreclosure, the student loan defaults. And that's exactly when you need a CFPB. Because if you do not have any watchdog and you just have a lapdog, that will be a place where families across the country could just lose trillions and their lives could be turned upside down. You can see that there's a remarkable appetite for pain from this administration in particular. And you hear the Treasury Secretary Scott Besson say the American dream is not cheap flat screens. You heard Elon Musk on the campaign trail say there will be some temporary hardship.

19:52You hear Donald Trump basically tell people to get over it. And then there's the stuff with Doge in particular that seems related to that bigger goal, right? They've wanted deep access to the payment system. That was one of the very early controversies. They want lots of access to data. They're insistent on getting access to social security in some way. How is that related to the work you were doing at the CFPB? Obviously, they probably want that data as well. And do you see some larger design here that makes sense to you? I don't. And I don't think there is anything really efficient about offering buyouts to employees.

20:32And then most of the people taking them were the ones who were planning to retire or planning to leave anyway. I don't think it's really efficient to lay off the people who are prosecuting companies that are fleecing the public from billions. So this does feel like an effort to delete and destroy rather than make more efficient. Why they're doing it, I don't know. But we're all going to pay the price. We might pay more for our loans. We might pay more in our financial life. But there's going to be a lot of hidden ways that we pay more, especially when it comes to health and safety. The more that the skies are not being patrolled, the more that toys and food is not being inspected, that's just going to have costs that you can't easily quantify.

21:29Do you think that there's some specific reason they're going after the treasury systems and the social security systems? I don't. I have heard a wide range, but the idea of having that level of insight into all payment transactions flowing from the government, it really makes people raise their eyebrows as to what is that data being used for and who is it being handed to. And it seems like there's many instances where there is full admin privileges being given to employees to hunt through the data assets of key agencies. Do you think DOJ has been successful in finding any waste, fraud, or abuse?

22:18I'm sure. I mean, look, this is a constant thing. When I was leading this agency, there were places. We cut contracts. We eliminated a lot of the executive positions that my predecessor had created. And I'm sure there's some. I just don't know whether that's really the true goal. The CFPB's work over the last decade kind of made a lot of invisible things visible. If I'm having a bad interaction with a bank, well, there's just one of me against a big bank. I'm probably not going to be able to even pick a fight, let alone win it. But if the bank is hurting a lot of people, then an agency like the CFPB can see all those complaints and be empowered to actually do something about it.

22:57Another agency we see that kind of dynamic with is the Federal Trade Commission. You were one of the Democratic commissioners at the FTC during the first Trump administration. But I'd say the FTC has not really been as effective as it could have or should have been for most of the last 40 years. The Reagan administration really pushed it into a really hands-off position. And even Democratic administrations since then have not been as effective as they maybe should have been. But Biden brought in Lena Kahn as his FTC chair, and she got pretty well known for trying to make the FTC really aggressive, particularly against big tech.

23:29And now in Trump's second administration, he's fired the two Democratic commissioners, presumably to make the agency more compliant with his own vision. That seems to be illegal. They're assuming that's another episode. But the chair who replaced Lena Kahn, Andrew Ferguson, also seems pretty aggressive when it comes to big tech, and he's following some of Kahn's policies. It's kind of a tangled web. I'm wondering if you can unpack all of that. I think what you're seeing is two competing visions about what should the economy look like. There is a more populist version of that, which has some, you mentioned, you know, the new chair, some maybe support there.

24:12I don't know. But we'll see how it plays out in that Facebook case that goes to trial. We'll see how it plays out in that Google case. You know, I remember voting out that Facebook case in 2020, but it was not done with much support from Republican commissioners. It was two Democrats. I was one of them and one Republican. So it has always been a little bit difficult to follow how this plays out. But that's something I'm going to closely watch. I'm also going to closely watch on big bank mergers. Are they going to keep allowing some of the worst anti-competitive practices and mergers, or are they going to stand up to it?

24:57And the jury's out right now. I think everyone understands that they can't fight Facebook alone, that posting the copypasta about I don't give my copyright to Mark Zuckerberg on Instagram accomplishes approximately nothing. But if you look at a million people doing it, well, that's a million people who would like to renegotiate their terms of service with Meta. And that, I think, crosses party lines. That doesn't feel polarized to me, that people are sort of unhappy with the deal they're getting from tech giants across the board, particularly when it comes to their content and how it's used and their data and how it's used.

25:31Whether or not they really understand the details of it, there's a sense that more value is being taken away than being given back. I think that's right. I mean, look, there are so many things that large, powerful firms do, knowing that maybe it will piss off a couple of customers and they'll complain. But for the most part, they know human behavior will click through that contract or agree to the new terms and conditions. And in some cases, we know that this is a business model. So many things, for example, have turned into subscriptions, knowing that they're just going to get more revenue because it's annoying to cancel.

26:12We found one bank charging a paper statement fee. It was a small fee, but they didn't print the statement or mail the statement. It was just a way to see if they could get away with it. So I agree with you. It's not really all that controversial, but this is the age we live in where there are a handful of firms that have so much power in the economy that we almost feel coerced into using them. And the only check on that is often working collectively to enforce the law through our agencies. The timing of this conversation, literally us recording right now, is pretty interesting. A few hours ago, Mark Zuckerberg was spotted walking into the White House.

26:59At the same time, about an hour ago, you were on stage with Steve Bannon at a Y Combinator conference, which seems pretty unlikely all around. I looked at all that, and it all feels very relationship-based. It doesn't feel stable. It feels like the game is for everyone to cut deals and make friends. Like Zuck can go to the White House and offer to be useful to Trump if the White House can just make the FTC's antitrust case go away. But the Bannon wing of the MAGA movement wants Zuckerberg and everybody else out of the White House. Today, we literally had all these things happening at the same time.

27:28You and Steve Bannon talking about oligarchs. One oligarch was literally in the White House trying to curry favor. Like I said, this just doesn't feel sustainable. These things are going to have to come to a head. How do you see that playing out? I don't know. We have a lot in history we can look at. Recall that in the Nixon tapes, Nixon talked to his advisor once about making sure they opened up investigations against the big TV networks, almost to have a sort of Damocles over their heads. and the networks at some point decide all to air, I think this is right, Patricia Nixon's White House wedding, as a sort of olive branch that we're going to start giving you more favorable coverage.