According to President Musk, the CFPB has now been shut down. The CFPB was created after the 2008/2009 financial crisis by consolidating financial consumer protection functions from various other departments. Among other things, it’s been invaluable for consumers who are faced with abusive behavior or neglect on the part of their service providers. Anyone who has been on financial self-help forums has seen lots of stories of screwups or malfeasance of banks and credit card companies where customers are given an endless runaround by the bank until they finally contact the CFPB and all of a sudden the bank magically manages to resolve the problem.
That’s going to be over now.
But it’s way worse than that. The end of the CFPB leaves a huge regulatory and law enforcement vacuum. The CFPB had taken over many regulation and enforcement functions from other departments and agencies and those will just be gone now; what you’re left with will essentially be a largely unregulated/unpoliced market for consumer financial services.
It’s unlikely that there will be any kind of regulator in the next few years to step into the vacuum. I expect that it will be a golden age of scams, frauds and abuses on an industrial scale the likes of which the world has never seen, and it’ll run under the banner of “Fintech”. It will be interesting and horrific to watch. Much less fun if you’re an American who has to deal with financial service providers. I can only advise everyone to be very, very careful. It’s going to be the Wild West. Stay away from anything that even vaguely looks like “fintech”. When you’re purchasing services or products, stay as plain vanilla and simple as you possibly can and keep all the receipts and documentation.
It’s a dangerous new world.
