How Russell Vought's Attack On The CFPB Puts Your Credit Cards & Auto Loans At Risk

Forbes

Russell Vought’s dismantling of the Consumer Financial Protection Bureau is putting the public at risk in areas ranging from auto loans and digital payments to credit cards and credit reports.  Read the full story on Forbes: https://www.forbes.com/sites/jeffkauflin/2025/11/03/trumps-gutting-of-the-consumer-financial-protection-bureau-is-leaving-the-public-vulnerable-to-abuses/  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00Today on Forbes, How Trump's Hatchet Man is Destroying Consumer Protections

00:05Two years ago, the Consumer Financial Protection Bureau, or CFPB, a federal financial regulatory

00:13agency, announced it was forcing Toyota Motor Credit to give consumers back tens of millions

00:19of dollars. In a press release citing consumers' complaints, the CFPB said that while selling

00:24bundled auto insurance and car servicing products, Toyota dealers had quote, lied about whether

00:30these products were mandatory, and sneakily included them in contracts without borrowers

00:35knowing it. Even more maddening, when consumers called Toyota to cancel the unwanted add-ons,

00:42representatives had been trained to keep promoting the products until the customer asked to cancel

00:46three times. Then customers still couldn't cancel during those calls. They had to take yet another

00:52step and submit a written request. Between 2016 and 2021, Toyota funneled 118,000 calls

01:00to this hotline. In 2023, the CFPB ordered the company to give customers back $48 million and

01:07pay a $12 million fine for these and other violations. But earlier this year, the Trump

01:14administration, in its quest to roll back financial regulation, erased that ruling, terminating

01:20Toyota's obligation to pay consumers the $48 million. The same thing happened to a CFPB settlement

01:26with large credit union Navy Federal. The financial institution had agreed to give $80 million back

01:32to consumers for improperly charging overdraft fees while customers, including active duty service

01:38members and veterans, showed a positive balance at the time of their transactions, an order that has

01:43since been reversed. In permanently dismissing 22 CFPB enforcement actions, the Trump administration

01:50has caused at least $120 million due to be paid to consumers to stay in companies' pockets.

01:57And if the current administration continues canceling CFPB orders, another $240 million slated to be paid

02:04out might not reach consumers either, according to not-for-profit consumer advocacy groups,

02:09the Consumer Federation of America, and protect borrowers. At the urging of Trump nemesis

02:15Senator Elizabeth Warren, Congress created the CFPB after the financial crisis as part of the

02:21Dodd-Frank Act, which President Obama signed into law in 2010. The agency was tasked with enforcing

02:28financial laws, making regulatory rules, and supervising financial services companies, especially

02:34non-banks, since they often fell in the gaps between banking and securities regulators.

02:40Since its creation, the CFPB has ordered companies to provide $20 billion in relief payments

02:46to 195 million consumers and to pay $5 billion in fines. The Trump administration has brought nearly

02:54all of that activity to a halt. This year, the CFPB will likely bring the lowest number of enforcement

03:01actions since its inception. And Russell Vogt, the Director of the Office of Management and Budget

03:06and Acting Head of the CFPB, recently said he aims to shut the entire agency down in two to three

03:12months. Eric Halperin, the CFPB's former enforcement director, who left the agency in February, says,

03:20quote,

03:20Never before in the CFPB's short history have we seen such an almost complete abandonment of its

03:26obligations under the law. Vogt's moves are part of a broader plan to dramatically shrink the size of

03:33the government. He seems to view the CFPB as duplicative of other regulatory agencies and

03:38hostile toward businesses. Rohit Chopra, the head of the CFPB under President Biden, was often

03:45criticized by industry executives and accused of bringing enforcement actions that went beyond the

03:50CFPB's legal scope of power. But former regulators and financial services executives Forbes spoke with

03:56for this story all believe that killing off the CFPB will do more harm than good. The short-term

04:03winners from the regulatory pullback are numerous. They include megabanks like JPMorgan Chase, Bank of

04:09America, and Wells Fargo that saw a major lawsuit against them dismissed. The suit accused the banks

04:15and early warning services of not doing enough to prevent hundreds of millions of dollars of fraud

04:20on Zelle, the money transfer app they co-own and operate. Last December, Zelle called the suit,

04:27quote, meritless. The big three credit bureaus, Equifax, Experian, and TransUnion, now have lighter

04:34oversight by a CFPB that has fined them in the past for not doing enough to fix errors on consumers'

04:40credit and tenant screening reports. And non-banks and fintechs, big and small, that aren't under the

04:45purview of other federal regulators, will now likely feel less pressure to comply with the law.

04:51Financial institutions have clearly gotten the message that there are fewer cops on the regulatory

04:56beat. For full coverage, check out Jeff Coughlin's piece on Forbes.com. This is Kieran Meadows from Forbes.

05:05Thanks for tuning in.

05:15Thanks for tuning in.

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