Sen. Elizabeth Warren said Wednesday that the law clearly states only Congress can shutter the Consumer Financial Protection Bureau, setting up a potential legal clash with President Donald Trump after the administration moved to freeze the agency’s operations.
“It is Congress that created the Consumer Financial Protection Bureau, and it is only Congress, not Donald Trump, not Elon Musk … who can actually get rid of the CFPB,” Warren (D-Mass.) told Yahoo Finance in an interview.
If Trump and Musk, who oversees the new Department of Government Efficiency (DOGE), don’t abide by the law, she added, “then we’ve got to go to court and make that happen.”
Sen. Elizabeth Warren, D-Mass., speaks Monday during a protest in support of the Consumer Financial Protection Bureau at the CFPB headquarters in Washington. (AP Photo/Jacquelyn Martin) ·ASSOCIATED PRESS
Warren and 200 other lawmakers sent a letter Wednesday to acting CFPB director Russ Vought and Treasury Secretary Scott Bessent, calling on them to remove Musk’s DOGE operatives from the CFPB and restore all internal and external systems and operations. Jonathan McKernan has been nominated as the CFPB’s next permanent director.
“The law is clear on this, and the courts will enforce the law if Elon Musk and Donald Trump break it,” Warren told Yahoo Finance. “That’s how our system works.”
When asked whether she would be open to bringing the CFPB into the Congressional appropriations process to try to stabilize the agency and keep it operational, Warren said “the folks who want to kill it, want to kill it. They don’t want to change it a little bit. The appropriations argument has always just been a smokescreen.”
Warren was instrumental in the creation of the CFPB following the 2008-2009 financial crisis. Its mission was to oversee consumer finance at large financial institutions, monitoring everything from car loans and credit cards to checking accounts and payday loans. It draws its funding from the Federal Reserve.
“The CFPB is the cop on the beat and what co-president Elon Musk has done is he has told all the cops, quit doing your job. That is not making anybody safer,” Warren said.
Last weekend, the Trump administration ordered a halt to effectively all work at the CFPB and barred employees from showing up to the agency’s Washington, D.C., headquarters this week.
Elon Musk listens as US President Donald Trump speaks in the Oval Office of the White House on Tuesday. (Photo by JIM WATSON/AFP via Getty Images) ·JIM WATSON via Getty Images
Musk seemed to signal those moves were imminent on Friday afternoon, tweeting “CFPB RIP” just hours after members of 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 Trump administration is reportedly discussing plans to consolidate other bank regulators without Congress’s input, according to a Wednesday report in the Wall Street Journal.
The discussions include possibly folding the Federal Deposit Insurance Corporation into the Treasury Department and combining it with the Office of the Comptroller of the Currency.
Warren said lawmakers created these agencies, so only Congress can end them. She also criticized the idea of consolidating the FDIC with another agency because of the critical function FDIC serves as a deposit insurer.
The FDIC currently insures customer deposits at thousands of banks up to a level of $250,000 per account.
“But can we just stop to say, for a minute, what a really bad idea that is?” she said.
“Do we really think our financial system is going to operate better if we get rid of the FDIC insurance? Do you really want to be there the day that they’re scraping the FDIC-insured stickers off the entry doors to the banks all across America? I don’t think so,” Warren added.
The Federal Deposit Insurance Corp (FDIC) logo at the FDIC headquarters in Washington. REUTERS/Jason Reed/File Photo ·Reuters / Reuters
To be sure, it is not clear what would happen with the FDIC insurance backstop if it were to be combined with the OCC. The Journal reported that one proposal would leave FDIC in charge of deposit insurance and hand over the FDIC’s work supervising banks (and potentially shuttering failed lenders) to the OCC.
Warren remains concerned about what will happen if the CFPB is no longer examining how the nation’s largest banks are treating consumers.
On Tuesday she asked Fed Chair Jerome Powell during a Senate Banking Committee “who is doing that job” if the CFPB were not around.
Powell responded, “No other regulator.”
There is one area where Warren agrees with President Trump: She wants lower interest rates. In Tuesday’s Senate Banking Committee hearing, the senator called on Powell to lower rates at the central bank’s next policy meeting in March.
In a social media post on Wednesday, Trump also called for rates to go lower, although he didn’t specify whether he was talking about the Fed’s short-term rates or longer-term borrowing costs.
“Interest Rates should be lowered, something which would go hand in hand with upcoming Tariffs!!! Lets Rock and Roll, America!!!” he posted.
For her part, Warren told Yahoo Finance that she’s been urging the Fed to bring down interest rates for a long time now because she wants to see families be able to afford mortgages and pay off their credit cards without loans being sky-high.
Powell has instead been urging patience as the central bank evaluates the stubborn path of inflation and new trade policies from the Trump administration that some economists argue will push inflation higher.
“There’s a lot of economic turmoil right now created by Elon Musk and Donald Trump, and I understand how that gives the Fed pause,” Warren said. “I still want to see those interest rates come down. I think it’s the right thing to do. But we also need to stop this economic chaos. This is not helping American families.”
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