Recently we blogged about Elon Musk’s call to delete the CFPB. Musk was responding to an interview by Marc Andreesen on Joe Rogan’s podcast in which Andreesen attacked the CFPB as “sort of Elizabeth Warren’s personal agency that she gets to control … it’s an independent agency that just gets to . . . do what it wants. . . . [the CFPB gets to do] whatever she wants . . . terrorize financial institutions . . . .” And that’s not even the wackiest part of what he said, but before I get to the really weird part, I want to respond to those statements.
First of all, the CFPB is not, unlike, say, the Federal Reserve, an independent agency. It is under the president’s control. The president can fire the Bureau’s director anytime the president wants, and no doubt that is exactly what President-Elect Trump will do when he takes office, unless Director Chopra resigns first. Second, former CFPB Directors Mick Mulvaney and Kathy Kraninger would probably be very surprised to hear that Senator Warren got to control their agency when they were running it. They certainly had their share of battles with her. Third, someone should tell the courts in the Fifth Circuit that the CFPB gets to do what it wants because the Fifth Circuit courts keep blocking the Bureau from doing what it wants–namely, protect consumers. And as for terrorizing financial institutions, well, however financial institutions feel about the Bureau, it sure hasn’t stopped them from suing the CFPB nearly every time the Bureau issues a new rule, or sometimes just an interpretation.
Now that that underbrush is out of the way, let’s turn to the strangest part of Andreesen’s monologue: that the CFPB is forcing banks to debank certain people (meaning close their bank accounts). At various points in Andreesen’s remarks, the debanked seem to be tech people, people involved in crypto, or just right wingers. Assuming for the moment that some people have been debanked, I am not aware of any evidence whatsoever linking the CFPB to the debanking. For the claim that the CFPB is telling banks to debank its foes to be true, the banks would have to be simultaneously suing the CFPB and conspiring with it to bar people from opening bank accounts. And because debanked people could then seek to open an account with another bank, the CFPB would have to notify thousands of banks not to allow certain people to open accounts. Which would in turn mean that even if only one person per bank learns of this, thousands of people would know about the conspiracy. But as far as I have heard, not one of those people has come forward even though, according to Andreesen, they are being terrorized by the Bureau and so would presumably want to blow the whistle on it.
And it gets even sillier. We’ve had an election. All those bankers know that President-Elect Trump will name the next CFPB director. They probably also know that Trump doesn’t care much for Warren, whom he disparages as Pocahontas, and so Senator Warren is not going to control the Bureau. Which means that even if Senator Warren did control the Bureau at the moment and even if the Bureau did order the banks to close customer accounts, the Bureau folks doing that ordering are going to be out in the cold on January 20 and bankers who come forward now will, if anything, be lauded for doing so by the people who are about to take over. In fact, at the time the CFPB supposedly gave these orders to debank people, both the CFPB and the bankers would have known that the Republicans might win the election and their conspiracy would come to light, and yet, if Andreesen is right, engaged in the conspiracy anyway. How much sense does that make?
I’m not going to comment on Andreesen’s motive. Others have done so. But this charge just seems crazytown to me. It reflects poorly on financial institutions that know the truth that they have remained silent.
