By Aissa Canchola Bañez | February 10, 2024
Late last week, the richest man on the planet, Elon Musk, and his Department of Government Efficiency (DOGE) accomplices took over the Consumer Financial Protection Bureau (CFPB)—the government agency charged with protecting everyday Americans from being ripped off by big banks, student loan companies, and other financial players. According to news reports, Musk has taken over sensitive data and confidential supervisory information that the CFPB gathers from companies in order to keep consumers safe. In a flurry of announcements over the weekend, acting CFPB Director Russell Vought—key architect of the right-wing Project 2025 playbook—also brought the oversight work of the consumer protection agency to a halt, closing the HQ offices and directing staff to stay home. The moves mark the most recent wave of President Trump and Elon Musk’s chaos campaign and most recent attempt to illegally dismantle a federal agency. The move also marks the beginning of a new era where students and working families will be left to fend for themselves in the financial marketplace.
Without the CFPB, financial predators will get free rein.
It is important to remember the devastation that prompted the creation of the CFPB. In the wake of the 2008 financial crisis, the CFPB was established as an independent agency to enforce consumer protection laws and protect people from financial companies engaging in unfair, deceptive, and abusive practices. Since opening its doors, the CFPB has directly obtained over $21 billion in relief for over 205 million people from companies that illegally cheated consumers. This includes more than $5 billion in relief for Americans with student debt, and uncovering evidence that led to the U.S. Department of Education cancelling $188.8 billion of student debt for 5.3 million borrowers. The CFPB has been hard at work over the last decade and is broadly popular among both Democratic and Republican voters, and the agency has received support across many different sectors.
Unsurprisingly, the big banks and shady companies that have been forced to return money to our pocketbooks are angry and have continued trying to attack the CFPB and undermine its consumer protection work. With President Trump and Elon Musk in power, it seems these companies have found their perfect allies.
The CFPB has fought for and delivered for student loan borrowers.
The CFPB provides critical protections to student loan borrowers who have been cheated. It has taken actions to hold institutions, private student loan companies, and student loan servicers accountable. Here are just a few examples:
- Permanently banned student loan servicer Navient for its years of failures and lawbreaking in the student loan market. The CFPB found that Navient failed borrowers at every stage of repayment by steering borrowers away from more affordable repayment options, allowing interest charges to rack up, and pushing millions of Americans further into debt. Navient was required to pay a $20 million penalty and provide $100 million in redress for harmed borrowers.
- Secured more than $1 billion in debt relief for students misled by former for-profit giants like Corinthian Colleges, ITT Tech, and Ashford University. The CFPB found that these schools lured tens of thousands of students to take out high-cost private student loans destined to default, and then targeted them with aggressive debt collection tactics. Consumer complaints and evidence uncovered in these CFPB enforcement actions led to the U.S. Department of Education, other federal regulators, and a group of bipartisan state attorneys general taking additional action against these schools and providing an additional $4.5 billion in debt relief for 261,000 former students.
- Saved more than 100,000 military borrowers tens of millions of dollars in interest payments. After receiving complaints from these military borrowers, the CFPB shared its findings with the Department of Justice and the Federal Deposit Insurance Corporation who then took enforcement action to return $60 million to 77,000 servicemembers who were overcharged by Sallie Mae.
- Ordered big banks—including Wells Fargo, Citibank, and Discover—to pay $30.15 million in redress to student loan borrowers and more than $33.8 million in penalties for engaging in illegal servicing practices. The CFPB has caught big banks charging consumers illegal fees and engaging in illegal debt collection tactics. These actions have strengthened the student loan repayment process for millions of borrowers.
- Sued the National Collegiate Student Loan Trusts for unlawfully filing debt collection lawsuits against private student loan borrowers, returning $2.25 million in redress for these borrowers. The CFPB found that the National Collegiate Student Loan Trusts sued borrowers for debts they couldn’t prove these borrowers owed, filed false and misleading affidavits against these borrowers, and attempted to collect on these debts after the statute of limitations expired.
- Filed a lawsuit against the Pennsylvania Higher Education Assistance Agency (PHEAA) for illegally collecting on student loans that had been discharged in bankruptcy and sending false information about consumers to credit reporting agencies. The CFPB alleged that PHEAA harmed borrowers by not tracking when their loans had been discharged via bankruptcy and falsely telling borrowers they still owed payments on discharged loans. The company also collected on and furnished inaccurate information about these discharged loans.
Since its creation, the CFPB has received more than 100,000 complaints from student loan borrowers, which have spurred federal and state regulator actions that have provided billions in relief for Americans with student debt. But Musk and Vought’s order directing the staff of the CFPB to stop working leaves borrowers to fend for themselves against companies that engage in abusive practices and extract billions in junk fees from everyday people. Musk is following through on his threat to “delete” the CFPB and it will have a direct impact on your pocketbook.
Borrowers must stand up and demand policymakers push back against this illegal effort to shutter the CFPB. Borrowers: Call** your representatives to tell them how important the CFPB is, and share your story of how the CFPB has helped you and your family on social media with the hashtag: #ProtectCFPB.
**To easily call your Members of Congress, dial (202) 224-3121 for the Capitol Switchboard, and they will direct you.
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Aissa Canchola Bañez is the Policy Director at the Student Borrower Protection Center. Previously, Aissa led outreach and engagement efforts for the Office for Students and Young Consumers at the Consumer Financial Protection Bureau.