What’s cooler than being cool? Ice cold! President Trump just put the Consumer Financial Protection Bureau (CFPB) on ice. What does the CFPB do, anyway? Does this icy cold decision impact our paychecks?
We’re gonna break this thing down in just a few seconds. Lend me some sugar, I am your neighbor.
Here’s Five Fast Facts on what’s going on with the CFPB:
- 🛑 Hard Stop - Recently Trump decided to fire the head of the CFPB. Then, the new director of the Office of Management and Budget told everyone at the CFPB to stop working. That means that work on any proposed rules was halted, along with any investigations or examinations.
- 📊 Back In the Day - After the 2007/2008 financial crisis, the CFPB was created to protect consumers from shady financial practices. The bureau’s goal was to keep financial products “transparent, fair, and competitive.” Since it started, the CFPB won back $17.5 billion for Americans and slapped another $4B in penalties on companies and individuals who broke the law. The CFPB also fights against “junk fees,” putting limits on credit card late fees and overdraft fees. The bureau was also behind the ruling to remove medical debt from credit reports.
- 🤑 Who’s Fund Is It, Anyway? - Despite all the good intentions, the CFPB has had critics since the beginning. Some members of Congress say the structure of the bureau allows it to do things without proper accountability and oversight. Funding for the CFPB also comes directly from the Federal Reserve, which some say is sus. For most other federal agencies, Congress makes the funding decisions. Critics warn this opens the door for wasteful spending and fraud.
- 🧊 Deep Freeze - Trump’s decision to freeze the CFPB means $711.6M of current funding is now locked up. Supporters of the president’s decision say this will help stop the agency from pushing political goals over what’s best for consumers. For example, getting rid of certain types of fees could make it more likely that banks will turn around and come up with new ways to hurt consumers’ wallets.
- 🥶 Too Cold - Those opposed to the freeze argue that the CFPB was created by Congress and signed into law by Obama, so it's protected by law. Critics also say that, without the CFPB’s protection, banks and financial institutions could continue to take advantage of consumers. With the rise of AI and big tech, they fear it’ll get easier for them to swindle Americans.
🔥Bottom line: Trump’s certainly sending shockwaves through the system. Depending on which side you’re on, your opinion on it all could be totally different than your neighbor’s. To stay sane, keep your head above water and look for the facts! If you’re also confused about the Panama Canal, we’ve got a hot one for ya. Head over to this article and read up on what’s going on down there.
Are you for or against the freeze of the CFPB?
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