Trump’s Push to Dismantle CFPB Faces Backlash Amid Financial Scandals and Musk’s Involvement

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Bente Birkeland
February 12, 2025
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7 minutes read

President Donald Trump’s push to dismantle the Consumer Financial Protection Bureau (CFPB) is facing mounting criticism, with legal experts arguing the move likely violates the separation of powers. However, former Labor Secretary Robert Reich suggests there may be even more at stake than just constitutional concerns.

In a detailed post on Facebook, Reich pointed to suspicious timing, arguing that the Trump administration’s attack on the CFPB coincides with financial scandals directly linked to the president. “Thousands of investors in Trump’s crypto scheme lost $2 billion in just weeks while the Trump Organization racked up $100 million in trading fees,” Reich wrote.

“Just so happens that the CFPB, which Trump is trying to kill, recently announced new regulations for the crypto industry.” The CFPB, established in the aftermath of the 2008 financial crisis, is the only federal agency solely dedicated to protecting consumers from financial misconduct by banks and other institutions.

Its new rules on cryptocurrency oversight were set to impose tighter restrictions on digital financial markets—just as Trump-backed crypto tokens began to crumble. At the time of Trump’s inauguration, a wave of Trump-themed cryptocurrency coins hit the market, riding a wave of support from his followers. Many of these coins initially surged in value, only to collapse once the hype faded.

Donald Trump Tuxedo — (Photo by Eva Marie Uzcategui/Getty Images)

Furious investors, many of them die-hard Trump supporters, claimed they had been misled. Reich is not alone in suspecting ulterior motives behind the dismantling of the agency. Sen. Elizabeth Warren (D-MA), the key architect behind the CFPB, also raised concerns about another major figure involved in the bureau’s takedown: tech billionaire Elon Musk.

Musk, a vocal Trump ally, publicly celebrated as his software engineers reportedly assisted in efforts to shut down the agency. Warren warned that Musk’s enthusiasm for gutting the CFPB might be linked to his own financial ambitions—specifically, his push to expand X into a full-scale financial transactions platform.

With both Trump and Musk standing to benefit from reduced financial oversight, critics argue that the attack on the CFPB is about more than just regulatory overreach—it’s about clearing the path for unchecked financial dealings at the expense of ordinary consumers. As legal challenges mount and political scrutiny intensifies, the fate of the CFPB—and the motivations behind its dismantling—remains at the center of a growing controversy.