THE CFPB: THE LITTLE PERSONAL AGENCY

Elizabeth Warren's CFPB didn’t regulate - it destroyed. First published in Visegrad24 on February 14, 2025. Reprinted here (with their subheadlines).

This week President Trump said that Elizabeth Warren set up “the Consumer Financial Protection Bureau (CFPB) to destroy people - She used that as her little personal agency to go around and destroy people.”

I have never met President Trump. I have never met Senator Warren. But I can tell you I think he is right.

Warren’s Anti-Business Army

The CFPB was Warren’s brainchild from her days as a professor at Harvard Law School (HLS), where I graduated in 2005. After Barack Obama, her protégé, was elected President, he initiated the creation of Warren’s dream agency and named her its Special Advisor, a role that evolved into its current Directorship.

She hired its first staffers, including many of her former students from my cohort at HLS, some of whom I knew personally. They were invariably bright and inexplicably consistent in their grievance-oriented antipathy toward “business,” which they perceived as an unchecked evil in American life. The team she assembled was suspicious of anything that looked like success.

The CFPB’s Crusade Against Everyone

In part, their suspicion was justified. Shortly after the CFPB was created in July 2011, the agency launched an investigation into some of the largest financial institutions in the United States. A couple of them, most notably Bank of America, had been selling credit monitoring products to consumers in deceptive ways. The evidence was obvious. Bank of America paid a massive penalty in 2014. Wells Fargo was soon caught up in similar allegations.

Though the uncovered dishonest marketing behavior was, at the time, fairly rife inside two large banks, it was not widespread among card issuers or financial institutions. But Warren wanted everyone to think it was. Perhaps she and her agency acolytes really wished it were true that deceptive marketing was the daily bread of the great majority of American banks. But of course it was never true. All she could do was shout and tout her crusade against predatory capitalism taking advantage of unknowing Americans.

And shout she did. Obama gave her a cudgel, and she threatened to use it. In speeches, testimony, and agency directives, Warren made it clear that she was going to investigate every major financial institution in America that sold credit card subscription products. Her agency indicated that banks and credit card issuers – companies that had been subject to heavy oversight by numerous overlapping federal agencies before the creation of the CFPB – would be deemed guilty until proven innocent when her troops descended to review their past marketing claims.

Warren’s Financial Bloodbath

These companies were faced with an implacable, infinitely-resourced, vendetta-driven self-imagined cowgirl sheriff. They did the only rational thing. Instead of standing their ground, pointing to careful disclosures and countless examples of successful customer benefits and service outcomes, they folded in response to her rhetoric.

They preemptively terminated identity theft and credit monitoring products. They even fearfully ended unrelated subscription products that had been sold to happy wealthy customers such as send-me-the-fancy-wine-of-the-month clubs. It was a kind of business bloodbath. Small companies providing these products were irreparably harmed.

The regulator was gleefully shooting before aiming, and the financial institutions calculated that their most prudent response was to duck and cover.

The CFPB’s Collateral Damage

At that time, I was running a consumer privacy startup. We sold a popular product that reduced the digital footprint of our customers’ personally identifiable data by removing them from online databases. It was unique in the market. One of the most important credit card companies in America signed a deal with us to provide our product to its most valuable consumer customers, who were understandably concerned about their personal data.

A day before the launch of this partnership – which would have been game-changing for my company – the credit card issuer canceled all or virtually all subscription programs in its roster, killing our deal hours before it was to begin. Years of hard work vanished instantly. Our credit card partner cited Warren’s undifferentiated bombast as the reason for their fear.

The culprit was a vindictive, capricious, prideful regulator who decided that she was on a holy crusade for which widespread collateral damage was a happy inevitability. Never mind how many other startups and small businesses suffered in the CFPB’s noisome, chaotic lurching.

We can also imagine how many American consumers – the very people Warren imagined she was rescuing– lost access to vital products and enjoyable services that they explicitly wanted.

Warren’s CFPB: A Personal Empire of Control

In 2012, Elizabeth Warren was elected to the US Senate, where she has continued to champion her CFPB devotees’ approach of wielding cudgels instead of scalpels. Her mantra has been that the Department of Justice, the Federal Trade Commission, the Consumer Product Safety Commission, and the Federal Deposit Insurance Corporation are insufficient to protect Americans. Indeed, she needs her own agency, the CFPB, to do her own personal bidding.