Donald Trump escalates assault on US consumer protection agency

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The Trump administration has intensified its assault on the US Consumer Financial Protection Bureau, claiming the agency it is trying to dismantle has cost Americans hundreds of billions of dollars in extra borrowing costs.

A report prepared by the White House’s Council of Economic Advisers, seen by the FT, found the regulatory burden imposed by the agency has led to higher prices and reduced product offerings. It estimated this has cost consumers between $237bn and $369bn.

“The CFPB has been conscripted to advance a radical agenda that achieves precisely the opposite outcomes of what its leftist champions claim,” acting director Russell Vought told the FT. “[It] has prevented Americans from accessing credit and made life dramatically more unaffordable.”

Vought has said he wants to “close down” the agency, which was set up to protect consumers in the aftermath of the 2008 financial crisis.

The report’s findings are similar to previously disputed calculations by the agency’s supporters. The report comes after the administration spent months trying to neuter the CFPB, only to be thwarted by court rulings that ordered the government to keep running the agency — which enjoys broad public support — while litigation proceeds.

It also follows a report this month from senator Elizabeth Warren, the architect of the CFPB, and other Democrats on the Senate banking committee, which claimed the White House’s attempts to gut the agency had cost American consumers up to $19bn by allowing them to get “scammed . . . by big banks and giant corporations”.

The agency’s own statistics show it has returned almost $20bn to consumers since its formation in 2011 and fetched $5bn in fines. Data compiled by the CFPB also shows it has received at least half a million complaints from consumers about financial companies in the past year.

Critics of the CFPB, including Republicans in Congress, conservative legal scholars, trade groups and libertarian think-tanks, have argued the agency imposed burdensome regulations on financial groups and consequently helped restrict credit availability.

The White House report attempts to add ballast to these claims by comparing the cost of credit for mortgages subject to CFPB regulations to those that are not.

“We find that borrowers of these regulated loans paid on average 4.3 per cent more in interest (or 16 basis points) compared to borrowers not subject to CFPB regulations,” the report said.

The report claimed that across three forms of consumer credit — mortgages, car loans and credit cards — the CFPB had “increased consumer borrowing costs by between $222bn to $350bn from 2011 through 2024”.

The agency’s work has been brought to a near-standstill by the Trump administration, which has placed staff on leave and dismissed dozens of enforcement actions including one against a company tied to Donald Trump Jr.