What The Hell America!

March 20, 2025

The Honorable French Hill, Chair
The Honorable Maxine Waters, Ranking Member
Honorable Members
House Financial Services Committee
Washington, DC 20515

Dear Committee members,

On behalf of more than 500,000 members and supporters of Public Citizen[1], we  provide the following comment for the House Financial Services Committee hearing scheduled for March 26, 2025, regarding the Consumer Financial Protection Bureau (CFPB), titled  “A New Era for the CFPB: Balancing Power and Reprioritizing Consumer Protections.” We draw your specific attention to actions by Elon Musk that may be in violation of federal conflicts-of-interest law.

Too often, financial firms prey on vulnerable Americans with unfair, deceptive and/or abusive practices. At times, such predation can reach systemic proportions, evinced by the 2008 financial crisis. Leading to this calamity, which cost millions of Americans their jobs, their homes and their life savings, mortgage makers engaged in massive fraud, indenturing citizens with expensive, untenable mortgages. Congress responded with the 2010 Wall Street Reform and Consumer Protection Act. This established the CFPB with the singular responsibility to protect consumers.[2]

Since its establishment, the CFPB has returned more than $21 billion to some 200 million victims of financial scams. It has protected other potential victims with vigorous supervision and enforcement. In 39 enforcement actions, the CFPB has returned more than $360 million to servicemembers and veterans. The CFPB has reduced junk fees, saving consumers some $5 billion annually.

The Trump/Musk administration aims to eviscerate this agency in service to predators and to Elon Musk himself. We believe Musk’s efforts violates federal conflicts law. In brief, Musk intends to create a payment service associated with his social media firm Twitter/X.  Because Congress authorized the CFPB to regulate such a project, any work by Musk and his agents at the CFPB would create a conflict of interest.

As provided in 18 USC 208, any “employee of the executive branch . . . including a special government employee,” who “participates personally and substantially ,. . . through decision, approval, disapproval, recommendation, the rendering of advice, investigation, or otherwise, . . . in which, to his knowledge, he . . . . has a financial interest shall be subject to penalties.” Further, “Whoever willfully engages in the conduct constituting the offense shall be imprisoned for not more than five years.”

The White House designated Elon Musk as a special government employee, according to news reports, and/or “an employee in the White House office,” according to legal filings. He is therefore subject to 18 USC 208.

His efforts to render “advice” regarding the CFPB are abundant and transparent. For example, he tweeted “Delete CFPB” and “CFPB RIP.”

Meanwhile, Musk’s “financial interest” in the activities of the CFPB are similarly abundant.  Musk and his associates are slaloming through numerous government agencies where he also appears to have conflicts of interest. For the reasons described below, his actions in connection with the CFPB deserve special scrutiny.

His business decisions following his acquisition of Twitter have proven shaky, with some advertisers leaving the platform over concern with some of his public pronouncements. To right this ship, Musk has promised to turn Twitter—which he renamed X—into an “everything” product that includes a PayPal-like payment service (as well as a dating service, video platform, telephone service and more). Musk recently signed an agreement with Visa for use of Visa’s digital payment network to allow users on X to use their debit cards to make payments to their peers.

The concern that Musk’s payment system and other financial services enterprises that he might engage in will act unfairly or engage in misconduct is real, as evidenced by the fact at least nine agencies are investigating possible misconduct at three of his businesses.

Regulation of payment products such as the one envisioned by Musk falls within the CFPB’s purview. In fact, the CFPB has been “seeking public input on strengthening privacy protections and preventing harmful surveillance in digital payments, particularly those offered through large technology platforms.” Accordingly, the work at CFPB of Musk and people under him presents a direct conflict of interest.

Separately, Musk’s access to data and other information held by CFPB raises the concern that he may be privy to confidential information about potential rivals, including conventional banks and technology companies. As noted by the New York Times,  the CFPB “has opened several investigations of e-payments systems. The data collected in its investigations includes correspondence between executives, secret business plans and market analysis.”

As the committee reviews the CFPB, we ask it to take appropriate steps to pursue enforcement of federal conflicts of interest laws.

For questions, please contact Bartlett Naylor at bnaylor@citizen.org.

Sincerely,

Public Citizen

[1] Public Citizen is a nonprofit consumer advocacy organization with members in all fifty states. Public Citizen regularly appears before Congress, administrative agencies, and courts to support the enactment and enforcement of laws protecting consumers, workers, and the general public.

[2] When Congress assigned other banking agencies to enforce consumer protection laws, these regulators often subordinated protection to bank profits in achieving their other prudential obligations.