Warren Asserts Only Congress Has the Authority to Abolish CFPB, Challenging Trump and Musk's Efforts

Senator Elizabeth Warren insists that only Congress has the power to dismantle the Consumer Financial Protection Bureau (CFPB), directly confronting the Trump administration’s recent actions / AP Photo/Jacquelyn Martin

Senator Elizabeth Warren (D-Mass.) reaffirmed her position this week, stating that it is solely within Congress's power to dissolve the Consumer Financial Protection Bureau (CFPB), despite the recent freeze on its operations under the current President Donald Trump administration. Speaking in an interview with Yahoo Finance, Warren emphasized that neither President Donald Trump nor tech billionaire Elon Musk could legally shut down the agency.

Warren’s remarks come in response to the recent actions taken by the Trump administration and Musk’s new Department of Government Efficiency (DOGE), which has moved to freeze the CFPB’s operations. The senator made it clear that any efforts to shut down the CFPB would be met with legal challenges, asserting that the law is unequivocal on the matter. “It is Congress that created the CFPB, and only Congress has the authority to eliminate it,” Warren said.

She went on to explain that if Trump and Musk continue to push for actions contrary to the law, legal action would be necessary. “We’ll go to court if we have to,” she added, underscoring her readiness to defend the CFPB and its critical role in overseeing consumer financial protections.

Warren’s public statements come as she and over 200 other lawmakers sent a letter to Russ Vought, the acting CFPB director, and Treasury Secretary Scott Bessent. The letter demands that DOGE operatives, appointed by Musk, be removed from the CFPB and that the agency's operations be fully restored. Additionally, Warren has voiced support for Jonathan McKernan, nominated to serve as the CFPB’s permanent director.

The CFPB, created in the wake of the 2008-2009 financial crisis, was designed to protect consumers from unfair practices in the financial services sector, covering everything from payday loans to credit cards. Warren, who played a pivotal role in the agency's formation, has continually defended its mission and expressed concern over recent moves to undermine its operations.

Reflecting on the Trump administration's recent directive to halt the CFPB’s activities, Warren described the agency as a "cop on the beat," whose purpose is to ensure that large financial institutions are held accountable for their actions. She criticized Musk’s involvement, saying that his directives would essentially stop the agency from fulfilling its mission, leaving consumers vulnerable.

The recent freeze order, which barred employees from reporting to the agency’s Washington headquarters, came after Musk publicly shared his views on the CFPB, tweeting “CFPB RIP” and later stating that although the agency had done some good things, it was ultimately unnecessary. Warren, however, remains steadfast in her belief that the CFPB is crucial to protecting consumers and must not be dismantled.

Republicans, particularly those aligned with the Trump administration, have long been critical of the CFPB. Since its inception, many have argued that it represents unnecessary government intervention in the financial sector, citing the existence of other regulatory bodies. Some Republican lawmakers have even called for consolidating the CFPB with other agencies to reduce bureaucratic overlap.

Reports from The Wall Street Journal suggest that the Trump administration is exploring plans to streamline the number of banking regulators, potentially consolidating the Federal Deposit Insurance Corporation (FDIC) with the Office of the Comptroller of the Currency (OCC), though these proposals would likely bypass congressional approval. Warren has been vocal in opposing such moves, particularly the idea of merging the FDIC, which provides crucial deposit insurance, with other entities. She warned that eliminating the FDIC’s role could destabilize the financial system, creating unnecessary risks for consumers.

During a Senate Banking Committee hearing this week, Warren asked Federal Reserve Chair Jerome Powell who would assume the CFPB’s role if the agency were to be eliminated. Powell responded, “No other regulator,” underscoring the unique role the CFPB plays in consumer financial protection.

While Warren and President Trump share some common ground on the issue of lowering interest rates, with both calling for cuts to benefit American consumers, their approaches diverge significantly on the matter of financial regulation. Warren has consistently advocated for lower rates to ease the financial burdens on families, while Trump’s broader economic policies have also emphasized fiscal reform and tax cuts.

Warren’s firm stance on defending the CFPB highlights her commitment to ensuring that consumer protections remain intact, despite efforts by the Trump administration and Musk to sideline the agency. As the situation unfolds, legal battles are likely to intensify, as Warren and other lawmakers continue to challenge what they view as an unlawful attempt to dismantle a vital component of financial oversight.