Elon Musk is going after the very institution that would serve as a check on some of his business empire.
The world’s richest man has long talked about making a payment-type system on his platforms, namely X, where users can send and receive money. In fact, just days after Musk attended President Donald Trump’s second inauguration last month, X made its initial move to become a financial ecosystem when CEO Linda Yaccarino announced the launch of a digital wallet and peer-to-peer payment service, partnering with Visa. The plan is for it to launch later this year, according to CNN.
That type of program would usually be overseen by the Consumer Financial Protection Bureau - an agency Musk is trying to close through his Department of Government Efficiency. While Musk has touted saving taxpayers money, cutting the bureau could have a huge windfall for him.
Ethics experts say this is an obvious conflict of interest, with Musk, the richest person in the world, overseeing the end of CFPB at the same time as he’s in charge of businesses that would benefit from less financial regulation.
Last week, Musk wrote “RIP CFPB” on X. For good measure, he added a tombstone emoji.
President George W Bush's top ethics attorney and a University of Minnesota law professor, Richard Painter, told CNN that Musk would have to recuse himself from matters concerning CFPB - which launched after the 2008 financial crisis and serves as a watchdog on the financial sector - or possibly violate criminal conflict of interest legislation.
“Elon Musk needs to stay away from the CFPB. That’s cut-and-dry,” he told the network. “If there is any evidence that he has participated in a matter with the CFPB, impeding the work there, then he has risked violating the statute. That’s a slam dunk.”
A White House official told CNN: “As an unpaid special government employee who is not a commission officer, he will file a confidential financial disclosure report per the norm.”
Painter noted that the criminal conflict of interest law applies to all federal officials apart from the president and vice president.
“It applies to special government employees – everyone from the secretary of the defense to the janitor who orders toilet paper,” he said.
Another Musk-run company that may benefit from the gutting of CFPB is Tesla, which provides car loans that the agency oversees. CFPB employees are not allowed to own Tesla stock, but the largest shareholder in the company is now leading the charge to shut it down.
“Delete CFPB. There are too many duplicative regulatory agencies,” Musk wrote some weeks after Trump’s election win.
“If the boss says, ‘CFPB RIP’ and that it should be deleted, recusal is a little late here. You already told everyone their marching orders,” University of Utah law professor and former CFPB official Christopher Peterson told CNN.
On Monday, the White House said the CFPB has “long functioned as another woke, weaponized arm of the bureaucracy that leverages its power against certain industries and individuals disfavored by so-called ‘elites.’”
“Under the administration of President Donald J. Trump, the weaponization ends right now,” they added.
Trump also responded to a reporter, saying that he was aiming to end the CFPB “because we’re trying to get rid of waste, fraud, and abuse.”
Better Markets is a nonprofit working for harsher financial regulations. Its CEO, Dennis Kelleher, told CNN that Musk “is trying to cripple an agency that is trying to protect consumers who he is trying to sell products and services to.”
On Tuesday, Musk was speaking alongside Trump in the Oval Office, claiming to have been “maximally transparent,” arguing that the public can take action if he’s “doing something that benefits one of my companies or not.”
Trump added: “If we thought that, we would not let him do that segment or look in that area if we thought there was a lack of transparency or a conflict of interest.”
Senator Elizabeth Warren, a Democrat of Massachusetts, was instrumental in the creation of the CFPB. She rallied outside its headquarters on Monday.
“This is like a bank robber trying to fire the cops and turn off the alarms before he strolls in the lobby,” she said, according to The Washington Post.
