CFPB Shuts Down: Warren Threatens Legal Action Against Trump and Musk

Senator Elizabeth Warren (D-Mass.) has declared the Consumer Financial Protection Bureau (CFPB) is shielded from closure by Congress and threatened legal recourse against the Trump administration if it attempts to dissolve the agency.

"Only Congress can eliminate the CFPB, not Donald Trump or Elon Musk," Warren told Yahoo Finance. "We're prepared to go to court if necessary."

The Trump administration has effectively halted CFPB operations and ordered employees to vacate its headquarters. Musk, who leads the newly established Department of Government Efficiency (DOGE), has publicly stated his intent to dissolve the agency.

Warren and 200 other lawmakers have demanded the removal of DOGE operatives from the CFPB and restoration of its systems. Jonathan McKernan, the nominated permanent director, has also voiced opposition to the administration's actions.

"The law is clear and will be enforced if Musk and Trump break it," Warren stressed. "That's how our system works."

The CFPB, established after the 2008-2009 financial crisis, oversees consumer finance at large financial institutions, including car loans, credit cards, and checking accounts. Warren, who played a pivotal role in its creation, criticized Musk for disrupting its operations.

"Musk has instructed CFPB staff to abandon their duties, making us less safe," Warren said. "Many Republicans have long called for the CFPB's closure, but this move goes too far."

Warren also expressed concern over reported plans to consolidate other bank regulators, including the Federal Deposit Insurance Corporation (FDIC). She warned against eliminating FDIC insurance, emphasizing its critical function in protecting customer deposits.

"Do we really think our financial system will improve without FDIC insurance? We should be safeguarding our banks, not dismantling them," Warren stated.

While Warren supports lower interest rates, she urges caution due to economic uncertainties created by the Trump administration's policies.

"The Fed should reduce rates to help families afford mortgages and pay off debt," Warren said. "But we must also address the economic chaos caused by Musk and Trump."