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Democrat senators question what Elon Musk plans to do with CFPB data

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Sens. Elizabeth Warren, D-Mass., center, Amy Klobuchar, D-Minn., and Senate Minority Leader Charles Schumer, D-N.Y., conduct a news conference after the Senate Policy luncheons in the Capitol, March 14, 2017.

Tom Williams | CQ Roll Call | Getty Images

Democrat lawmakers led by Massachusetts Sen. Elizabeth Warren on Tuesday held a forum pushing back against the moves that the Trump administration and Elon Musk have taken to neutralize the Consumer Financial Protection Bureau.

Guests at the event included a retired military veteran helped by the agency, a mortgage broker who said the CFPB has helped curb industry abuses, and the bureau’s former head for supervision.

But the focus of the senators’ attention was Elon Musk, the driving force behind the so-called Department of Government Efficiency. While Musk was invited to the Washington, D.C, event, according to Warren, he didn’t make an appearance.

The lawmakers questioned whether Musk was conflicted in his efforts to dismantle the CFPB, highlighting his recent plan to launch a digital payments service within X, the social media network he owns.

“By seizing control of the agency, Musk can now root through all of the CFPB’s confidential data that DOGE has accessed on these potential competitors,” Warren said. “As Musk launches his new app, he faces oversight from the CFPB. His plan seems to be to eliminate the watchdog.”

A representative for Musk and X didn’t immediately respond to request for comment.

Earlier this month, operatives from DOGE gained access to CFPB systems, shortly before the bureau’s new leadership shuttered the agency’s headquarters, froze nearly all activities and laid off roughly 200 employees. A CFPB union has alleged in a lawsuit that acting CFPB Director Russell Vought intends to fire more than 95% of the agency’s staff.

“Elon, how do you justify shutting down the agency that’s going to be looking at your peer-to-peer payment plan?” Sen. Amy Klobuchar, D.-Minn., asked rhetorically during the hearing Tuesday. “How do you justify shutting down the agency that has jurisdiction and oversight over many of the other financial issues that you are going to make money from doing?”

‘Secret sauce’

Responding to a question from Sen. Chris Van Hollen, D.-Md., about what Musk could do with CFPB data, Lorelei Salas, the former CFPB supervision director, said the regulator kept “very sensitive trade secret information,” including from payments services PayPal, CashApp and Zelle, as well as online lenders.

“We’ve been looking at a number of digital wallet companies, payments companies, and we have information… on the technologies that they’re using,” Salas said. “We have information on the secret sauce of the credit models that people used with artificial intelligence to make decisions about whether you get a loan or not.”

Late last year, the CFPB took steps to supervise tech giants and payments firms that dominate the market, including Apple and PayPal, and sued the operator of the Zelle payments network and the three biggest U.S. banks using it for allegedly failing to properly investigate fraud complaints.

Besides confidential data on companies examined by the CFPB, the agency has “very sensitive data” from consumers filing complaints, Salas added. Consumers often leave account numbers and other personal data in their complaints, agency sources have said.

Now, with the CFPB and its employees in a state of limbo, the question is how far Musk and Vought can take their campaign to minimize the watchdog. A federal judge has halted their efforts, saying that they cannot fire employees or purge bureau data for the time being.

“The CFPB has been sidelined, but it is not dead,” Warren said, asserting that only Congress can shut down the bureau. “Advocates are in court right now asking judges to enforce the law, and I am confident they are going to win.”

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How buy now, payer later apps could be crushing your credit

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Small, everyday purchases like a meal from DoorDash are now able to be financed through eat now, pay later options — a practice that some experts deem “predatory.”

“You’ve got to have enough sense to not follow the urge to finance a taco, okay? You have got to be an adult,” career coach Ken Coleman told “The Big Money Show,” Wednesday. 

“This is predatory, and it’s going to get a lot of people in deep trouble.”

RISKS OF BUY NOW, PAY LATER: ‘TICKET TO OVERSPENDING,’ EXPERT SAYS

klarna, doordash

DoorDash and Klarna are now partnering up to extend buy now, pay later options to consumers. (Reuters, Getty / Getty Images)

Financial wellness experts are continuously sounding the alarm to cash-strapped consumers, warning them of the devastating impact this financial strategy could have on their credit score as some lenders will begin reporting those loans to credit agencies.

Consumers may risk getting hit with late fees and interest rates, similar to credit cards. 

“So your sandwich might show up on your FICO score, especially if you pay for it late,” FOX Business’ Jackie DeAngelis explained.

EXPERTS WARN HIDDEN RISKS OF BUY NOW, PAY LATER

Major players like Affirm, Afterpay, and Klarna have risen to prominence at a time when Americans continue to grapple with persisting inflation, high interest rates and student loan payments, which resumed in October 2023 after a pause due to the COVID-19 pandemic. 

“The Big Money Show” co-host Taylor Riggs offered a different perspective, suggesting that company CEOs have a “duty” to attract as many customers as they want. 

“Unfortunately for me, this always comes down to financial literacy — which I know is so much in your heart about training people to save now by later,” she told Coleman, who regularly offers financial advice to callers on “The Ramsey Show.”

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Coleman continued to come to the defense of financially “desperate” consumers, arguing that companies are targeting “immature” customers. 

“I’m for American businesses being able to do whatever they want to do under the law. That’s fine. But let’s still call it what it is: it’s predatory, and they know who their customers are,” Coleman concluded, “And I’m telling you, they’re talking about weak-minded, immature, desperate people.”

FOX Business’ Daniella Genovese contributed to this report.

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