Opening CFPB databases to Elon Musk is ‘deeply anticompetitive’
The accessing of Consumer Financial Protection Bureau databases by Elon Musk’s DOGE associates last month represents an existential threat to private-sector competition, the agency’s former general counsel and a pair of House Democrats warned Wednesday.
On Feb. 7, DOGE aides set up shop at CFPB headquarters and reportedly accessed sensitive financial and personnel information housed in agency systems. Later that day, Musk posted “CFPB RIP” on his X account.
Seth Frotman, the CFPB’s top legal official during the Biden administration and a senior advisor to former Director Rohit Chopra, told lawmakers on the House Financial Services Subcommittee on Financial Institutions that providing that access to DOGE goes beyond just exposing the personal information of Americans.
“I think [Musk is] not only getting information about consumers, he’s getting information about his competitors,” Frotman said. “Part of the job of the CFPB, as tasked by Congress, is to make sure we understand markets and where there’s risk, and there’s a ton of risk when it comes to nonbank payments.”
Musk has long set his sights on making the social media site formerly known as Twitter into an “everything app.” Launching X Money would put the platform in direct competition with Venmo, CashApp and other nonbank payment services.
Those platforms, Frotman noted in response to questioning from Rep. Sean Casten, D-Ill., have never been given the “god-tier” data privileges to the CFPB system that a former agency chief technologist told Recorded Future were granted to Musk’s DOGE team.
“Then let’s assume that he has all that data,” Casten said. “It sounds to me like we have a nonbank that is going to compete the hell out of all of the banks and all the systems that we have right now in a way that is deeply anticompetitive. Please tell me I’m wrong.”
“You are 100% correct,” Frotman replied.
Rep. Brad Sherman, D-Calif., called Musk’s work with DOGE and his payments ambitions “a major conflict of interest.” He also noted that X Money wouldn’t be overseen by federal banking regulators like witnesses representing credit unions and traditional banks are, nor would it truly be monitored by the CFPB under a Trump administration that has halted much of the agency’s work.
“Is anybody at the CFPB doing any consumer protection today?” Sherman asked Frotman.
“Well, they’re certainly not overseeing the nonbank payment system in this country, which is the direct ambitions of Elon Musk and most of Silicon Valley,” he answered.
Casten called Musk’s CFPB download “tremendously concerning” for consumers and competition, and ended his allotted time Wednesday by pleading with his Republican subcommittee colleagues to take their oversight responsibilities seriously.
“We gonna defend capitalism around here? We gonna defend competition?” Casten asked. “Or we gonna put in a ball gag and climb down in the dungeon and just do whatever Trump tells us to do?”
