Photo illustration: Maura Losch/Axios. Photo: Justin Lane via Pool/Getty Images
The Consumer Financial Protection Bureau is in the Trump administration's crosshairs and work around AI and personal finance has come to a halt.
The big picture: The Trump administration fired CFPB director Rohit Chopra, ordered the agency to stop its work, and shut down its headquarters.
- A union has filed lawsuits to block the shutdown and to stop the Department of Government Efficiency from accessing employee data.
Why it matters: Chopra had sought to tackle the potential risks involved with using Big Tech for banking, rather than insured banks or credit unions, due to the way that tech companies collect and store data.
- Chopra had also prioritized bringing in technologists to the agency to look at how AI could lead to discrimination in lending decisions or how effective chatbots are for customer support.
- That work is now halted, meaning American consumers are interacting with AI for financial decisions without real checks.
Threat level: Without CFPB, tech companies using AI for loan decisions or for facilitating digital payments could engage in a "race to the bottom," with products that lack protections for consumers, one former high-level CFPB staffer told Axios.
- That dearth of supervision also creates a disadvantage for smaller companies that are following the law and trying to compete with bigger players, the former staffer said.
The intrigue: While all of CFPB's operations are under threat, there is a desire in the Trump administration to go after Big Tech.
- Google and Apple were the main targets of CFPB's probes, as the agency tried to bring the companies' payment products under their supervision.
- Trade groups representing Apple and Google sued CFPB to block that rule.
Elon Musk's X is seeking to get into the digital payment space through a partnership with Visa, something that falls under the CFPB's purview.
- DOGE now has access to information on rival payment apps, per CNN; Tesla's financing division for car loans also falls under the CFPB.
