The federal watchdog Elizabeth Warren dreamed up to police banks is now being used by President Donald Trump’s administration to advance one of his core priorities, cracking down on illegal immigration.
The Consumer Financial Protection Bureau, created after the 2008 financial crisis and long treated by Democrats as a crown jewel of the Obama era, has issued guidance reminding lenders to weigh whether a borrower’s immigration status could affect the person’s ability to repay certain loans.
That includes mortgages and some open-end credit products.
The bureau said creditors must “assess consumers’ ability to repay before offering mortgages and certain open-end credit products,” specifically noting that they should consider “consumers’ immigration status, especially where removal from the United States may disrupt the consumer’s income.”
In plain English, the Trump administration is telling lenders that if someone could lose work authorization or be removed from the country, that risk matters when deciding whether the person can repay a loan.
That is a sharp turn for an agency Democrats spent years using to push aggressive fair-lending enforcement and progressive financial regulation.
Trump entered his second term with Elon Musk’s Department of Government Efficiency taking aim at the CFPB altogether.
Musk called to “Delete CFPB,” adding, “There are too many duplicative regulatory agencies.”
But after the administration failed to fully eliminate the bureau, it took a different route.
It stripped the agency down and began using what remained to push Trump’s own agenda.
Acting CFPB Director Russell Vought has moved the bureau away from the Biden-era posture that treated lenders as targets and toward a narrower mission focused on statutory limits, immigration-related credit risk and what he has called “woke” financial practices.
A spokeswoman for Vought defended the shift as a long-overdue correction.
The administration is “bringing the agency back to operating within statute and away from breaking the law, and making cases right to help small businesses and Americans who were victims of this thuggery.”
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For conservatives, the irony is hard to miss.
Warren helped build the CFPB as a permanent progressive power center.
Trump is now using that same machine to remind banks that immigration status is not some irrelevant box on a form when it can affect income, employment and repayment.
The CFPB began operations in 2011 after Democrats argued the financial crisis proved Washington needed a single agency dedicated to protecting consumers from predatory mortgages, credit cards and other financial products.
Warren, then a Harvard law professor, worked closely with the Obama administration and congressional Democrats to shape the bureau’s founding legislation and defend it publicly.
Obama wanted Warren to lead the agency, but Republicans and moderate Democrats were expected to block her confirmation.
Instead, he made her assistant to the president and special adviser to the Treasury secretary, allowing her to help build the CFPB without going through a Senate confirmation fight.
Before the bureau launched, Warren helped recruit its first staff, build its consumer complaint system and set its early enforcement priorities.
She later stepped aside after Obama nominated Richard Cordray as the bureau’s first Senate-confirmed director, then used the momentum to launch her successful Senate run in Massachusetts.
Now Elizabeth Warren is watching Trump bend her prized agency in a very different direction.
As the top Democrat on the Senate Banking, Housing and Urban Affairs Committee, Warren accused the administration in May of weakening post-crisis safeguards by allowing 26 of the 31 largest national banks to avoid certain protective regulatory requirements.
“This proposed rule weakening governance and risk management standards comes against the background of a broader, big bank deregulation” Warren warned, adding that “This toxic mix of big bank deregulation is occurring at a precipitous moment–and the American public will likely pay the price in future economic downturns.”
Democrats see the CFPB’s new posture as deregulation dressed up as reform.
Trump’s team sees it as ripping the agency away from the progressive lawyers and activists who used it to bully banks, expand bureaucracy and punish politically disfavored industries.
The immigration guidance is a clear example.
Under Joe Biden, federal officials warned lenders against using immigration status in ways that could be discriminatory.
Under Trump, the message is different: lenders cannot pretend deportation risk, work authorization problems or unstable income do not matter when a loan may never be repaid.
That does not erase existing fair-lending laws.
But it does put financial institutions on notice that giving credit to people who may not be legally authorized to work in the U.S. can carry real risk.
For Warren, the agency she helped create was supposed to be a liberal fortress.
Donald Trump just turned it into a tool for America First lending policy.
The left built the CFPB to control the banks.
Now the Trump administration is using it to protect the financial system from the consequences of open-border politics.
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[ H/T Trending Politics ]
