U.S. Senator Elizabeth Warren (D-MA) has raised concerns about the actions of Acting Director of the Consumer Financial Protection Bureau (CFPB), Russell Vought, which she believes contradict President Donald Trump's initiative to make credit cards more affordable, as stated in a letter exclusively obtained by CNBC.
In her letter to Vought, Warren criticized the CFPB for dropping a rule that limited credit card late fees, aligning with lenders in cases of deceptive practices, and pausing enforcement measures against the credit industry. These actions seem to contradict Trump's recent social media appeal for U.S. banks to voluntarily cap credit card interest rates at 10% for a year.
Despite the lack of compliance from banks, Trump called for legislative action on the credit card interest issue. Warren mentioned her recent conversation with Trump, stating, "I spoke with President Trump last week and told him that Congress could pass legislation to cap credit card rates, if he would fight for it."
Warren's letter highlighted how Vought's leadership at the CFPB has made it easier for financial institutions to exploit consumers, opposing the President's stated affordability goals. This has escalated tensions over the agency, which Warren helped create during the Obama administration, and which some Trump administration officials have sought to dismantle as part of a pro-business deregulatory agenda.
Current and former CFPB employees have expressed concerns that the agency is being weakened under Vought, who has attempted to implement mass layoffs and reduce its funding.
An agency spokesperson noted that the Dodd-Frank Act does not allow the CFPB to limit credit card rates, but Warren urged Vought to use the agency’s authority to tackle excessive credit card costs and regulate bad industry practices. She insisted that Vought should "immediately reinstate its rule capping credit card late fees at $8, which would save Americans more than $10 billion annually."
Warren also called for stricter controls on deceptive practices related to deferred interest promotions, resuming enforcement on monitoring interest rate increases, addressing consumer complaints, and stopping rewards program bait-and-switch tactics.
In concluding her letter, Warren challenged the current stance by stating, "Either President Trump is not serious about making credit cards more affordable or you are insubordinately disregarding his direction."