U.S. Senator Elizabeth Warren (D-MA) has accused the acting director of the Consumer Financial Protection Bureau (CFPB), Russell Vought, of counteracting President Donald Trump’s initiatives aimed at making credit cards more affordable. In a letter exclusively obtained by CNBC, Warren criticized the CFPB’s recent decisions under Vought’s leadership.
According to Warren, the CFPB has repealed a rule limiting credit card late fees, sided with lenders in deceptive practice lawsuits, and paused enforcement actions against the credit card industry. Her letter highlighted Trump's social media post urging U.S. banks to cap credit card interest rates at 10% for a year. After banks failed to comply voluntarily, Trump suggested that legislative action might be necessary.
“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 wrote to Vought. “While Congress considers legislation, your actions are directly undermining the President’s goals,” she asserted, claiming that under Vought’s leadership, the CFPB is facilitating big banks and credit card companies in exploiting consumers.
Warren’s letter comes amid increasing tensions over the CFPB, an agency she helped establish during the Obama administration. Several Trump administration members have advocated for disbanding the CFPB as part of a pro-business, deregulatory agenda. Current and former CFPB employees have indicated that the agency is struggling under Vought’s direction, who allegedly sought court approvals for mass layoffs and halting agency funding.
A CFPB spokesperson stated that the Dodd-Frank Act prohibits the agency from setting credit card rate limits. In her letter, Warren urged Vought to use the CFPB’s full authority to tackle excessive credit card costs and penalize offending entities, rather than disarm the agency. She called for the immediate reinstatement of a rule capping credit card late fees at $8, potentially saving Americans over $10 billion annually.
Warren also suggested several other enforcement actions: curbing deceptive practices with deferred interest promotions, monitoring interest rate hikes, addressing consumer complaints, and ending bait-and-switch tactics with rewards programs. She concluded with a pointed remark: “Either President Trump is not serious about making credit cards more affordable, or you are insubordinately disregarding his direction.”