The Entire History of the CFPB in 50 Minutes
Happy Wednesday, Fintech Listeners!
Well, the big news bouncing around my house right now is that Taylor Swift is going to be releasing a new album — The Life of a Showgirl, likely sometime in October. My wife and my younger son are particularly excited.
I have several quick thoughts on this news:
- That woman’s productivity is off the charts. I have no idea how she already has another new album ready to go. I’m still working on digesting Tortured Poet’s Department.
- She’s also an exceptional marketer. I haven’t seen someone market their products to their fans with this much skill since Steve Jobs. It’s tough for me to convey to you just how excited true Swifties are about this news.
- To that point, tonight’s New Heights podcast — which Swift is a guest on — is going to get a few more listeners than average, I’m guessing. My wife, who had not heard of the Kelce brothers before Swift entered into the picture, will be among them!
However, if a football podcast about pop music doesn’t sound appealing to you, I have a few alternative recommendations, starting with the newest Fintech Takes podcast.
— Alex
3 BIG IDEAS FROM THE PODCAST
Today’s episode is a bit different. Think of it as the audiobook equivalent of a Fintech Takes essay. (Because it is.)
From time to time, I hear from readers who enjoy my long-form pieces but don’t always have time to sit down and read them (especially not on a phone or in between meetings).
So here’s the experiment: I’ve taken one of my longer, more research-heavy essays — “Why Is This Happening? An Exhaustive Review of the History and Nascent Culture of the CFPB” — and recorded it, start to finish.
If you haven’t read it, or haven’t revisited it since it ran in June, you’ll hear the whole enchilada.
And because a lot has been happening at the bureau over the last two months, I’ve added fresh updates on what the CFPB’s been up to, and what those actions tell us about its future.
Tune in for the full conversation here
And read below for my three big ideas...
#1: Will the CFPB Ever Establish Institutional Trust?Copy anchor linkCopied
Most federal financial services regulators are really old. The OCC dates back to the Civil War, the Fed to 1913, and the FDIC to the Great Depression.
These institutions have been around long enough to establish cultures that persist across different political climates. The result is stability, predictability, and an apolitical nature that industry leaders (mostly) value as a feature, not a bug.
Executives don’t necessarily need a regulator to agree with them, but they do need to know, within a reasonable margin of error, that the rules today will be the rules tomorrow … and five years from now.
That trust is why the Supreme Court took the unusual and legally questionable step of telling President Trump not to fuck with Jerome Powell and why a pragmatic appointee like Jonathan Gould has garnered bipartisan support.
In other words, the Fed, the FDIC, and the OCC have something the CFPB has never really had the time to build: institutional trust.
(And, I believe, a lack of institutional trust – which is, broadly, an epidemic in our society today – is why Jonathan McKernan ultimately backed away from the chance to run the CFPB).
Without the perception of being apolitical and durable (which it hasn’t had decades to build), the CFPB has been far easier to dismantle than its older peers would be.
And if your regulator can be gutted in a single election cycle, your entire compliance and product strategy becomes a political hostage — and your cost of doing business goes up.
For financial services companies, policy predictability is (almost) as valuable as favorable rules.
So, can you rebuild institutional trust in an agency designed by Elizabeth Warren (a lightning rod for political criticism)? Or does the CFPB’s short and dramatic history lock it into permanent “swing state” status in our current, highly polarized regulatory map?
#2: Open Banking = A Mirror for How the CFPB Now OperatesCopy anchor linkCopied
Open banking (letting consumers safely share their financial data with other providers) should be a long-term infrastructure project.
Instead, it’s been months of whiplash that goes something like this:
- October 2024: CFPB finalizes the open banking rule. Then the Bank Policy Institute sues to kill it.
- June 2025: The CFPB agrees with BPI and asks the court to kill the rule.
- July 2025: JPMorgan Chase’s steep API pricing shocks the market, and the CFPB reverses course, asking the court to pause the lawsuit so that it can revise the rule instead of scrapping it.
In less than a year, the Bureau went from finalizing its open banking rule … to siding with big banks who sued to stop it … to reversing course after JPMC announced steep new fees for data access.
That flip-flop tells you a lot.
It signals that even a deregulatory CFPB will step in if one player tilts the market too far.
But it also shows that “independence” now means reacting to political optics and market noise.
For developers, it means that the costs of building on top of open banking infrastructure can swing suddenly and dramatically.
And it’s a reminder that even rules meant to empower consumers can get caught in power struggles between regulators and the companies they regulate.
#3: Losing the Tech Industry Was the Fatal Swing VoteCopy anchor linkCopied
From the outset, the CFPB’s founders wanted to create an agency that was seen as credible by all market participants.
The CFPB was created by Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act in July 2010. It was the brainchild of Elizabeth Warren, who was, at that time, a law professor at Harvard.
As the financial markets were melting down in 2007, Professor Warren was pitching her idea for a new federal agency focused on making consumer financial products safer.
The goal was to be a positive and powerful force for new competition and a credible, independent agency that couldn’t just do whatever it wanted (or be seen as “Elizabeth Warren’s personal agency”).
Now, because it was focused on consumer protection, consumer advocacy groups were (for the most part) always going to be fans of the CFPB. And because it was focused on encouraging competition, banks (which are the incumbents in the market) were (for the most part) always going to be detractors of the CFPB.
The real test of legitimacy was the tech industry, especially the fintech and VC ecosystem, which plausibly could have seen the CFPB as its natural ally in promoting fair competition.
What the last year or so has demonstrated (to me) is that the CFPB failed that test. It lost that swing vote.
Today, leading voices in tech, such as Marc Andreessen, publicly frame the CFPB as a market blocker, one that “terrorizes financial institutions, prevents new competition, new startups that want to compete with the big banks … by terrorizing anybody who tries to do anything new in financial services.”
Fair or not, once that narrative took hold, the CFPB became strategically isolated, making the current dismantling both easier and more inevitable.
In an era where tech and finance are converging, losing credibility with the innovation side of the market is fatal for a regulatory agency focused on competition and consumer protection.
🎬 DIRECTOR'S COMMENTARY
I really, really want feedback from y’all on this episode!
Was it weird listening to me read one of my essays out loud? Or was it useful to be able to listen to an essay that was way too long to sit down and read?
Do you have any suggestions on the format or ideas to improve it? Would you like to see more “audiobooks” of Fintech Takes content?
Hit reply to this email and let me know!
WHAT I'M LISTENING TO
#1: Yield Bearing Stablecoins Surge in a Post-GENIUS World (Tokenized) 🎧Copy anchor linkCopied
This podcast episode hits on a bunch of different topics that I am interested in, including the emergence of more yield-bearing stablecoins in a post-GENIUS Act world.
Worth a listen.
#2: Will AI Usher In the End of Deep Thinking? (Plain English) 🎧Copy anchor linkCopied
I’m quickly becoming less concerned with the question, “How do I use AI in my job and my everyday life?” and more concerned with the question, “How much should I use AI in my job and my everyday life?”
This podcast pokes at the motivations behind this second question.
WHERE I'LL BE
⛰️ The Fintech Takes: Builders Summit | Nov 12-13 | Bozeman, MTCopy anchor linkCopied
For the relentless, mission-driven, and pragmatic builders in fintech, we’re creating a space for deep, focused conversations that just might lay the groundwork for your next big swing.
📍Apply to snag one of our 60 spots here to join us!
And here are a few other places I’ll be over the coming months:
✈️ Symposium on Agentic AI & Consumer Payments | 9/8 - 9/9 | Washington D.C.Copy anchor linkCopied
Put on by my friends at the Consumer Bankers Association. I look forward to learning more about a topic that fascinates me.
✈️ FinovateFall | 9/8 - 9/10 | New York CityCopy anchor linkCopied
I’ll be giving a 7-minute presentation on a trend in financial services that banks and fintech companies should be thinking about. I’ve done this specific session before, and it’s more difficult than it sounds. Looking forward to the challenge!
✈️ Cash Flow Underwriting Summit | 9/10 | New York CityCopy anchor linkCopied
I’ll be doing A LOT at this event, which is fortunate as I am OBSESSED with cash flow underwriting, as you have probably noticed!
✈️ Money Experience Summit | 9/15 - 9/17 | Salt Lake CityCopy anchor linkCopied
One of my favorites. I never miss it. My panel this year should be a lot of fun!
✈️ Salt Flats Summit | 9/17 - 9/18 | Salt Lake CityCopy anchor linkCopied
Truly one of the most unique events I’ve ever attended. Looking forward to year 2!
✈️ AI-Native Banking & Fintech Conference | 9/30 | Salt Lake CityCopy anchor linkCopied
Year 2 for this one as well. The first one was a lot of fun (plus, I’m digging all these conferences in my backyard … Silicon Slopes for the win!)
Thanks for the read! Let me know what you thought by replying back to this email (including but not limited to thoughts and feedback on this new format; I’m all ears!).
— Alex
