Krugman Suggests Reviving CFPB To Strengthen Trump’s Affordability Efforts

Paul Krugman is arguing that if Donald Trump is serious about making life more affordable, the most practical and powerful step would be to restore a functioning Consumer Financial Protection Bureau (CFPB), rather than rely on ad‑hoc price caps like Trump’s proposed cap on credit card interest rates.​

What Krugman is saying

• Krugman notes that Trump has proposed a 10% one‑year cap on credit card interest rates as part of a broader “affordability” push, covering things like mortgage rates, credit cards, and energy costs.​

• He argues that this kind of price control is legally shaky and unlikely to work as advertised, especially given Trump’s past efforts to weaken the very agencies that police abusive lending.​

Why the CFPB matters

• The CFPB, created after the financial crisis, is a federal watchdog designed to curb predatory practices in consumer finance (credit cards, mortgages, payday loans, etc.).​

• Krugman points out that before Trump’s second term, the CFPB had forced abusive firms to pay substantial refunds to consumers, and that dismantling it has reduced protections at exactly the moment households are struggling with high borrowing costs.​

Trump’s actions toward the CFPB

• Krugman highlights that Trump’s team moved early to effectively shut the CFPB down, with officials telling staff in 2025 that the bureau was “closed” despite courts ruling a president cannot simply abolish it.​

• More broadly, Republican policymakers and the administration have pushed to curb the CFPB’s reach, funding, and rulemaking, aiming to scale back Obama‑ and Biden‑era consumer protections.​

How reviving CFPB would support affordability

• Krugman’s core claim is that restoring CFPB funding and letting it resume aggressive enforcement is a “low‑effort” step that would immediately help Americans with credit card debt and other financial pressures, without needing new legislation.​

• He says that if Trump truly wants to tackle high card rates and other abuses, reviving the CFPB and then working with Congress on targeted legislation (like a properly designed cap) would do far more than one‑off announcements from the White House.​

How others view Trump’s affordability push

• Some economists and banks warn that a blunt 10% cap could backfire by cutting off credit to riskier borrowers and slowing consumer spending and GDP growth.​

• Krugman, while not dismissing caps entirely, stresses that structural consumer protection via a strong CFPB is a more realistic, durable way to support affordability than unilateral price edicts that are hard to enforce and easy to evade.​