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This is Lee Fang. I'm your host of System Update, coming to you from San Francisco. Glenn's out this week, so I'm filling in.
Donald Trump sailed into office, in part, by harnessing anger against censorship on private platforms. Political correctness, allegations of misinformation and hate speech, and other forms of political pressure have led to private platforms – such as social media networks and even banks – kicking users off, effectively silencing them from the public debate. But we're two months into the new administration. Do we have new protections for free speech rights and who is setting the agenda for the movement?
For today's episode, I want to talk about the tension between political free speech rights and corporate speech rights.
The best place to begin is just after the election. In a widely watched interview on Joe Rogan, last November, billionaire investor Mark Andreessen took on the mantle of the First Amendment and claimed that the Biden administration had “debanked in the past four years” many of his tech startup friends. “Tech founders had lost bank access,” he said, in the same way that the government had squeezed sex workers and drug dealers out of the system. “This was a form of censorship,” Andreessen said, and that explained his support for Donald Trump. Andreessen named the Consumer Financial Protection Bureau as the chief culprit for this pernicious form of silencing the political opposition.
Video. Marc Andreessen, Joe Rogan Experience. November 26, 2024.
The cause was almost immediately embraced by President Donald Trump, whose supporters have been similarly silenced and kicked off social media platforms for years. Trump mentioned the issue repeatedly after the election and at the World Economic Forum in Davos. Let's watch a clip.
Video. Donald Trump, World Economic Forum. January 23, 2025.
And who could blame him? Trump was himself removed from multiple social media platforms following the January 6 Capitol Riot, and his campaign faced government-influenced censorship during the 2020 election over misinformation allegations from a variety of partisan sources. So, from the conservative MAGA perspective, allegations around debanking certainly struck a nerve. It is seen as yet another government violation of our cherished speech rights – and the fight against debanking quickly became a rallying cry to root out Beltway malfeasance.
But what is actually happening in the name of free speech? In short order, allies of the president have taken to a radical dismantling of financial watchdogs such as the CFPB. But a close look at the details of the policy upheaval over the last two months reveals an upside down series of events. We're not getting new protections for bank customers or users of social media concerned with censorship. The new administration has in fact made it easier for financial platforms to kick off users for political expression, including a push to repeal CFPB rules that were designed to protect free speech. The most immediate impact, though, is a coup for Andreessen's portfolio, with any hope of crypto regulations having evaporated almost overnight. Corporate interests, meanwhile, are citing the First Amendment to roll back regulations designed to protect the environment and everyday consumers.
You may have missed it, just as the casual observer loses sight of the magician's card tucked underneath his sleeve. Andreesen is the latest to pull off a masterful sleight of hand in the free speech wars. His argument was little more than an elaborate hat trick designed to convince those enraged about censorship to join a niche campaign to unwind protections against fraud, specifically in the crypto industry, of which he is one of the biggest investors in Silicon Valley.
According to reports, Andreessen Horowitz, his VC firm, has raised nearly $7.6 billion for its portfolio of blockchain and crypto related startups.
The firm raised a $4.5 billion crypto fund in 2022, bringing its total amount raised for crypto and blockchain investments to $7.6 billion.
Andreessen conflated two unrelated issues for his own financial benefit. In a worrying global trend, a wide array of people – from Canadian truckers protesting the vaccine mandate, to Brexit supporters and Palestinian activists – have all been removed from financial platforms without due process in an attempt to silence them.
Video. Bloomberg. February 17, 2022.
Unrelatedly, regulators concerned with keeping crypto startups in compliance with banking rules have taken steps to crack down. Some executives involved in the crypto trade have said that they have had difficulty opening traditional bank accounts simply because they were flagged by the system. The former is debanking; the latter is not.
Consider the viewpoint of regulators. In just the last few years, crypto brokerages and emerging cryptocurrencies have imploded overnight and left ordinary customers with nothing. Regulators have also repeatedly cited crypto startups – including those backed by Andreessen – for a variety of alleged financial crimes, from undermining rules on money laundering and defrauding customers. Take, for example, Wise, formerly known as TransferWise, which is now publicly traded but was previously backed by Andreessen Horowitz, which funded it at a $58 million round. Wise was allegedly facilitating transfers to organizations with links to terrorist organizations.
It's not entirely surprising that those entrusted with safeguarding the financial system view these schemes with extreme suspicion.
One could argue, possibly with merit, that the regulators at times took steps too far in pressuring ordinary banks from taking on crypto clients. But even if the regulators were entirely wrong to remove and move aggressively against crypto and attempt to firewall the industry from traditional banks, these were actions taken to police business decisions – not the expression of political or religious views. This is a critical distinction with the type of debanking we've seen as a backdoor for controlling speech.
Andreessen’s actions are hardly unique. As free speech has become a battleground for everyday Americans – waged on college campuses, over political correctness in the workplace, and on social media platforms – a simultaneous legal revolution has taken shape. Corporate actors seeking to eviscerate rules and restrictions on business conduct have attempted to conflate commercial action with free expression. In other words, the business elite is skillfully wielding the entire free speech debate into a sword for its own selfish purposes.
For much of the last few decades, lawyers have poked and prodded, attempting to find new legal maneuver for classifying business behavior as protected speech.
Corporations are weaponizing the First Amendment to argue that they do not have to comply with regulations they oppose. At issue here is the compelled-speech principle in the First Amendment, which states that the government cannot force people to say something they disagree with. In other words, virtually any regulation, they claim, is government compelled speech and a violation of free speech rights.
Look at the airline industry. Southwest and Spirit Airlines have repeatedly litigated to vacate a regulation that requires airlines to display the full price of tickets, including hidden fees, and they claim this is an abrogation of airline free speech rights.
Similarly, private rating agencies responsible for falsely certifying toxic mortgage-backed securities in the lead up to the 2008 financial crisis. They similarly went to court, arguing that they were simply expressing their First Amendment protected speech and thus were exempt from fraud lawsuits.
Now, these efforts have largely failed in court, but other similar arguments have increasingly prevailed.
In the Supreme Court ruling Sorrell v. IMS Health Inc., Justice Anthony Kennedy struck down laws against health firms mining and selling patient data to pharmaceutical companies. The patient data laws, Kennedy wrote, were a violation of commercial speech laws and “burdened a form of protected expression.” Kennedy similarly knocked down public employee union dues, citing the First Amendment, as a form of coerced financial speech.
And most famously, Kennedy wrote the majority opinion in Citizens United, the 2010 decision that allowed unlimited corporate and independent spending in elections. The court ruling ushered in our current era of billions of dollars of SuperPAC and dark money spending, all under the rubric of expanding the First Amendment. The decade of campaign finance laws unraveled, the century of campaign finance laws unraveled by the decision, Kennedy wrote, had unduly restricted “corporate political speech.”
The flood of challenges to corporate regulations and ethics laws and consumer safety rules under the banner of free speech continues at a swift pace.
Corporate attorneys are threatening to overturn the few existing laws restricting robo-calls and automated texts using the First Amendment.
Interest groups funded by Google and Facebook have claimed that antitrust enforcement would increase censorship and stifle free speech.
And state bans on lobbyists giving gifts to legislators are continually under threat, as lawyers for special interests have argued that it is merely a form of free expression for influence peddlers and lobbyists to lavish politicians with luxury gifts like wine or luxury cars.
Sixth Circuit Upholds Kentucky Campaign Contribution and Gift Restrictions
Kentucky state legislators and their spouses may not accept gifts from state lobbyists and lobbyist principal. Lobbyists and lobbyist principals also may not provide gifts to state legislators, legislative candidates, and their families.
(Wiley. April 4, 2022.)
The clash may threaten some of the most consumer-friendly reforms promised by even this new administration. Processed food industry lobbyists have threatened to use the First Amendment and litigation to strike down the FDA's new updated guidelines on what foods can be labeled as healthy – a priority championed by recently appointed Secretary Robert F. Kennedy, Jr. Efforts to minimize pharmaceutical advertisements on television, another promise by President Trump, will also face a related court challenge over corporate free speech rights.
None of these matters, however, relate to the most pressing issue that constitutes a free and open society. How do we petition our government for redress? How do we openly debate controversial rules? How do we guarantee religious freedom? Banks are still free to arbitrarily remove customers, college students continue to face coercion over free speech rights, and social media platforms still have virtually no limitations on censoring users over political expression.
While corporations have harnessed an expansive view of the First Amendment to rapidly expand power, ordinary Americans are increasingly left on the sidelines, just as vulnerable to government and corporate censorship.
The Interview: Rohit Chopra
Our guest today is Rohit Chopra. He's a career consumer advocate. Earlier in his career, he helped prosecute the predatory for-profit college industry. He was later a commissioner on the Federal Trade Commission, where he supported investigations of the Big Tech companies. And over the last four years, he served as the director of the CFPB, where he returned billions of dollars back to consumers by cracking down on abuses from banks, fintech companies and other financial institutions.
Lee Fang: Rohit, thank you so much for joining us today.
Rohit Chopra: Thanks for having me.
Lee Fang: Well, I invited you to speak about free speech and these issues around debanking at the CFPB and we'll get to that in a second. But first, I was very interested in the talk you gave last year at the Federalist Society, where you talked a little bit about the disappearing distinction between government and private power. The question of who actually governs us.
Can you talk about this tangled web of private and public regulations and how America's financial systems, in some ways, are heading in the direction of China's society, where just a few super powerful apps control our everyday commerce, that act as surveillance and our conduct. Please, can you just talk a little bit about that?
Rohit Chopra: Well, one of the things that I always like to challenge everyone on is what are the threats to us living our life really to the fullest? And oftentimes you hear about political discourse about threats by government and, of course, we should check abuses and make sure our government is accountable. But more and more the rules that govern our lives are actually dictated by a small set of firms that dominate a particular industry, we're so now numb to agreeing to the terms and conditions and small font. When we click through on our phone or when we are dealing with our utility bill or telecom bill, so much of it is dictated for us. And I think that raises some questions about what is the way in which we create a free society. It's not just making sure government is accountable to people, it's also making sure that big private monopolies are also held to account.
Lee Fang: You know, this administration harnessed very justified anger around censorship, you know, for a lot of conservative supporters for supporters of the president. They saw the campus free speech wars, they saw, you know, their own supporters, their own president kicked off social media platforms, they saw this coercion around speech around the pandemic and they have been, there's been justified anger around this crisis around debanking. We have seen it particularly in other Anglo countries, you know, the Canadian truckers who are protesting the COVID mandate, who were being removed from their bank accounts, you saw supporters of Brexit, who could elect, who lost access to bank accounts as well. And this, these concerns are creeping into our system. But, you know, with the Twitter files, we got a little bit of a look under the hood of where these decisions are coming from. But I think for everyday Americans, they have no idea. This is a black box. Are these private decisions? Are these government decisions? In many cases, this is the public square. Can you engage on social media? Can you engage in the banking system? Can you talk a little bit about what you were proposing at the CFPB to help protect against debanking, whether you're on the left or on the right.
Rohit Chopra: Well, you know, when I was an FTC commissioner, one of the things that really struck me was how much Big Tech platforms were looking to enjoy all the liability shields under the law, while also controlling the flow of information. Usually, it was because they wanted to monetize user behavior and we've seen this. There was a big shift when all of a sudden Facebook changed from a timeline into an algorithmically curated news feed and it became more and more about monetizing behavior, driven by their business incentives.
And I think it becomes really tricky that when you have these platforms where so much of the public discourse is taking place, to what extent should the corporate overlord be able to control what gets elevated and what gets suppressed and really to ask some questions and what are they responsible or accountable for? You know, we would never think that we should be able to cut off the power to a particular household or a particular business that is following the law.
I think when it comes to cutting someone out of the banking system to take away their account and then really lead to blacklist them, and that's exactly what happens for a lot of low-income Americans. They get put on a list and they can't open a bank account anywhere. There has to be some real accountability around that. So, what we did was we proposed a set of policies to make it easier, one, to make sure that you actually can get a bank account, and two, to prohibit explicitly debanking someone based on whatever it may be, their religion, their political speech – things that have nothing really to do with the business of their payments or their transactions.
So, it's interesting. We saw some real efforts to promote more access to banking, but time after time we see the large banks and their lobbies fight the CFPB and others to make sure that they have the power to turn off or turn on whoever they want.
Lee Fang: You know, in the free speech wars, a lot gets conflated. We've seen the last few years the big airline industries, the big banks and many other big corporate actors champion the First Amendment. And they say, “We're using the First Amendment because we're fighting compelled government speech.” And what that means in practice is that they're getting rid of any regulations on hidden fees, on SEC regulations, on all kinds of forms of fraud that the government has attempted to fight. And they say that they're doing so under the mantle of the First Amendment, which, you know, they're fighting to protect.
At the same time, you look at the rules that you've proposed at the CFPB on debanking, and who's fighting that? It's the banks. The banks went to the Northern District of Texas, and they were litigating to prevent your efforts to give regular consumers more rights. And it's not just on the debanking issue, it's the inoperability, your ability to move your money from bank to bank over and over again. It's actually these same corporate actors that claim to champion free speech and the First Amendment who are fighting to make sure that everyday Americans don't have these rights. Can you talk a little bit about that?
Rohit Chopra: Yeah, I think that we see some of this being weaponized against individuals and their rights. I'm a big believer that regulation should really try to give more power to the consumer, to vote with their feet, to fire a company that is giving them bad service at bad pricing.
I remember in the '90s, Lee, there was a regulation that the FCC put into place that said, “If you want to change your mobile carrier, you get to take your number with you.” Some people might remember you used to actually need to change your number to switch mobile carriers. We've been trying to do a lot of those initiatives to just make it easier to do business with someone you want to and to not feel trapped. But we do see all the time free speech and other legal protections for individuals weaponized by some of the most powerful players in the industry and I think in some ways they want to have it both ways.
In 2019, I had talked a lot about how the Big Tech companies' business model had transformed from like a passive bulletin board, like the old Prodigy and CompuServe, into something that is really algorithmic content curation and creation. That means that they too should have some accountability, but of course, abuse of section 230 and abuse of free speech rights has been something that has been used to evade accountability of basic disclosures and fair dealing.
Lee Fang: You know, on that point, I want to talk a little bit about what kind of set off a lot of the dominoes leading for the Trump administration to go after your former agency, the CFPB. You know, Mark Andreessen, very famous investor, venture capitalist here in Silicon Valley, the New York Times has described him as a lifelong Democrat who was so enraged by the anti-tech, pro-censorship policies of the Biden administration that he finally flips to being Republican, to supporting Trump. That's not quite true. You know, he was a big donor to Mitt Romney, big donor to other Republicans. This kind of switch happened, I think, actually a long time ago. But he was on Joe Rogan back in November. He really singled out your agency, claimed that you were debanking his crypto friends, his startup friends and because of his lifelong interest in free speech, that's why he's really against the CFPB and, you know, many others. Elon Musk and folks in the tech community who are supporting the president, they've really championed this cause, calling for abolishing the entire agency.
Could you just talk a little bit about this controversy? Do you think there are some financial incentives at play? Mark Andreessen, of course, is a big investor in crypto businesses and other fintech businesses that you've investigated. Can you talk a little bit about that?
Rohit Chopra: Well, it was interesting when he made that allegation, I want to always give grace. Maybe he slipped up. He was very quickly corrected by even those on the right to say that, of course, the CFPB has never been involved in trying to take away people's accounts. I think, if anything, it's been the total opposite.
What I think he didn't talk about is the fact that one of the portfolio companies of his venture capital firm had gotten into trouble with the law multiple times under multiple directors of the agency crossing multiple administrations across party lines, including repeated offenses in the Military Lending Act. So, I get it that people don't want their companies that they invest in to be subject to law enforcement actions, but these are grownups. They take calculated risks, and they should accept when their bets go badly.
So, look, I don't think it's the case at all that when it came to predatory lending or other violations of the law, it seems like they're not disputing the facts of that, but instead they're simply using an amorphous argument potentially to appeal to certain constituencies, and maybe they can use that to their gain.
Lee Fang: You know, from a lot of Trump supporters and conservatives in Congress, there's a, I think a very justified concern that we don't want a government that's policing and kind of micromanaging every part of the private sector. You got to have certain freedoms to let commercial activity flourish. But, you know, I've listened to some of your interviews, and you've made a very important distinction around the difference between bank lending and bank deposits and how banks play just such a vital role in every community and the freedom not to be debanked that you fought for, is a real distinction that actually encourages greater liberty in our society. And I was wondering if you could just kind of elaborate on that. We can talk about that a little bit.
Rohit Chopra: Yeah, I'm from outside Philadelphia, and it's fair to say it's not a very big agricultural area where I'm from. And so, if the local bank doesn't really have expertise or doesn't have the ability to lend to avocado farmers, I mean, there's no avocado farms there, and that seems reasonable when it comes to lending. But if there was an avocado farmer in the community, or maybe they retired there, I don't know, it does seem strange that the bank would not maybe accept their deposits. Because a deposit is really fundamentally different. It's a place where our laws have provided for people to store their money. And banks issue deposits, but you can really get your money back at any time. And because of deposit insurance and because of discount window lending, you know your money is always going to be there, and the bank can then use that to lend into the community.
Similarly, there may be a rural bank who may not necessarily know how to issue loans for parking garages. So again, I do think there's a big difference about lending and deposit taking. There have been companies that say they have a tough time getting a loan for their project. I think sometimes they might say they're being debanked. I'm not sure that's always the case, but I do think we need much more affirmative rights for people, individuals, and families especially, to have access to a deposit account because when you do not have access to that account, you are functionally exiled for much of society and your commercial life.
And I think banks right now are algorithmically closing lots and lots of bank accounts every day. You hear from some of these CEOs, they say “The government made us do it.” The government did not make them do it. They have made their own business decisions; they're often closing accounts that they don't want to deal with or that are not profitable or whatever their own boardroom and executives’ views are. So, I do think we have to put into place more affirmative rights for people to have access to those accounts, otherwise it could be weaponized against them.
Lee Fang: I'd be remiss not to bring this up, especially given the news events for today, the financial markets and just every day we've seen the new administration dismiss or get rid of the investigations that you kind of initiated under your watch at the CFPB. Are we seeing some type of analogy of abolishing the police on financial regulators? We saw what happened in cities like San Francisco and Portland when there was kind or curtailing of police powers or police budgets where there was a lack of deterrence, where we did see a spike in violent crime and property crime and other forms of crime. And now we're seeing a kind of a mass rollback of financial policing powers.
Are you concerned about the spillover effect? How this could affect financial stability? Could this fuel a new financial crisis? What happens when crypto or some of these more unregulated schemes seep into the traditional banking market?
Rohit Chopra: Well, here's what happened today. The CFPB pardoned Wells Fargo, Bank of America, JP Morgan Chase for very significant allegations of wrongdoing around how fraud festered on Zelle. And they barely lift a finger to fix it. And here's what's interestingly, it's not unusual for cases to be litigated across administrations, and certainly they may be different policy views on how to settle or to continue prosecuting. What we're seeing is what amounts to pardons, where they're issuing a notice, no press release, no real notification to Capital One, to TransUnion and an ex-top executive, I mean real damning evidence of wrongdoing including where the litigation has proceeded and there has been findings or initial findings that the case should go forward and then it suddenly dropped, and it wasn't just cases that I brought, it was also cases brought by my Trump predecessor which is raising all sorts of questions, even in the business community about don't I just need to prove that I didn't do this, But apparently there is some other avenue where I can just get it wiped away and pardoned? And how do I get that? Who do I need to call? Who do I need to talk to? This is really not how law enforcement should work. This makes me really concerned that there is just an effort, as you said, for there to be no oversight and no detection of crime against consumers.
Look, I've spent my job a lot in civil law enforcement, and I can tell you that when the law enforcers are not aggressively looking at consumer complaints and potential fraud. It just runs wild. We saw it in the opioid crisis, we saw it in the subprime mortgage crisis. Agencies looked the other way and our whole society paid the price for it.
Lee Fang: On that note, that cheery note, I want to thank you so much for your time, Rohit, and thank you for the work you do. I really appreciate it.
Rohit Chopra: Thanks so much, Lee.
