By Dylan Tokar and Gina Heeb

Key Democrats are calling on the heads of the Federal Reserve, the Federal Deposit Insurance Corp. and others to safeguard the sensitive data they hold after the Trump administration threw one of the nation's banking regulators into turmoil.

In their Wednesday letter, which was earlier reported by The Wall Street Journal, Sen. Elizabeth Warren (D., Mass.) and Rep. Maxine Waters (D., Calif.) said they thought that recent access by Elon Musk's Department of Government Efficiency into the internal systems of the Consumer Financial Protection Bureau and the Treasury Department was in violation of the Constitution and other laws.

DOGE gained access to systems and databases with personally identifiable information of "nearly all" Americans and confidential supervisory information of financial institutions, according to the letter addressed to Fed Chair Jerome Powell and the heads of the FDIC, the Office of the Comptroller of the Currency and the National Credit Union Administration.

The Trump administration has discussed a dramatic reshaping of U.S. financial regulators, including by potentially consolidating oversight of banks under the Treasury Department. Other bank regulators have been bracing for potential upheaval after the CFPB was targeted in recent days.

In their letter, Warren and Waters urged regulators to not "aid and abet this kind of unconstitutional and unlawful conduct" should they "receive any request to do so by DOGE or other officials." The letter cited the critical payment infrastructure the Fed operates and the sensitive data regulators maintain.

The Democrats also said DOGE accessed sensitive business information that could personally benefit Musk, who has outlined plans to add a payment feature to social-media platform X.

Musk has defended the actions of DOGE, calling efforts to review the Treasury payment system an example of instituting " common-sense controls" and saying the public could make its own judgments about his potential conflicts of interest.

The CFPB's office was closed by acting director Russell Vought, following the arrival of DOGE officials at its Washington headquarters on Thursday. Vought has frozen the agency's investigations and supervisory activities and placed key division leaders on administrative leave, prompting their resignations.

Vought on Tuesday moved to end the employment of any CFPB employees who were still in a probationary period following their hiring. It couldn't be immediately determined how many people were affected by the decision.

Late Tuesday, Trump nominated Jonathan McKernan, who had been at the FDIC until this week, to replace Vought as the CFPB's director, pending Senate confirmation.

The union representing CFPB employees on Saturday filed lawsuits, arguing that several of Vought's actions violated the Constitution's separation of powers principle and privacy laws governing employees' sensitive personal information. Also over the weekend, a federal judge temporarily restricted DOGE's access to the Treasury payment system.

Write to Dylan Tokar at dylan.tokar@wsj.com and Gina Heeb at gina.heeb@wsj.com

(END) Dow Jones Newswires

February 12, 2025 15:32 ET (20:32 GMT)

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