CFPB drops slew of cases including against Capital One for allegedly cheating customers
The Consumer Financial Protection Bureau on Thursday dropped a series of enforcement actions against financial services companies accused of wrongdoing under the prior administration, including a major case against Capital OneĀ for allegedly avoiding billions in interest payments.
The dismissals continue President Donald TrumpāsĀ rapid moves to dismantle the agency, which he has said should be eliminated, but occurred while his nominee to head theĀ CFPB, Jonathan McKernan, was on Capitol HillĀ testifying before the SenateĀ in a confirmation hearing.
The agencyās fate had seemed grim sinceĀ TrumpĀ took officeĀ last monthĀ and ThursdayāsĀ actions confirmed its dismantling would include a swift retrenchment of pending enforcement actions.
McKernan nevertheless told lawmakers he would continue to take consumer protection enforcement actions if confirmed.
The agency dropped the case against Capital One, after accusing the bank last month ofĀ illegally cheating customersĀ who held its flagship āhigh interestā savings account out of more than $2 billion in interest payments.
It also on ThursdayĀ dismissed a lawsuit brought last year against the student loan servicer Pennsylvania Higher Education Assistance Agency (PHEAA), accused of illegally collecting on student loans discharged in bankruptcy.
Last week, theĀ CFPBĀ dropped a caseĀ against the online lender Solo Funds, which the agency had said deceived borrowers about loan costs.
Likewise, theĀ CFPBĀ dropped cases against the Berkshire Hathaway-ownedĀ Vanderbilt Mortgage & Finance,Ā accused of steering borrowers toward unaffordable mortgages, and Rocket Homes, which the agency in December charged with resorting toĀ illegal kickbacks in a mortgage scheme.
Representatives for Capital One, Vanderbilt, PHEAA and theĀ CFPBĀ did not immediately respond to requests for comment.
In a statement, Rocket Homes said the case against it was based on faulty claims and never should have been brought.
āWe are proud to put this matter behind us and remain focused on our mission to help everyone home.ā
Since taking office, Trump and his downsizing czar Elon MuskĀ have vowed to destroy theĀ CFPB, firing scores of staff, shutting its Washington offices and moving to cancel its lease, while placing virtually all agency workers on temporary leave, actions which employee unions and consumer advocates have challenged in court.
Despite Trumpās comments, the administration hasĀ said in court filingsĀ that it intends to operate a more streamlined and efficientĀ CFPB, which Democrats say will be one wholly inadequate to meet the agencyās legal mandates.
Pending the outcome of a legal motion, the administration has agreed not to fire more personnel, alter or remove data or defund the agency.
In his confirmation testimony on Thursday, McKernan criticized the agencyās past enforcement actions as excessive but said if confirmed, he would work to uphold the agencyās legal mandates.
āIām fully committed to following the law fully and faithfully,ā he said.
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