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 One for allegedly avoiding billions in interest payments.
The dismissals continue President Donald Trumpâs rapid moves to dismantle the agency, which he has said should be eliminated, but occurred while his nominee to head the CFPB, Jonathan McKernan, was on Capitol Hill testifying before the Senate in a confirmation hearing.
The agencyâs fate had seemed grim since Trump took office last month and Thursdayâs 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 of illegally cheating customers who held its flagship âhigh interestâ savings account out of more than $2 billion in interest payments.
It also on Thursday 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, the CFPB dropped a case against the online lender Solo Funds, which the agency had said deceived borrowers about loan costs.
Likewise, the CFPB dropped cases against the Berkshire Hathaway-owned Vanderbilt Mortgage & Finance, accused of steering borrowers toward unaffordable mortgages, and Rocket Homes, which the agency in December charged with resorting to illegal kickbacks in a mortgage scheme.
Representatives for Capital One, Vanderbilt, PHEAA and the CFPB 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.
âWe are proud to put this matter behind us and remain focused on our mission to help everyone home.â
Since taking office, Trump and his downsizing czar Elon Musk have vowed to destroy the 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 Trumpâs comments, the administration has said in court filings that it intends to operate a more streamlined and efficient CFPB, which Democrats say will be one wholly inadequate to meet the agencyâs 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 agencyâs past enforcement actions as excessive but said if confirmed, he would work to uphold the agencyâs legal mandates.
âIâm fully committed to following the law fully and faithfully,â he said.
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