CFPB Withdraws Legal Actions Against Capital One, Others

NEW YORK – The Consumer Finance Protection Bureau (CFPB) has decided to drop a series of enforcement actions against prominent companies such as Capital One and Rocket Homes, following recent changes in the agency’s leadership and a period of upheaval initiated by directives from the Trump administration.

The CFPB filed voluntary dismissals on Thursday for lawsuits previously initiated against notable firms including Capital One, Rocket Homes, and Vanderbilt Mortgage and Finance, a subsidiary of Warren Buffett’s Berkshire Hathaway, among others. These legal actions were undertaken during the tenure of the bureau’s former director, Rohit Chopra, who was dismissed by President Donald Trump a few weeks ago. The agency has since experienced significant internal disruptions, with the White House instructing it to cease most operations, shutting down its headquarters, and terminating numerous employees.

President Trump has justified his administration’s aggressive stance toward the CFPB, asserting that the agency was designed to disadvantage individuals. He has put forward Jonathan McKernan, a former Federal Deposit Insurance Corporation board member, as the nominee for the new director of the CFPB. McKernan underwent a Senate committee hearing on Thursday as part of the nomination process.

The CFPB’s mandate involves formulating rules and executing enforcement measures to shield consumers from unethical, misleading, or exploitative practices by various financial entities and businesses. Since its inception, the bureau claims to have secured close to $20 billion in financial relief for American consumers through debt cancellations, compensation, and reduced loan obligations.

Typically, the bureau’s litigation encompasses banks, mortgage servicers, credit card firms, student loan processors, payday lenders, money transfer services, credit reporting agencies, and debt collection agencies. Just last month, the CFPB filed a lawsuit against Capital One, alleging deceptive conduct in relation to its high-yield savings account offerings, which reportedly resulted in consumers losing over $2 billion in missed interest payments. Concurrently, the bureau took legal action against Vanderbilt Mortgage, accusing it of coercing consumers into unaffordable loan agreements. Another complaint in December targeted Rocket Homes, citing an alleged “kickback scheme” devised to unlawfully channel prospective lenders toward Rocket Mortgage, instead of diversifying competition.

However, on Thursday, the case against Rocket Homes was officially closed, as indicated by the court documentation stating that the “Consumer Financial Protection Bureau dismisses this action, with prejudice, against all Defendants.” Similar language was employed in the dismissals concerning the lawsuits against Capital One and Vanderbilt Mortgage.

Rocket Homes expressed relief over the dismissal, stating that it was “satisfying to see the truth uncovered” and described the lawsuit as an “unfounded claim introduced by former CFPB director Chopra for the sole purpose of gaining publicity during his last days in office.” Capital One echoed this sentiment, acknowledging the CFPB’s decision on Thursday and highlighting that it had “vigorously contested” the claims made against the company.

Further communication was made with Vanderbilt Mortgage for their comments on the situation.