NEW YORK — The Consumer Financial Protection Bureau (CFPB) has recently discontinued several enforcement actions against businesses such as Capital One and Rocket Homes. This comes on the heels of new leadership and subsequent changes at the agency, instigated by directives from the Trump administration.
The dismissals, formalized through voluntary notices filed on Thursday, bring an end to lawsuits initially filed against Capital One, Rocket Homes, Vanderbilt Mortgage and Finance—a subsidiary of Warren Buffett’s Berkshire Hathaway—and others. These legal proceedings were initiated under the previous director, Rohit Chopra, who was dismissed by former President Donald Trump a few weeks ago, leading to significant upheaval within the CFPB. Following the leadership change, the White House instructed the agency to significantly curtail its operations. It also shuttered the CFPB’s main offices and moved to terminate numerous employees.
President Trump has justified his administration’s aggressive posture against the CFPB, including asserting that the agency was “designed to hurt people.” Despite these critiques, proponents of the CFPB argue that the agency plays a critical role in safeguarding consumers from exploitative business practices.
Jonathan McKernan, previously a board member of the Federal Deposit Insurance Corporation, was nominated by Trump as the new director of the CFPB. McKernan was recently subject to a Senate committee hearing.
The CFPB’s mission involves crafting regulations and taking enforcement measures to shield consumers from unfair or deceptive actions by various companies. Since its inception, the bureau claims to have achieved nearly $20 billion in financial relief for American consumers through debt cancellations, compensations, and loan reductions.
Historically, the CFPB has taken legal action against entities such as banks, mortgage service providers, credit card companies, student loan handlers, payday lenders, money transfer services, credit reporting agencies, and debt collectors.
Before Trump’s administration took power, the CFPB launched a lawsuit against Capital One. The bureau accused the bank of misleading consumers about high-interest savings accounts, allegedly resulting in over $2 billion in lost interest payments. Another suit from January 6 against Vanderbilt Mortgage alleged the company coerced consumers into unaffordable loans for manufactured homes. Additionally, in December, a complaint against Rocket Homes accused the company of engaging in a “kickback scheme” to divert prospective borrowers to its sister company, Rocket Mortgage, rather than competitors.
These cases have now been terminated following the CFPB’s recent actions. Legal documents specifically cite actions in the Rocket Homes case, stating, “The Consumer Financial Protection Bureau dismisses this action, with prejudice, against all Defendants.” A dismissal “with prejudice” indicates the case cannot be refiled. This phraseology also appeared in the dismissals concerning Capital One and Vanderbilt Mortgage.
Rocket Homes hailed the dismissal, stating that “it is good to see the truth come to light.” The company labeled the lawsuit as an “empty claim” by the former CFPB director Chopra during his final days in office. Capital One also expressed relief, noting it had “strongly disputed” the claims filed against it. Requests for comments were issued to Vanderbilt Mortgage.
The CFPB is not the only federal body retracting previous enforcement actions under the current administration. The U.S. Securities and Exchange Commission (SEC) has similarly closed or put on hold lawsuits against several cryptocurrency platforms, signaling a more crypto-amicable stance under Trump.
Earlier this month, a collaborative move by Binance and the SEC saw them file to pause a prominent lawsuit against the crypto exchange. Similarly, cases involving Coinbase and Robinhood have reportedly been either dismissed or concluded, despite the SEC withholding further immediate details.
