The Consumer Financial Protection Bureau (CFPB) on Thursday dismissed multiple enforcement actions, including a high-profile case against Capital One, as the Trump administration moves swiftly to overhaul the agency's direction. The cases, which had been brought under the previous administration, involved allegations of financial misconduct affecting billions of dollars in consumer funds.
In legal filings, the CFPB voluntarily dropped cases against Capital One, Berkshire Hathaway-owned Vanderbilt Mortgage & Finance, Rocket Cos.' Rocket Homes Real Estate, and the Pennsylvania Higher Education Assistance Agency (PHEAA). The lawsuits had accused these companies of various violations, including deceptive mortgage lending practices, improper student loan collections, and illegal kickbacks to real estate agents.
"The Plaintiff, the Consumer Financial Protection Bureau, dismisses with prejudice this action against all Defendants," the agency stated in its legal filing for the Capital One case, using similar language in the other dismissals.
Capital One had been accused of cheating consumers out of more than $2 billion in interest payments on savings accounts. A company spokesperson welcomed the decision, saying the bank "strongly disputed" the allegations. Rocket Homes also responded positively, stating, "Rocket Homes has always connected buyers with top-performing agents based only on objective criteria like how well they helped homebuyers achieve their dream of homeownership. We are proud to put this matter behind us."
The agency's actions align with the Trump administration's broader efforts to reshape the CFPB. Since taking office, Trump and his associate Elon Musk have moved to dismantle the agency, firing hundreds of employees, shutting down its Washington headquarters, and significantly reducing its enforcement role. Employee unions and consumer advocacy groups have challenged these moves in court, arguing they undermine the agency's legal mandate to protect consumers.
Eric Halperin, the CFPB's former head of enforcement, called the dismissals unprecedented. "Five cases have been dismissed so far by this administration, whereas in the entire history of the bureau, there's only been one other case dismissed without relief for any consumers," he said. He emphasized that by dismissing the cases with prejudice, the CFPB has permanently given up the ability to seek compensation for affected consumers.
The decision drew sharp criticism from consumer advocates and Democratic lawmakers. "Just from the cases that were dismissed today, there's billions of dollars in consumer harm that the CFPB will never be able to get back for consumers," Halperin added.
The dismissals were announced on the same day that Jonathan McKernan, Trump's nominee to lead the CFPB, testified before the Senate in a confirmation hearing. Sen. Elizabeth Warren (D-Mass.) pressed McKernan on the timing of the decision, saying, "Literally while you've been sitting here and you've been talking about the importance of following the law, we get the news that the CFPB is dropping lawsuits against companies that are cheating American families, or alleged to be cheating American families." She added, "It seems to me the timing of that announcement is designed to embarrass you."
McKernan defended the agency's new approach, saying that while he believed past enforcement actions had been excessive, he was committed to upholding the CFPB's legal responsibilities. "I'm fully committed to following the law fully and faithfully," he said during the hearing.
Meanwhile, financial markets reacted positively to the news. Shares of Capital One and Rocket Cos. rose following the announcement, as investors interpreted the dismissals as a sign of regulatory easing.
