The US Consumer Financial Protection Bureau (CFPB) has dropped five enforcement actions against financial services companies, including a major case against Capital One, in a move that has been criticized as a dismantling of the agency’s ability to protect consumers. The dismissals occurred while President Donald Trump’s nominee to head the CFPB, Jonathan McKernan, was testifying before the Senate.
The cases dropped include one against Capital One, which was accused of illegally cheating customers out of over $2 billion in interest payments. Another case was dropped against Pennsylvania Higher Education Assistance Agency (PHEAA), a student loan servicer accused of collecting on discharged loans.
Critics say the Trump administration’s actions are part of a larger effort to dismantle the CFPB, which they claim has become politicized. Consumer advocacy groups have warned that the agency’s dismissal will allow corporations to abuse consumers with impunity.
The dismissals follow recent changes made by the Trump administration, including firing staff and shutting down the agency’s Washington offices. Despite these efforts, the CFPB still faces a legal challenge from an employee union over its actions.
In his confirmation testimony, McKernan stated that he would work to uphold the agency’s law, but critics remain skeptical about his commitment to consumer protection.
Source: https://www.reuters.com/legal/us-cfpb-drops-enforcement-action-against-capital-one-2025-02-27