The Consumer Financial Protection Bureau (CFPB) has dropped five lawsuits against major companies, including Capital One Financial and Rocket Homes. The moves come as part of the agency’s efforts to downsize itself under the Trump administration.
The CFPB had filed the lawsuits in December and January against companies it accused of victimizing customers. However, just days before the inauguration, the agency dropped one lawsuit against a payday lender. On Thursday, it announced that it was dropping five new cases, including those against Rocket Homes and Capital One Financial.
The drop in cases has raised concerns among Democrats and consumer advocates, who fear that the Trump administration is attempting to cripple the CFPB’s ability to enforce consumer protection laws.
In December, the agency sued Rocket Homes for allegedly providing kickbacks to real estate agents to steer customers towards its sister lender. In January, it sued Berkshire Hathaway-owned Vanderbilt Mortgage & Finance for allegedly trapping customers in loans they couldn’t afford.
The CFPB had previously filed a case against Capital One, claiming the bank had cheated customers out of $2 billion by advertising a high-yield savings account that paid little interest.
Critics have accused the agency of using heavy-handed tactics and stretching its legal authority. However, supporters argue that the CFPB plays a crucial role in protecting consumers from predatory lenders.
As part of its efforts to downsize itself, the Trump administration has frozen the agency’s work and cancelled contracts with expert witnesses. This move is unprecedented for the CFPB, which had only previously dismissed one lawsuit without obtaining relief for consumers.
The agency’s future remains uncertain, with a federal judge temporarily blocking Acting Director Russell Vought from laying off staff due to concerns about his plans. A new nominee, Jonathan McKernan, has been nominated to permanently head the bureau, but it is unclear whether he will continue the CFPB’s enforcement efforts.
Source: https://finance.yahoo.com/news/the-cfpb-just-dropped-a-bunch-of-its-own-lawsuits-as-the-agencys-future-hangs-in-limbo-214153537.html