After only a few weeks of new leadership and agency turbulence brought on by directives from the Trump administration, the Consumer Finance Protection Bureau has abandoned a number of enforcement cases against firms like Capital One and Rocket Homes.
The CFPB voluntarily dismissed its claims against Capital One, Rocket Homes, Vanderbilt Mortgage and Finance, which is owned by Warren Buffett’s Berkshire Hathaway, and other companies on Thursday.
All of those lawsuits were brought under the former director of the agency, Rohit Chopra, who was fired by President Donald Trump a few weeks ago. Since then, the CPFB has been in disarray, with the White House ordering it to stop almost all of its operations, closing its headquarters, and terminating dozens of its employees.
Trump has defended the broadside his administration has taken against the CFPB, including recent allegations that the agency was founded with the intention of destroying people. He proposed Jonathan McKernan, a former board member of the Federal Deposit Insurance Corporation, to be the new director of the agency; McKernan was subject to a Senate committee hearing on Thursday.
In order to shield customers against unfair, dishonest, or abusive acts by a variety of financial institutions and companies, the CFPB is tasked with developing regulations and pursuing enforcement actions. Since its inception, the organization claims to have secured approximately $20 billion in financial relief for American customers in the form of reduced loans, compensation, and debt cancellations.
Banks, mortgage servicers, credit card businesses, student loan processors, payday lenders, money transfer companies, credit reporting agencies, and debt collectors are frequently involved in CFPB litigation.
The CFPB filed a lawsuit against Capital One last month, alleging that the banking behemoth defrauded customers of over $2 billion in interest payments by misrepresenting its high-interest savings account services.
In a lawsuit it filed last month, Vanderbilt Mortgage was accused of pressuring customers into taking out loans they couldn’t pay.
Additionally, in its December complaint, the CFPB accused Rocket Homes of engaging in a kickback scheme to illegally divert potential borrowers from rival companies and direct them to Rocket Mortgage, which is owned by the same parent firm.
However, the Consumer Financial Protection Bureau dismissed this lawsuit, with prejudice, against all defendants, according to court records in the Rocket Homes case on Thursday. The CFPB’s lawsuits against Capital One and Vanderbilt Mortgage were dismissed with similar language.
Rocket Homes praised its dismissal in a statement released on Thursday, saying it is nice to see the truth come to light and characterizing the lawsuit as a baseless allegation made by former CFPB director Chopra to get his name in the news during his last days in office.
Noting that it had vehemently contested the lawsuit brought against the firm, Capital One also applauded the CFPB’s ruling on Thursday.
Vanderbilt Mortgage was also contacted by the Associated Press for comment.
The Associated Press
