Trump CFPB Drops Cases Against Five Companies, Drawing Criticism

The companies named in the dismissed cases were Capital One, Heights Finance, the Pennsylvania Higher Education Assistance Agency (PHEAA), Rocket Homes and Vanderbilt Mortgage & Finance. The CFPB had accused Capital One of depriving millions of customers of more than $2 billion in interest; Heights Finance of loan-churning that generated hundreds of millions of dollars in costs and fees; and PHEAA of collecting on loans discharged in bankruptcy and sending false information to credit reporting companies. The allegations against Rocket Homes involved incentives for real estate agents and brokers who steered buyers to its loans. Vanderbilt Mortgage was accused of trapping borrowers in risky manufactured-home loans.

The Associated Press reported that court paperwork described the Rocket Homes dismissal as being “with prejudice”; similar wording appeared in the Capital One and Vanderbilt Mortgage cases. The article says this means the cases cannot be refiled. The CFPB had also dropped a case against SoLo Funds the previous week. The agency had accused the company of misleading borrowers about loan costs. Acting CFPB leader Russell Vought said on social media that the bureau had been wrong to pursue SoLo and wrote, “More to come.”

Advocates said the dismissals undermine the agency’s consumer-protection role. Christine Chen Zinner of Americans for Financial Reform said the Capital One decision lets the bank keep $2 billion that should have gone to depositors. Erin Witte of the Consumer Federation of America called the case dismissal a “gift to Capital One,” adding that the sum was less than half a percent of the bank’s total assets but could make a significant difference to customers. She described the wider set of dismissals as “unprecedented.”

The decisions were announced as the Senate Banking Committee held a hearing for McKernan, a former Federal Deposit Insurance Corporation board member awaiting confirmation. Accountable.US said the dismissals contrasted with his promise to review existing CFPB lawsuits before deciding whether to drop them. Senator Elizabeth Warren raised the cases during the hearing, saying their timing appeared designed to show who was in charge. Consumer advocates also criticized the administration’s broader efforts to scale back the agency; the companies’ alleged conduct has not been established in the article as proven wrongdoing.