The Consumer Financial Protection Bureau (CFPB) has officially withdrawn at least four enforcement lawsuits initiated under its previous leadership. Legal filings confirm that cases involving Capital One, Vanderbilt Mortgage & Finance (a subsidiary of Berkshire Hathaway), Rocket Homes Real Estate (a part of Rocket Cos.), and Pennsylvania Higher Education Assistance Agency have been voluntarily dismissed.
CFPB Drops Cases With Prejudice
In the Capital One case, the CFPB stated, “The Plaintiff, the Consumer Financial Protection Bureau, dismisses with prejudice this action against all Defendants.” Similar notices were issued for the other cases, effectively preventing the CFPB from revisiting these claims in the future.
A Shift in Approach Under New Leadership
The decision marks a significant policy shift since Acting CFPB Director Russell Vought took office. The agency has rapidly scaled back enforcement efforts, shuttering its Washington headquarters, laying off approximately 200 employees, and instructing remaining staff to halt nearly all ongoing work.
Under former leadership, the CFPB had accused Capital One of misleading customers on interest payments, claimed Vanderbilt Mortgage failed to assess borrowers’ financial capabilities, alleged Rocket Homes engaged in improper dealings with real estate agents, and charged the Pennsylvania Higher Education Assistance Agency with unlawful loan collection practices.
Market Reaction and Business Responses
A spokesperson from Capital One welcomed the dismissal, stating the bank had “strongly disputed” the CFPB’s claims. Rocket Homes also expressed satisfaction, emphasizing that its agent selection process has always been merit-based.
Following the lawsuit dismissals, shares of Capital One and Rocket Cos. saw an uptick in their stock prices, reflecting investor optimism.
Billions in Consumer Claims Abandoned
Insiders report that additional CFPB cases with pending court dates might soon face the same fate, mirroring last week’s dropped lawsuit against fintech lender SoLo Funds. Former CFPB enforcement head Eric Halperin described this wave of dismissals as an unprecedented move, arguing that the bureau is forfeiting consumer relief worth billions.
“This represents billions of dollars in consumer harm that the CFPB will never be able to recover,” Halperin stated.
Political Fallout and Future of CFPB
As the lawsuits were being dropped, senators questioned Jonathan McKernan, President Trump’s nominee to permanently lead the CFPB, during his confirmation hearing. Senator Elizabeth Warren criticized the timing of the dismissals, suggesting they undermine accountability for companies accused of harming consumers.
With the CFPB’s future direction now in question, stakeholders across the financial sector are closely watching how the agency plans to handle enforcement moving forward.
