As Expected, CFPB Reverses Course, Drops Five Lawsuits

Was it a coincidence that the Consumer Financial Protection Bureau chose to dismiss five lawsuits it had filed against companies under the previous administration at the same time that its nominee to be the next director was having his confirmation hearing? The world may never know. Regardless, the Bureau did drop five enforcement actions it had launched, one of them going back as far as 2023. After dropping one other lawsuit last week, this is yet another indicator of the type of CFPB that you can expect to see under President Trump. The dismissed cases included high-profile actions against financial institutions and service providers, such as Capital One, Rocket Homes, Vanderbilt Mortgage & Finance, and others.

• Capital One: The CFPB had accused Capital One of cheating customers out of more than $2 billion in interest payments on high-yield savings accounts. The agency claimed that the bank failed to disclose the true interest rates, depriving customers of expected returns. The case was dismissed with prejudice, meaning it cannot be refiled.
• Rocket Homes: The CFPB had sued Rocket Homes, part of Rocket Companies, accusing the real estate referral service of providing kickbacks to real estate agents to steer clients toward its affiliated lender, Rocket Mortgage. This case was also dismissed with prejudice.
• Vanderbilt Mortgage & Finance: A lawsuit filed against Vanderbilt Mortgage, owned by Warren Buffett’s Berkshire Hathaway, alleged that the company had trapped customers in unaffordable loans, leading many families into financial distress. The CFPB voluntarily dismissed the case without further action.
• Pennsylvania Higher Education Assistance Agency (PHEAA): The CFPB filed a case against PHEAA, a student loan servicer, accusing the company of improperly collecting on loans that had been discharged in bankruptcy. This case was also dropped without further legal action.
• Heights Finance: The CFPB had accused Heights Finance of “loan churning,” where borrowers were repeatedly refinanced into new loans, generating excessive fees and charges. This case was also dismissed.

Why it matters

: The move to drop these lawsuits comes amid a broader campaign by the Trump administration to drastically downsize and restructure the CFPB. Acting Director Russell Vought has implemented a stop-work order that has shuttered the bureau’s offices and led to significant staff layoffs. This is the latest in a series of actions that have raised concerns about the future of consumer protection under the CFPB, especially as President Trump and his allies, including Elon Musk, have signaled their desire to dismantle the agency.