Another day, another dump of news related to the Consumer Financial Protection Bureau. Here is a roundup of news that happened yesterday, including developments involving the potential new director and former director of the Bureau as well as the CFPB dropping another enforcement action it had initiated under former director Rohit Chopra.
McKernan’s Confirmation Moves Forward in Senate
The Senate Banking Committee voted 13-11 yesterday to advance Jonathan McKernan’s nomination to be the next director of the CFPB. McKernan, a former FDIC board member, has garnered support from Republicans who believe his leadership will bring much-needed reforms to the CFPB, which has been criticized for overreach in the past. Senate Banking Chairman Tim Scott [R-S.C.] expressed optimism, calling McKernan’s nomination a step toward accountability and economic prosperity.
However, McKernan’s nomination remains divisive. Committee Ranking Member Sen. Elizabeth Warren [D-Mass.] criticized McKernan’s potential to dismantle the agency, arguing that his confirmation would lead to further deregulation and leave consumers unprotected. McKernan’s nomination is expected to be considered by the full Senate as early as next week.
Cordray Warns of CFPB’s Potential Demise
Former CFPB Director Richard Cordray, who served as the agency’s first head, voiced strong concerns about the Trump administration’s attempts to undermine the CFPB in a published report yesterday. Speaking to his home state’s Columbus Dispatch, Cordray likened the dismantling of the agency to removing police from a high-crime area, warning that it would lead to unchecked financial misconduct.
Cordray also pointed out the potential conflict of interest involving Elon Musk’s role in the CFPB’s future. Musk’s social media company, X, recently announced a partnership with Visa to process digital payments. Cordray raised concerns that Musk’s influence, combined with his financial interests in both Tesla and X, could compromise the agency’s ability to regulate the financial services industry effectively.
“I’m concerned that bad actors will have free reign when the ‘police’ are gone,” Cordray said. He emphasized the importance of the CFPB in protecting all Americans from financial abuses, regardless of political affiliation.
CFPB Drops Lawsuit Against Acima
The CFPB has voluntarily dismissed another enforcement action, this time against Acima Leasing, a provider of lease-to-own solutions. The lawsuit, initially filed in 2024, alleged that Acima’s business practices violated consumer protection laws. However, the CFPB has dropped the case with prejudice, meaning the claims cannot be revived in the future.
Acima, which was acquired by Upbound Group in 2021, vigorously disputed the CFPB’s allegations and argued that the agency overstepped its authority. In a statement, Acima CEO Mitchell Fadel expressed relief, stating that the dismissal “finally brings this longstanding matter to an end.” As a result, Acima will not be required to make any changes to its business practices or pay any fines. The decision to drop the lawsuit also led Acima to dismiss a related lawsuit against the CFPB in Texas.
This is just one of several cases that the CFPB has dropped under Acting Director Russell Vought’s leadership, signaling a potential shift in enforcement priorities under the new administration.
