While there is plenty of attention focused on the future of the Consumer Financial Protection Bureau and just how many employees, if any, will be working at the Bureau, there has also been activity on a number of other fronts involving lawsuits the CFPB is engaged in with the companies it regulates. Read on to learn which suits the CFPB is dropping, which one it is choosing to continue fighting, and its appeal of last week’s ruling blocking it from firing 1,500 staffers.
CFPB v. PayPal: The Dismissal of Appeal
The CFPB and PayPal have agreed to jointly dismiss the CFPB’s appeal in the long-standing dispute over a rule from the first Trump administration that sought to require digital wallet providers, like PayPal, to disclose fees on a standardized form meant for prepaid cards. The rule, initially designed to extend fee disclosures to digital wallets, faced legal challenges from PayPal, which argued that such platforms, used primarily for storing payment credentials, should not be classified like prepaid cards. The District Court for the District of Columbia had sided with PayPal in 2020 and again in 2024, and the CFPB’s decision to drop the appeal further signals a shift in its approach under the current administration.
CFPB v. Reliant Holdings: Case Dismissed
The CFPB has voluntarily dismissed its case against Reliant Holdings, which allegedly trapped consumers in high-cost membership programs. The company had charged consumers a $300 annual membership fee for a card that could only be used at its own overpriced online store. The dismissal, which was approved by the court, came with prejudice, meaning the case cannot be reopened.
CFPB v. Experian: Legal Challenges Persist
The CFPB is vowing to continue its fight against credit reporting giant Experian, alleging that the company violated the Fair Credit Reporting Act by mishandling consumer disputes. Experian allegedly mischaracterized consumer disputes and failed to conduct reasonable investigations when information in consumer reports was disputed. The CFPB’s complaint includes violations related to Experian accepting faulty responses from furnishers of credit information and reinserting deleted information without the necessary safeguards. Experian is seeking to have the case dismissed, which the CFPB is fighting. In a filing last week, the CFPB accused Experian of “grossly mischaracterizing” the accusations that have been made against it.
CFPB’s Layoff Controversy: Appeal and Legal Pushback
The Trump administration is appealing a federal judge’s decision to temporarily block the CFPB from proceeding with mass layoffs, which would have cut approximately 1,500 employees, leaving only 200 — the number the administration says is needed to run the Bureau going forward. The appeal comes after Judge Amy Berman Jackson ruled that the layoffs and the severing of employees’ access to agency systems could violate her previous order that blocked attempts to dismantle the CFPB. The government’s emergency motion filed with the Court of Appeals for the D.C. Circuit argues that the layoffs are necessary to realign the agency with its new leadership priorities, and that the appeal should be allowed to proceed despite Jackson’s injunction.
