CFPB Drops Enforcement Lawsuits Against Capital One, Rocket Homes, and More

The Consumer Financial Protection Bureau (CFPB) has recently made headlines by dropping several enforcement actions against prominent financial institutions, including Capital One and Rocket Homes. This move, which comes under new leadership, has raised questions about the agency's priorities and the potential impact on consumer protection. This article will delve into the background of these dismissals, their implications, and the reactions from the affected companies and lawmakers.



The CFPB, under the Trump administration, has taken a dramatic shift in its approach to enforcement and supervision of financial institutions. The agency has been ordered to halt nearly all work, close its headquarters, and fire scores of employees. This abrupt change in operations has led to the dismissal of several enforcement lawsuits that were initiated under the previous director, Rohit Chopra.

One of the dismissed cases involves Capital One, which was accused of misleading consumers about its high-interest savings accounts. The CFPB alleged that the banking giant cheated customers out of more than $2 billion in lost interest payments as a result of its deceptive practices. However, Capital One welcomed the dismissal of its case, noting that it had "strongly disputed" the action filed against the company.

Another dismissed case pertains to Rocket Homes, a unit of Rocket Cos. The CFPB had accused the company of engaging in a "kickback scheme" to illegally steer prospective borrowers to Rocket Mortgage, which operates under the same parent company. Rocket Homes also lauded the news of its dismissal, stating that it was "good to see the truth come to light" and that the suit was an "empty claim brought forth by former CFPB director Chopra for the sole purpose of seeing his name in headlines during the final days in public office."

The dismissals with prejudice mean that the CFPB has agreed to never bring these claims again, shutting off the possibility of clawing back funds for consumer relief. This decision has raised concerns about the potential billions of dollars in consumer harm that the CFPB will never be able to recover for consumers. Eric Halperin, the CFPB's former head of enforcement, stated that the dismissals could result in billions of dollars in consumer harm that the CFPB will never be able to get back for consumers.

The timing of the dismissals has also drawn criticism from lawmakers, such as Sen. Elizabeth Warren (D-Mass.), who suggested that the announcement was designed to embarrass the nominee for the CFPB's permanent director, Jonathan McKernan, during his Senate confirmation hearing. Warren stated, "It seems to me the timing of that announcement is designed to embarrass you."

The dismissals of these enforcement actions reflect a significant shift in priorities for the CFPB under new leadership. This change in approach has raised questions about the agency's commitment to consumer protection and its willingness to hold financial institutions accountable for harming consumers. As the CFPB moves forward under new leadership, it will be crucial to monitor its actions and assess the impact on consumer protection and the behavior of financial institutions in the future.