CFPB Freeze Leaves JPMorgan, Bank of America, Capital One Lawsuits in Limbo

The Consumer Financial Protection Bureau (CFPB) has been a thorn in the side of major financial institutions, with several high-profile lawsuits pending against JPMorgan Chase & Co. (JPM), Bank of America (BAC), and Capital One Financial Corp. (COF). However, the recent appointment of Treasury Secretary Scott Bessent as acting director of the CFPB has led to a freeze on the agency's activities, leaving these lawsuits in limbo.

Bessent ordered the CFPB to halt all rulemaking, communications, litigation, and other activities, according to an email obtained by Bloomberg Law. This move comes after President Donald Trump fired Biden-era Director Rohit Chopra and appointed Bessent as his replacement. The freeze is intended to "promote consistency with the goals of the Administration," as stated in the email.

The halt in CFPB activities has significant implications for the ongoing lawsuits against JPMorgan, Bank of America, and Capital One. Here's a breakdown of how the freeze might affect these cases and their potential outcomes:

1. JPMorgan Chase & Co. (JPM) and Zelle:
- The CFPB sued JPMorgan, along with Bank of America, Wells Fargo, and Zelle, in January 2025, alleging failures to address widespread fraud and unauthorized transactions on the Zelle platform (Source: Benzinga).
- With the freeze on CFPB activities, the agency may not be able to actively pursue this lawsuit or defend its position in court.
- The outcome of this case is uncertain, as the CFPB might not be able to continue its litigation efforts. Other parties, such as state attorneys general, could potentially step in to defend the CFPB's position, but this would depend on their willingness and resources.



2. Capital One Financial Corp. (COF):
- The CFPB sued Capital One in January 2025, accusing the bank of cheating millions of consumers out of more than $2 billion in lost interest (Source: Benzinga).
- Similar to the JPMorgan case, the freeze on CFPB activities could hinder the agency's ability to actively pursue this lawsuit or defend its position in court.
- The outcome of this case is also uncertain, as the CFPB might not be able to continue its litigation efforts. Other parties could potentially step in to defend the CFPB's position, but this would depend on their willingness and resources.

In both cases, the freeze on CFPB activities could lead to delays, continuances, or even dismissals of the lawsuits. However, it's essential to note that other parties, such as state attorneys general or consumer advocacy groups, might intervene to continue the litigation efforts. The ultimate outcome will depend on the willingness and resources of these potential interveners, as well as the courts' decisions regarding the continuation of these cases.

The CFPB's halt in rulemaking and enforcement actions also has significant implications for the financial industry and consumers. Banks may face reduced scrutiny and compliance costs, but consumers could see a decrease in protection and an increase in unfair practices. The regulatory uncertainty created by the pause in rulemaking could also affect banks' strategic planning and compliance efforts.

In conclusion, the CFPB's freeze on activities has left the ongoing lawsuits against JPMorgan, Bank of America, and Capital One in limbo. The ultimate outcome of these cases will depend on the willingness and resources of potential interveners, as well as the courts' decisions. The halt in rulemaking and enforcement actions also has significant implications for the financial industry and consumers, with potential impacts on both banks and consumers.