Trump’s CFPB Litigation Capitulation Amounts to Pardoning Corporate Wrongdoers
Seven dropped cases would have helped people who were ripped off in financial transactions

By Christine Chen Zinner

Last week, the day the nominee for the Director of the Consumer Financial Protection Bureau (CFPB) was testifying before the Senate, Trump’s CFPB dropped five federal enforcement cases, letting lawbreakers off the hook as the Senate considered the future leadership of the agency. This litigation capitulation gave a green light to Wall Street banks, predatory lenders, Big Tech payment apps, and a slew of other shady businesses to cheat, rip off, and bully people. The CFPB dropped these cases “with prejudice,” meaning that the CFPB cannot refile the cases later, effectively terminating the CFPB’s ability to seek justice and restitution forever and anointing corporate wrongdoers with what amounts to a pardon.

These five dropped cases covered a range of CFPB’s outstanding enforcement efforts, including firms luring customers into debt traps, shady student lending companies, unfair mortgage steering and kickbacks, a bank that hid higher interest rate accounts from its depositors, and pushing unaffordable loans on buyers of manufactured homes. The CFPB’s enforcement efforts have returned $21 billion to 200 million people that were scammed, gouged, or treated unfairly. And people saved untold billions of dollars more from CFPB’s implementation of commonsense rules to protect people from financial abuses. The next day, the CFPB caved on a sixth case against TransUnion. And it dropped a case against the SoloFunds fintech the week before, bringing the litigation capitulation count up to 7 (as of this writing).

1) Caving to Capital One, big bank victory and depositors lose $2 billion: The Vought CFPB dropped a case against Capital One that alleged the bank cheated customers out of $2 billion in lost interest payments on their savings accounts. Capital One had aggressively marketed its 360 Savings account as having some of the best interest rates in the country — a 0.30 percent rate — but failed to tell these customers that it offered  a newer, similar sounding product, the 360 Performance Savings account, that offered interest rates of up to 4.35 percent — over 14 times higher. Capital One prohibited employees from telling 360 Savings accountholders about the higher yield accounts that would have increased their savings. Capital One’s proposed merger with Discover has been hung up in part because of longstanding problems with regulatory and consumer protection compliance — like this dropped CFPB case. 

2) Letting mortgage lenders and real estate industry get away with gouging first time homebuyers: The Trump administration dropped the CFPB case against Rocket Homes, the nation’s biggest mortgage lender, and real estate brokerage firm JMG Holding Partners (the Jason Mitchell Group) for unlawful steering and kickbacks that prevented homebuyers from accessing valuable programs or services not offered by Rocket, such as downpayment assistance worth thousands of dollars. Essentially, Rocket paid the Mitchell Group to only offer Rocket products even if their clients would benefit or get better deals from other lenders or programs. A CFPB investigation found that between 2019 and 2024, Rocket Homes had provided incentives (including $250 gift cards) and referrals to real estate brokerages like JMG Holding Partners, in exchange for the brokers and agents steering their clients toward Rocket Mortgage products and its Amrock closing, title, and escrow affiliate and away from other lenders and servicers. 

Rocket benefitted from getting a pool of essentially captive consumers and the brokers pocketed an incentive fee but the homebuyers lost out because they were unaware that they could have gotten better mortgage deals, lower closing costs, or access to valuable programs offered elsewhere. Homeownership can be an important path to wealthbuilding, but when predators like Rocket rig the game and push higher priced mortgages onto families — 70 percent of the clients were first time homebuyers — it erodes the wealthbuilding effect of homeownership. The Trump administration CFPB folded the case with prejudice which not only lets Rocket off the hook but also encourages other lenders, real estate services firms, and brokerages to pursue cozy deals that generate profits by fleecing their clients.

3) Rewarding a student loan company that unlawfully pursued and collected discharged debts:  The CFPB dropped another case against the student loan servicer Pennsylvania Higher Education Assistance Agency (PHEAA). The CFPB accused PHEAA of illegally pushing student loans back into debt collection although they had already been discharged in bankruptcy court and sending false information to credit bureaus that worsened people’s credit scores. PHEAA unlawfully sicced debt collectors on student borrowers who had legally discharged these debts in bankruptcy, hassling them for debts they no longer had any legal obligation to repay. As Mike Pierce, executive director of the Student Borrower Protection Center noted: ““PHEAA lied to some of the poorest and most vulnerable Americans, then illegally hounded them for debt that they did not owe, all to make a buck. And today, cowardly political sycophants backed down on the federal government’s only effort to hold PHEAA accountable.”

4) Pardoning a predatory lender that pushed borrowers into a cycle of high-priced debt:  The CFPB also dropped a case against predatory lender Heights Finance striking a blow against people living paycheck to paycheck. Heights Finance is a high-cost installment lender with 250 locations across Texas, Oklahoma, Alabama, Georgia, Tennessee and South Carolina that operates under names such as Covington Credit, Southern Finance, and Quick Credit. The typical Heights Finance borrower earns under $25,000 annually, many are older people with fixed incomes or single-parent wage earners. It offered short-term, high-cost loans, but many people ended up taking out an additional loan to repay the first one, trapping them in a treadmill of debt. The CFPB case alleged that the refinance terms, prices, and fees offered by Heights Finance churned borrowers into a never-ending cycle of debt that generated hundreds of millions of dollars in fees and loan charges that generated 40 percent of the company’s revenue. Trump sided with the predatory lender and against the working class people whose pockets got picked by Heights Finance’s unfair, deceptive, and abusive practices. 

5) Freeing a manufactured home lender that trapped borrowers in unaffordable loans: The fifth case the CFPB dropped was against Vanderbilt Mortgage & Finance, the biggest lender for mobile home buyers. The CFPB alleged that the Warren Buffet owned Vanderbilt “knowingly traps people in risky loans just to close the deal on selling a manufactured home” and that Vanderbilt unlawfully originated these loans to people who could not keep up with the payments, were charged late fees, and faced foreclosure. Borrowers had submitted complaints to the agency and the CFPB investigation found that Vanderbilt trapped borrowers in unsustainable loans by manipulating its underwriting to approve loans to families that were already struggling to make ends meet, using unrealistically low estimates for living expenses, and making loans to borrowers it knew could not afford to make payments. Earlier CFPB research had documented that the lower-income and rural manufactured home purchasers paid higher interest rates and had higher barriers to refinance credit than other homeowners. In this case, the Trump CFPB put unscrupulous and unlawful lenders ahead of the families struggling to make ends meet.

The Trump CFPB capitulated on 7 cases last week: Solo Funds, Capital One, Rocket Mortgage, Philadelphia Education Assistance Agency, Heights Finance, Vanderbilt Mortgage, and TransUnion. Seven cases in one week — one a day on average — where the Trump CFPB let corporate scofflaws off the hook and left the victims of predatory finance to fend for themselves. Stay tuned for more craven, crony capitalism that lets corporate wrongdoers get away with unlawful, fraudulent, deceptive, fee-gouging, and unfair practices that put all of us in harm’s way.