In a Senate confirmation hearing, Massachusetts Sen. Elizabeth Warren suggested that the CFPB’s decision to dismiss the lawsuits after McKernan’s nomination was not coincidental.
The Consumer Financial Protection Bureau has dropped more than five major lawsuits, including a longstanding claim against Capital One.
According to National Public Radio, the Bureau had, as recently as last month, accused Capital One of failing to pay more than $2 billion in interest to customers by making it appear as if they would receive better rates.
The CFPB also dropped lawsuits against Rocket Homes, the Pennsylvania Higher Education Assistance Agency, Vanderbilt Mortgage and Finance, and the Heights Finance Holding Company.
Although the Bureau’s decision to abandon claims represents an abrupt about-face, it shouldn’t come as much of a surprise: since taking the White House in January, President Donald Trump has thrust the agency into turmoil, ordering mass terminations and shutting down its headquarters in Washington, DC.
President Trump’s nominee to head the CFPB, Jonathon McKernan, recently told senators that the agency had “overreached” under the Biden administration.
“We’ve got to refocus it on its mission,” McKernan said. “We need to right-size it, make sure that we have an efficient CFPB, and we need to reinstate some accountability to our elected officials.”
In a Senate confirmation hearing, Massachusetts Sen. Elizabeth Warren suggested that the CFPB’s decision to dismiss the lawsuits after McKernan’s nomination was not coincidental.
“It seems to me the timing of that announcement is designed to embarrass you and tot show exactly who is in charge of this agency right now: Elon Musk, and his little band of hackers,” Warren told McKernan.
Another Democratic lawmaker, Sen. Tina Smith of Minnesota, said that McKernan had already “assured” her that he would “review these lawsuits.”
“This makes me question, like, who’s really going to be in charge of the CFPB if this is what’s happening while your nomination is being considered?” Smith said. “My question is, who’s going to be in charge here?”
“Senator, if I’m confirmed, I’m the director,” McKernan said.
Some consumer advocates have already shared concerns that the premature end to the CFPB’s lawsuits could foreshadow acquiescence.
“Voters in the last election expressed their dismay with high prices, yet the Administration is stopping the essential work to stop corporate abuses that take billions from people every year,” the National Consumer Law Center told NPR. “The cases dismissed today actually underscore why the CFPB’s hard work is so essential to investigate practices that are draining hard-earned money from the pockets of everyday people.”
Sources
Capital One, National Association, and Capital One Financial Corporation
The CFPB drops its lawsuit against Capital One, marking a major reversal
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