The Financial Earthquake: CFPB’s Stunning Move to Drop Major Lawsuits

By Jacqueline Valentine | February 27, 2025 | 11:21 AM EST

In a move that has sent shockwaves through the financial world, the Consumer Financial Protection Bureau (CFPB) under new leadership has suddenly and decisively dismissed a series of high-profile enforcement lawsuits. The cases involved financial heavyweights such as Capital One, Berkshire Hathaway’s Vanderbilt Mortgage & Finance, Rocket Cos.’ Rocket Homes Real Estate, and the Pennsylvania Higher Education Assistance Agency (PHEAA).

The abrupt and unprecedented reversals have left both Wall Street and consumer advocates reeling, raising urgent questions about the future of consumer financial protections under the new administration.

The Shocking Announcement

Just before noon, the CFPB quietly filed voluntary dismissal notices in multiple lawsuits initiated by the previous administration. The legal filings, dry and unassuming in tone, concealed the seismic implications of the decision:

“The Plaintiff, the Consumer Financial Protection Bureau, dismisses with prejudice this action against all Defendants.”

With those simple words, billions of dollars in potential consumer restitution vanished into thin air.

The timing of this decision—mere moments before President Trump’s CFPB nominee Jonathan McKernan faced his Senate confirmation hearing—has only intensified the controversy. As news of the dismissals broke, Senator Elizabeth Warren wasted no time, grilling McKernan on the Senate floor:

“Literally while you’ve been sitting here, we get the news that the CFPB is dropping lawsuits against companies accused of cheating American families. It seems to me the timing of that announcement is designed to embarrass you.”

But for the financial titans at the center of the lawsuits, the dismissals were cause for celebration. Capital One, which had been accused of misleading consumers and pocketing $2 billion in ill-gotten interest, immediately praised the CFPB’s decision. A company spokesperson stated:

“We welcome the CFPB’s decision to dismiss this action, which we strongly disputed from the beginning.”

Rocket Homes, accused of paying illegal kickbacks to real estate agents, also released a triumphant statement, claiming its practices had always been above board.

A Dramatic Shift in Power

Since taking office, President Trump has made no secret of his intention to dismantle the CFPB, an agency he has long derided as unnecessary government overreach. The installation of acting Director Russell Vought and the involvement of Elon Musk’s Department of Government Efficiency have accelerated this agenda at breakneck speed.

Within weeks:

• The CFPB’s Washington headquarters was shuttered.

• Nearly 200 employees were fired.

• The agency’s work was largely suspended.

• Lawsuits that had been years in the making were thrown out overnight.

Consumer advocates and former CFPB officials have called the latest dismissals an unprecedented rollback of financial oversight. Eric Halperin, the CFPB’s former head of enforcement, expressed disbelief:

“Five cases have been dismissed so far by this administration, whereas in the entire history of the bureau, only one other case has been dismissed without relief for consumers.”

“Just from today’s dismissals alone, billions of dollars in consumer harm will never be recovered,” Halperin added.

Financial Markets React

In the immediate aftermath of the announcement, Capital One and Rocket Cos. saw their stock prices surge, with investors cheering what they perceived as a loosening of regulatory constraints. Meanwhile, consumer advocacy groups condemned the decision as a betrayal of the agency’s mission.

As the dust settles, one thing is clear: the CFPB as we knew it is gone. Whether this marks the beginning of a more efficient financial landscape or a free-for-all for predatory practices remains to be seen. But for millions of American consumers, today’s news could mean the end of critical financial protections they once took for granted.

Stay tuned—this financial thriller is far from over.