Despite this, McKernan informed lawmakers that he would continue taking enforcement actions for consumer protection if confirmed. The agency decided to drop the case against Capital One, which had been accused of unlawfully cheating customers with its “high interest” savings account, resulting in more than $2 billion in unpaid interest. Additionally, the lawsuit against the student loan servicer Pennsylvania Higher Education Assistance Agency (PHEAA) was also dismissed. The PHEAA was accused of wrongfully collecting payments on student loans that had been discharged in bankruptcy.
Last week, the Consumer Financial Protection Bureau (CFPB) dropped a case against Solo Funds, an online lender accused of misleading borrowers about loan costs. Furthermore, cases against Vanderbilt Mortgage & Finance, owned by Berkshire Hathaway, and Rocket Homes were also dropped. Vanderbilt was accused of directing borrowers towards unaffordable mortgages, while Rocket Homes was charged with engaging in illegal kickbacks as part of a mortgage scheme.
During a confirmation hearing in front of the Senate, President Trump’s nominee to lead the CFPB, Jonathan McKernan, testified on Capitol Hill. Representatives for Capital One, Vanderbilt, PHEAA, and the CFPB did not respond immediately to requests for comment. In a statement, Rocket Homes expressed relief that the case against them had been resolved and reiterated their commitment to their mission of helping people find homes.
Since assuming office, Trump and his administration have been focused on reducing the size of the CFPB, leading to the termination of numerous staff members and the closure of its Washington offices. Despite Trump’s intentions, the administration has stated in court documents that it aims to operate a more efficient CFPB. However, Democrats argue that this approach will not be adequate to fulfill the agency’s legal obligations.
As per a legal agreement, the administration has committed not to terminate additional personnel, tamper with data, or defund the agency until the legal proceedings are concluded. During his confirmation testimony, McKernan criticized the agency’s previous enforcement actions as excessive but pledged to uphold the agency’s legal responsibilities if confirmed. “I am fully dedicated to complying with the law in its entirety and faithfully,” he stated.
