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The Consumer Financial Protection Bureau (CFPB) has dropped its lawsuit against Capital One. The case, filed in 2017, claimed the bank kept customers from earning over $2 billion in interest. The agency said Capital One held rates low on an old savings account while offering a new one with higher interest. Customers were not informed about the better option, according to the lawsuit.
A court filing from February 27 showed that the CFPB chose to dismiss the case. This is coming two weeks after the Trump administration shut down the agency’s headquarters. Most of the agency’s work was put on hold during this time. The decision to drop the case was not explained in detail in the filing.
Capital One Expresses Relief As CFPB Drops Lawsuit
Capital One responded to the news by defending its position. A company spokesperson said the bank had always disagreed with the lawsuit. The spokesperson stated that customers were treated fairly and had access to clear information. The company welcomed the CFPB’s decision to end the case.
Meanwhile, Jonathan McKernan, a former Federal Deposit Insurance Corporation board member, spoke at a Senate hearing. He is President Trump’s choice to lead the CFPB. The administration has plans to keep the agency but reduce its responsibilities. A court filing on February 24 revealed this plan.
On the same day, the CFPB also dropped lawsuits against Rocket Homes and Vanderbilt Mortgage and Finance. These cases were filed under former director Rohit Chopra. President Trump removed Chopra from his role two weeks after taking office. The decision to drop these lawsuits followed the same pattern as the Capital One case.
The CFPB was created in 2011 to protect consumers in the financial sector. The agency was formed under the Dodd-Frank Act after the 2008 financial crisis. Since then, it has taken action against banks for unfair fees and other harmful practices. Some of its most well-known cases involved large financial penalties.
The CFPB Files Lawsuit Against Several Top Firms
Last year, the CFPB filed a lawsuit against Bank of America, Wells Fargo, Chase, and Early Warning Services. The case claimed the banks failed to prevent fraud on the Zelle payment network. Customers lost hundreds of millions of dollars due to scams, according to the CFPB. The case gained attention because of the large amounts involved.
The CFPB also took action against the Navy Federal Credit Union last year. The agency ordered the company to pay $95 million in refunds and fines. The penalties were related to overdraft fees that the CFPB said were unfair. Customers were charged fees in ways that were not clearly explained.
Three years ago, the CFPB fined Wells Fargo $3.7 billion for unfair fees and interest charges. The penalties were linked to auto loans, mortgages, and overdraft fees. This was one of the largest financial penalties the agency had ever issued. Wells Fargo said it had worked to improve its practices.
The regulator’s future remains uncertain as the Trump administration changes how it operates. Some experts say the agency’s role could shrink under new leadership. Others believe it will continue to monitor financial institutions. The decision to drop multiple lawsuits shows how the agency’s approach is shifting.
