The US Consumer Financial Protection Bureau on Thursday dropped a legal action against Capital One, which the agency had accused last month of cheating consumers out of more than $2bn in interest payments on savings accounts.
The dismissal continues Donald Trump’s rapid moves to dismantle the agency, which he has said should be eliminated, but comes the same day as his nominee to head the CFPB, Jonathan McKernan, testified before the Senate in a confirmation hearing.
The action pointed to a broader retrenchment of CFPB enforcement actions under the Trump administration.
The agency earlier on Thursday had already dismissed a lawsuit brought last year against the student loan servicer Pennsylvania Higher Education Assistance Agency (PHEAA) accused of illegally collecting on student loans discharged in bankruptcy, and last week dropped a case against the online lender Solo Funds, which the agency had said deceived borrowers about loan costs.
Representatives for Capital One, PHEAA and the CFPB did not immediately respond to requests for comment.
Since taking office, Trump and his associate Elon Musk have vowed to destroy the CFPB, firing scores of staff, shutting its Washington offices and moving to cancel its lease, while placing virtually all agency workers on temporary leave, actions which employee unions and consumer advocates have challenged in court.
The administration has said in court filings, however, that it intends to operate a more streamlined and efficient CFPB, which Democrats say will be one wholly inadequate to meet the agency’s legal mandates.
In his confirmation testimony on Thursday, McKernan criticized the agency’s past enforcement actions as excessive but said if confirmed he would work to uphold the agency’s legal mandates.
“I’m fully committed to following the law fully and faithfully,” he said.
Article by:Source: Reuters
