The Consumer Financial Protection Bureau (CFPB) on Thursday dismissed its Biden-era lawsuit against Capital One that alleged the bank had cheated customers out of more than $2 billion in savings account interest.
What has happened?
Ten days before President Trump was inaugurated, the watchdog agency filed the lawsuit, claiming Capital One misled customers when it held rates low on its 360 Savings account, while it introduced a higher-yielding 360 Performance Savings account — and didn’t inform holders of the old account about the new product.
A court filing dated Feb. 27 stated the agency was voluntarily dismissing the suit. This comes two weeks after the Trump administration shuttered CFPB headquarters and halted nearly all of its work.
“We welcome the CFPB’s decision to dismiss this action, which we strongly disputed,” a Capital One spokesperson said in a statement.
Meanwhile, former Federal Deposit Insurance Corp. (FDIC) board member Jonathan McKernan, Trump’s pick to head the CFPB on a permanent basis, testified at his Senate confirmation hearing on Thursday. The Trump administration plans to keep the CFPB operating, albeit in a streamlined form, according to a federal court motion filed Feb. 24.
CFPB drops additional lawsuits
On Thursday, the CFPB also dropped lawsuits it had brought against Rocket Homes and Vanderbilt Mortgage and Finance, according to an Associated Press report. These suits, as well as the one against Capital One, were filed under the CFPB’s previous director, Rohit Chopra, who was fired by Trump two weeks after Inauguration Day.
Created under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB began operating in 2011 as an independent government agency responsible for consumer protection in the financial sector. The agency has fined banks for actions such as creating bank accounts for customers without their knowledge, and for charging checking account overdraft fees it has deemed excessive. Notable CFPB actions include:
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