CFPB Under New Administration Drops Numerous Pending Lawsuits

The CFPB has recently dropped a number of pending enforcement lawsuits, which may provide insight into the types of cases the CFPB will pursue or decline to pursue under the new administration.

Under the authority of its new acting Director, the CFPB voluntarily dismissed—usually with prejudice—various ongoing civil cases which were filed prior to the new administration taking office.  The dismissed cases include:

• A RESPA action against a real estate brokerage which allegedly referred consumers to other real estate agents in exchange for those agents referring customers back to the brokerage’s affiliated mortgage lender;

• An action against a company which financed loans for manufactured homes for allegedly failing to conduct realistic, good faith analyses of whether borrowers had the ability to repay their loans;

• A suit against a short-term personal loan provider which allegedly offered loans that consumers could not realistically repay and then manipulated the consumers into repeatedly refinancing the loans at significant additional cost;

• An action against a consumer reporting agency for violating a prior CFPB consent order, including by allegedly using deceptive marketing about the true costs and terms for various credit report, credit score, and credit monitoring programs;

• A suit against several large, national banks and a peer-to-peer digital payment service alleging that they failed to implement sufficient measures to prevent or monitor for fraud, failed to appropriately respond to customer complaints about fraudulent transactions, and did not take action against individual or accounts known or suspected to be involved in fraudulent activities; and

• A suit against a large national bank over alleged failures to inform customers who signed-up for accounts which were advertised as “high-interest” savings accounts after the bank later released new savings account products which offered supposedly better interest rates.

Separately, the CFPB expressly informed at least one court that it intended to continue with a pending enforcement action.  That case involved claims that a lender allegedly failed to comply with statutory protections applicable to borrowers who are active-duty military servicemembers.  Likewise, after missing several deadlines in another case involving an alleged debt relief scam, the CFPB ultimately indicated to the court that it would continue to prosecute the action.