Trump nominee to lead agency torches watchdog, claims its past actions 'harmed consumers'
The Consumer Financial Protection Bureau (CFPB) dismissed enforcement actions on Thursday including cases against Rocket Homes, Capital One and Berkshire Hathaway unit Vanderbilt Mortgage & Finance.
The agency said it was dropping the lawsuits amidst a huge cutback that’s seen nearly all work halted and huge layoffs at the key mortgage industry regulator, whose Washington headquarters have also been shuttered.
The suits had originally been filed by Rohit Chopra, the former agency director who was fired less than two weeks after Trump became president. Jonathan McKernan, the former Federal Deposit Insurance Corporation board member, has been nominated by Trump to replace Chopra.
In December, the CFPB sued Rocket Homes, a subsidiary of Rocket Companies, and said it was offering incentives for real estate brokers and agents to steer homebuyers to Rocket Mortgage for loans.
Chopra accused Rocket of engaging in “a kickback scheme that discouraged homebuyers from comparison shopping and getting the best deal” – but on Thursday, the CFPB said it “dismisses this action, with prejudice, against all Defendants.”
Rocket welcomes CFPB decision
A Rocket Homes statement after the dismissal described the suit as an “empty claim brought forth by former CFPB director Chopra for the sole purpose of seeing his name in headlines during the final days in public office.”
Capital One, meanwhile, had faced a January CFPB lawsuit for allegedly “cheating” customers out of over $2 billion in interest payments and misleading consumers about high-interest savings account features.
The same month, Vanderbilt Mortgage & Finance – which is owned by Warren Buffett’s Berkshire Hathaway Inc – was sued over allegations that it had issued home loans deemed unaffordable by a federal regulator.
As the CFPB undergoes significant changes, mortgage brokers call for clearer compensation guidelines. Andrew Russell of RCG Mortgages highlights the need for transparency and consistency in the industry. https://t.co/N1EJvDSGs5
— Mortgage Professional America Magazine (@MPAMagazineUS) February 27, 2025
Chopra said Vanderbilt “knowingly traps people in risky loans in order to close the deal on selling a manufactured home” and said the lawsuit would “protect homebuyers, but also honest lenders helping people to finance the purchase of an affordable home.”
The suit claimed the Vanderbilt had ignored “clear and obvious” red flags that some consumers wouldn’t be able to repay loans according to terms.
But those suits have now been scrapped by the agency on the same day that McKernan, during a Senate hearing on his nomination, criticized the watchdog for having “gotten in the way of it own mission” and politicizing into its work.
McKernan, Warren trade blows at Senate hearing
“It has pushed beyond the limits of its statutory authority,” McKernan said of the CFPB. “It has seized opportunities to expand its jurisdiction and power. It has offended our basic notions of fairness and due process when it has regulated by enforcement.
“And it has harmed consumers through higher prices and reduced choice when it has failed to strike an appropriate balance between costs and benefits in prescribing new regulations.”
But Sen. Elizabeth Warren criticized the agency’s direction under Trump and Elon Musk, whose Department of Government Efficiency (DOGE) has been instrumental in gutting the watchdog. “You’ve been nominated to run this agency where Elon Musk has told everyone to do nothing,” she told McKernan. “It kind of feels like you’ve been lined up to be the number one horse at the glue factory.”
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