The Consumer Financial Protection Bureau (CFPB) has dropped at least four enforcement lawsuits, including cases against a division of Rocket Mortgage and one of the nation’s largest manufactured home lenders.
The CFPB dismissed with prejudice cases against Rocket Homes Real Estate, Vanderbilt Mortgage & Finance, Capital One and the Pennsylvania Higher Education Assistance Agency, according to multiple national news reports Wednesday.
The moves reverse actions taken in the waning days of the Biden Administration under then Director Rohit Chopra, who was fired by President Donald Trump on Feb. 1.
Jonathan McKernan, a former member of the FDIC board, has been nominated by President Trump to be the permanent director.
In testimony on Wednesday before the Senate committee on Banking, Housing, and Urban Affairs, McKernan said the CFPB has “gotten in the way of its own mission.”
“It has acted in a politicized manner,” McKernan said. “It has pushed beyond the limits of its statutory authority. 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.”
He further said consumers have been harmed by “higher prices and reduced choice.”
“Even if you don’t agree with that view, it’s clear that the CFPB suffers from a crisis of legitimacy,” McKernan said.
The CFPB took several actions after Trump’s victory. The Bureau filed suit against Rocket Homes, a sister company of mortgage giant Rocket Mortgage, in late December, alleging that the company gave incentives to real estate brokers and agents in exchange “for steering homebuyers to Rocket Mortgage.”
“Rocket Homes pressured real estate brokers and agents not to share valuable information with their clients concerning products not offered by Rocket Mortgage, such as the availability of down payment assistance programs, which often save homebuyers thousands of dollars,” the CFPB alleged.
In early January, CFPB also filed suit against Berkshire Hathaway-owned manufactured home lender Vanderbilt Mortgage & Finance, alleging that the company set borrowers up to fail.
Vanderbilt, a division of manufactured home builder Clayton Homes, failed to “document and verify borrowers’ before making a mortgage,” which contributed directly to the 2008 foreclosure crisis, the CFPB alleged.
Vanderbilt and Rocket both vigorously denied the claims.
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