CFPB Drops Major Consumer Cases Under Trump/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ Since Trump regained control of the CFPB, several high-profile consumer protection cases, including actions against Capital One and Walmart, have been dropped. Rollbacks reversed penalties and refunds for practices deemed unfair under Biden’s administration. Critics warn the CFPB is becoming toothless, leaving consumers vulnerable.
CFPB Rollbacks Quick Looks
- CFPB under Trump drops consumer lawsuits and penalties
- Navy Federal no longer bound to refund $80M overdraft fees
- Overdraft fee reduction rule overturned by Congress
- Capital One lawsuit over $2B in savings interest dropped
- Walmart, Branch Messenger escape $10M wage deception claims
- Zelle lawsuit over $870M in fraud losses dismissed
- Critics say CFPB’s enforcement has become “toothless”
- Rollbacks spark debates over consumer protection priorities
Deep Look
CFPB Under Trump Drops Major Consumer Protection Cases, Raising Concerns
NEW YORK (AP) — Nearly six months into President Donald Trump’s second term, the Consumer Financial Protection Bureau (CFPB) has pivoted sharply from its previous enforcement posture, dropping or reversing several high-profile cases that sought to protect consumers from deceptive practices by major corporations.
Under new leadership, the CFPB has shifted its focus away from imposing fines and securing restitution for consumers wronged under the Biden administration, instead taking a deregulatory approach more aligned with Republican priorities. The result: multiple companies accused of fraud or deceptive practices are no longer facing legal consequences, and in many instances, consumers may never recover money they were promised.
Here’s a closer look at some significant rollbacks:
Navy Federal Credit Union
The CFPB under Biden’s leadership accused Navy Federal Credit Union (NFCU)—the nation’s largest credit union—of imposing unfair and deceptive overdraft fees on its members, who are predominantly military personnel, veterans, and their families. NFCU initially settled with the bureau, agreeing to refund $80 million in fees to its members.
However, once the Trump administration took control, NFCU filed a motion asking the CFPB to dismiss the consent order. The bureau quietly agreed, offering no public explanation for the reversal. Navy Federal has not stated publicly whether it still intends to refund customers the $80 million.
This rollback is particularly striking given the vulnerability of military families who rely on NFCU for financial services. Consumer advocates fear the reversal signals a weakening of protections for service members.
Reduced Overdraft Fees
One of the CFPB’s more significant regulatory efforts under Biden involved capping overdraft fees at $5, down from an industry average of roughly $27 per transaction. The proposal followed bureau research indicating that the actual cost to banks of covering short-term overdrafts was dramatically lower than the fees charged to customers.
Banks warned that such a move could cost them billions in revenue, although some institutions have voluntarily reduced reliance on overdraft fees in recent years. In April, the Republican-controlled Congress voted to overturn the proposed regulation, ensuring that overdraft charges remain a lucrative revenue stream for many banks.
Capital One
In the final weeks of Biden’s presidency, the CFPB filed a lawsuit against banking giant Capital One, accusing the bank of depriving customers of nearly $2 billion in interest on savings accounts.
At issue was Capital One’s 360 Savings product, marketed as offering some of the highest rates in the country. The CFPB alleged the bank misled customers by failing to disclose the existence of alternative accounts with better rates, potentially leaving customers shortchanged.
Within days of Trump’s CFPB team assuming control, the lawsuit was dropped, effectively ending the bureau’s pursuit of any financial restitution for affected customers. Capital One has denied wrongdoing and declined to comment further on the case’s dismissal.
Walmart and Branch Messenger
Another lawsuit filed in December under Biden targeted retail giant Walmart and workforce technology company Branch Messenger. The CFPB accused both companies of steering Walmart’s delivery drivers into using Branch accounts to access their wages quickly.
While pitched as a convenience, these accounts reportedly carried hidden fees and were marketed deceptively. The CFPB demanded Walmart and Branch pay $10 million in restitution to impacted drivers. Both companies denied wrongdoing.
Shortly after Trump’s team took over, the bureau dropped the case, leaving drivers uncertain whether they will recoup any of the alleged losses.
Zelle
Perhaps the most dramatic rollback involves Zelle, the widely used peer-to-peer payment platform. The CFPB sued Zelle’s parent company and several major banks late last year, alleging they had failed to implement sufficient protections against fraud. According to the CFPB, hundreds of thousands of consumers lost a staggering $870 million due to scams perpetrated through the Zelle platform over seven years.
The lawsuit claimed banks ignored their legal obligations under consumer protection laws, leaving victims with little recourse. Yet in March, the CFPB abruptly dropped the suit, sparking criticism from consumer advocates who say the bureau has abandoned one of its key responsibilities.
Mounting Criticism
Inside the CFPB itself, employees have voiced growing frustration. Some staffers have described the agency as becoming increasingly “toothless,” arguing that its mandate to protect consumers is being sacrificed for political expediency.
Republican lawmakers, meanwhile, continue efforts to slash the bureau’s budget by half, arguing that the agency has historically been too aggressive and stifled legitimate business practices.
Ken Sweet, a financial journalist covering regulatory affairs, noted that the shift is creating uncertainty for consumers and businesses alike. “These rollbacks are sending a message that enforcement may be on pause,” Sweet said. “It raises real questions about whether consumers can rely on the government to stand up for them.”
As the Trump administration’s second term progresses, the CFPB’s future—and the fate of numerous pending cases—hangs in the balance. For consumers harmed by unfair financial practices, the window for justice may be narrowing.
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