Nominee Jonathan McCernan, director of the Consumer Financial Protection Agency, will testify before the Senate Banking Committee at Washington, DC, Kayla Bartkowski/Getty Images/Getty Images North America Hide Caption on Thursday.
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Kayla Bartkowski/Getty Images/Getty Images North America
On Thursday, the Consumer Financial Protection Agency abolished five major lawsuits, including a major lawsuit against Capital 1, but marked a major reversal for institutions that pursued positive action against financial institutions accused of fraud during the Biden administration.
Last month, CFPB accused it of failing to pay customers more than $2 billion in interest by misleading capital to think it would get a higher rate. Capital One denied the fee.
The department also dropped the lawsuit against Rocket Holmes, the Pennsylvania Department of Higher Education Aid, Vanderbilt Mortgages and Finance, and Heights Finance Holden Company.
News of the court’s application that dismissed the CFPB’s legal case came just as the Senate Banking Committee was burning candidates to lead President Trump’s candidate Jonathan McCernan.
The CFPB has faced intense disruption in recent weeks, with agents effectively shutting down after more than 100 workers were fired and staff were told to stop all jobs. Employees were locked out of the department’s DC headquarters and the building’s lease was cancelled.
Earlier this month, people will protest to support Washington, DC’s Consumer Financial Protection Bureau (CFPB) headquarters. Jacquelyn Martin/AP/AP Hide Caption
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Jacquelyn Martin/AP/AP
In Senate testimony, McCernan said the agency is flooded under the Biden administration.
“We have to refocus that on that mission,” said McCernan, who previously was on the FDIC board. “We need to make it right sized, make sure we have an efficient CFPB and restore some kind of accountability to the elected officials.”
Elizabeth Warrensen (D-Mass.), who played a major role in the establishment of the Bureau after the 2008 financial crisis, said at the hearing that she did not believe the timing of the court’s application was accidental, but she did not provide evidence.
“The timing of that announcement seems to be designed to embarrass you and show you exactly who’s in charge of this agency. Elon Musk and his little band of hackers,” she told McCernan.
Sen. Tina Smith (D-Minn.) said he asked McCernan about the pending lawsuit the day before, saying he was “guaranteed” to “consider these cases.”
“This is what’s going on while your nomination is being considered?
“My question is who will be in charge here?” Smith asked McCernan.
“Senator, if I’m confirmed, I’m the director,” he replied.
“CFPB RIP”
The CFPB is currently headed by the representative of Russell Vought, the White House budget director and one of the architects of the Conservative Planning Project 2025.
The Trump administration wants to reveal a light emptying against the bureau and either eliminate the CFPB or significantly reduce the work. Musk tweeted “CFPB RIP.”
Consumer groups have denounced the end of the lawsuit.
“Voters in the last election expressed disappointment at the high prices, but the administration stops essential work to stop corporate abuse from billions of people each year,” said Lauren Sanders, associate director of the National Center for Consumer Law. “The incident dismissed today highlights why CFPB’s work is in fact so essential to investigate the practices of running out of hard-earned money from the pockets of everyday people.”
Prior to joining the FDIC board, McCernan served as a staff member in the Senate, Treasury and Federal Housing and Finance Agency, spending a detailed and brief stint with the CFPB. He previously spent nine years as a lawyer focused on bank and consumer finance laws, according to his prepared testimony. Several business groups have approved the appointment of McCernan.
