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russell vought
'Alarming': Trump CFPB Drops Cases Against Companies Accused of Cheating Consumers
"This sends a dangerous message to corporate America that financial fraud and abuse will go unchecked," said one critic.
Feb 27, 2025
Consumer advocates on Thursday slammed the Trump administration for dropping various enforcement actions against companies accused of activities that include ripping off savings account holders, illegally collecting on student loans, and engaging in an unlawful mortgage broker kickback scheme.
The Consumer Financial Protection Bureau's notices of voluntary dismissal came as the U.S. Senate Committee on Banking, Housing, and Urban Affairs held a hearing for Jonathan McKernan, President Donald Trump's pick to lead the CFPB—which Accountable.US executive director Tony Carrk has called "a gift to big banks and special interests."
"We're getting a very strong message here that if you're a bank, if you're a student loan servicer, and you're violating the law, the CFPB is not only not going to pursue you, they're going to let you out of your case scot-free."
While the former Federal Deposit Insurance Corporation board member awaits confirmation from the GOP-controlled Senate, Trump and Russell Vought, the CFPB's temporary leader, have wasted no time trying to gut the agency and undo the work of its former director, Rohit Chopra, who oversaw cases against the following companies:
- Capital One, accused of cheating millions of banking customers out of more than $2 billion in interest;
- Heights Finance, accused of loan-churning practices that harvested hundreds of millions of dollars in costs and fees;
- Pennsylvania Higher Education Assistance Agency (PHEAA), accused of collecting on student loans discharged in bankruptcy and sending false information to credit reporting companies;
- Rocket Homes, accused of providing incentives to real estate agents and brokers who steered homebuyers toward its loans; and
- Vanderbilt Mortgage & Finance, accused of trapping people in risky loans for manufactured homes.
Court paperwork "in the Rocket Homes case notes that the 'Consumer Financial Protection Bureau dismisses this action, with prejudice, against all defendants,'" according toThe Associated Press. "Dismissing a case without prejudice means that it cannot be refiled. Similar wording was used in the dismissals of the CFPB's Capital One and Vanderbilt Mortgage suits."
Those decisions came after the CFPB last week
dropped a case against SoLo Funds, which the agency accused of misleading borrowers about loan costs. Vought had then teased further action, saying on social media Sunday that "shockingly, the CFPB tried to destroy this company, SoLo, which incurred millions in legal fees and had to lay off 30% of its workforce. It was wrong and we dismissed the case. More to come but the weaponization of 'consumer protection' must end."
Meanwhile, critics like Christine Chen Zinner, consumer policy counsel at Americans for Financial Reform, are framing the CFPB's dismissals as a betrayal of the agency's mission.
"The old CFPB stood ready to protect consumers and wrestle back the ill-gotten gains of big banks like Capital One," Chen Zinner said Thursday. "With this decision, the Trump-appointed leadership is letting Capital One steal $2 billion from its depositors, another example of this administration standing up for Wall Street at the expense of everyday people who deserve the CFPB's protection."
Erin Witte, director of consumer protection at the Consumer Federation of America, also released a statement focused on the bank case.
"The CFPB was created to be a watchdog for big banks, not a lapdog, and dismissing this case is a gift to Capital One," said Witte. "$2 billion is a drop in the bucket for Capital One–less than half a percent of its total assets—but returning this money would make a huge difference to the hardworking Americans who trusted Capital One to safeguard their savings and were kept in the dark about how to earn more."
Witte also described the full list of dismissals as "unprecedented," and toldReuters, "We're getting a very strong message here that if you're a bank, if you're a student loan servicer, and you're violating the law, the CFPB is not only not going to pursue you, they're going to let you out of your case scot-free."
Accountable.US highlighted that "the news stands in stark and alarming contrast to McKernan's remarks... to senators, promising to review all existing CFPB lawsuits before making any decisions around dropping litigation."
Student Borrower Protection Center executive director Mike Pierce said in a statement about the PHEAA case that "Russ Vought and Donald Trump sided with a lawless and corrupt student loan company at the expense of borrowers across the country—another sign that powerful financial interests are driving the capture and demolition of the federal consumer watchdog."
"This is a slap in the face to students, student loan borrowers, and working people everywhere," Pierce continued. "PHEAA lied to some of the poorest and most vulnerable Americans, then illegally hounded them for debt that they did not owe, all to make a buck. And today, cowardly political sycophants backed down on the federal government’s only effort to hold PHEAA accountable."
"Of course, like all fascist toadies, Russ Vought will rightly be forgotten by history and sink into well-deserved irrelevance. But until then, law enforcement at every level of government must rush in to fill the void left by a federal consumer protection agency that now stands only to serve billionaires and big corporations," he added. "Remember: these people prey on those in need because they are motivated only by the desire to exercise power, and they are motivated to do so because they are cowards. It is everyone's job to remind Vought and his cronies of their powers' limits, and to remind the world of their cowardice."
Lauren Saunders, associate director of the National Consumer Law Center, also directed some blame at billionaire Elon Musk, the head of Trump's so-called Department of Government Efficiency, which is leading the administration's efforts to slash the federal workforce and spending.
"The Trump administration and Elon Musk are showing us exactly what it means not to have ordinary people protected by a strong Consumer Financial Protection Bureau—they are dismissing enforcement cases that sought to return billions to working families harmed by corporations accused of egregious conduct that violated the law," said Saunders. "On top of the stop-work order and firing of CFPB workers doing their jobs, this sends a dangerous message to corporate America that financial fraud and abuse will go unchecked. We must preserve a strong, independent, and functional CFPB to stand up to corporate bullies."
Sen. Elizabeth Warren (D-Mass.), a former bankruptcy professor, is the mastermind behind the CFPB. She is also the ranking member of the panel which McKernan appeared before on Thursday. The American Prospect executive editor David Dayen reported that the senator informed the nominee about the dismissals during the hearing.
"Literally while you've been sitting here and you've been talking about the importance of following the law, we get the news that the CFPB is dropping lawsuits against companies that are cheating American families, or alleged to be cheating American families," Warren said. "It seems to me the timing of that announcement is designed to embarrass you and to show exactly who is in charge of this agency right now: Elon Musk and his little band of hackers."
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Dire Warnings as Trump Orders Mass Firing Plans Across Federal Agencies
"This order is the equivalent of putting on a blindfold and smashing everything, without knowing what you're destroying or how many people it hurts," said one journalist.
Feb 26, 2025
U.S. President Donald Trump escalated his wholesale assault on the federal government and its workforce on Wednesday by ordering agencies to submit plans for mass firings by March 13 as the destructive impacts of the new administration's onslaught ripple across the country.
The president's order came in the form of a memo from the Office of Management and Budget (OMB)—headed by Project 2025 architect Russell Vought—and the Office of Personnel Management, an agency overtaken by lieutenants of billionaire Elon Musk.
Citing Trump's call for "large-scale reductions in force" across the federal government, the memo states that agencies "should focus on the maximum elimination of functions that are not statutorily mandated while driving the highest-quality, most efficient delivery of their statutorily-required functions."
"Agencies should also seek to consolidate areas of the agency organization chart that are duplicative; consolidate management layers where unnecessary layers exist; seek reductions in components and positions that are non-critical; implement technological solutions that automate routine tasks while enabling staff to focus on higher-value activities; close and/or consolidate regional field offices to the extent consistent with efficient service delivery; and maximally reduce the use of outside consultants and contractors," the memo adds.
HuffPost reporter Jennifer Bendery characterized the new memo as consistent with the wrecking-ball approach that Trump and Musk have taken over the past month as they've moved aggressively to eviscerate federal departments and funding, running roughshod over the law in the process.
"This order is the equivalent of putting on a blindfold and smashing everything, without knowing what you're destroying or how many people it hurts," Bendery wrote on social media.
Kevin Owen, an employment lawyer who represents federal workers, toldThe Associated Press that the latest memo from OMB and OPM "looks like a plan for a significant and shocking reduction of the federal workforce that I don't think the American people are prepared for."
"It's going to cripple a lot of government functions," Owen warned.
"Musk is failing up in this administration because he didn't earn his job, he bought it. It's corrupt, and risks Americans' health and safety."
The order came as communities across the country grappled with the consequences of the Trump administration's mass terminations of federal workers and illegal withholding of funds approved by Congress, which is now in the grip of a GOP that has proven subservient to the president.
The federal government is the single-largest employer in the United States, and Trump and Musk's effort to gut entire departments could have far-reaching and devastating economic impacts.
The Washington Postreported earlier this month that "the Trump administration's move to fire thousands of federal employees could have a swift and severe impact on public services... making it harder for veterans to get mental healthcare and hampering electric service to some rural residents as a beleaguered workforce struggles to cover for lost colleagues."
"In an Energy Department subagency that helps provide power, staff who handled homeowners' electricity bills were fired, employees said, potentially leaving no one to take the money that keeps their lights on," the newspaper added. "In one state, all but two of the employees who helmed an Agriculture Department program assisting poor rural communities were fired. And in a tiny Wyoming town, a Forest Service office that has spent decades providing support to hikers, Christmas tree permits to residents, and firewood for the elderly has been forced to shutter, a staffer said."
In some cases, the Trump administration has rushed to rescind terminations after employees responsible for food safety reviews, the federal bird flu response, and nuclear security were caught up in the mass firings—accidentally, the administration claims. Some federal employees have been reinstated by court order.
During the first Cabinet meeting of the second Trump administration on Wednesday, Musk—who is not a Cabinet official—admitted that his so-called Department of Government Efficiency "accidentally" canceled Ebola prevention efforts as it worked to dismantle the U.S. Agency for International Development (USAID).
Rep. Don Beyer (D-Va.), who represents many federal workers, wrote in response that "an average person who did something as incompetent as 'accidentally canceling Ebola prevention' wouldn't be applauded, they'd be fired."
"Musk is failing up in this administration because he didn't earn his job, he bought it," Beyer added. "It's corrupt, and risks Americans' health and safety."
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Internal Watchdog Ruling Indicates DOGE Mass Public Worker Firings 'Unlawful'
"Trump's only plan here seems to be to inflict chaos and suffering on the American people and the federal workers who serve them," said one critic.
Feb 24, 2025
The U.S. Office of Special Counsel—the independent agency that protects government whistleblowers—has deemed "at least some" of the Trump administration's mass firing of civil servants in their probationary periods to be illegal and recommended halting their termination, according to reporting Monday.
Government Executive senior correspondent Eric Katz reported that the Office of Special Counsel (OSC), which investigates unlawful actions against federal employees and prosecutes misconduct, issued a decision on the firings of six such workers at different agencies. The terminations are part of a mass purge of federal workers by Elon Musk's Department of Government Efficiency's (DOGE).
"In accordance with its legal responsibility to safeguard the merit system, OSC seeks this stay because the probationary terminations at issue in this matter appear to have been effectuated in a manner inconsistent with federal personnel laws," the agency said.
1/2 An important victory for federal probationary workers. This one not in the courts. Office of Special Counsel: "The probationary terminations at issue in this matter appear to have been effectuated in a manner inconsistent with federal personnel laws."
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— Ryan Goodman ( @rgoodlaw.bsky.social) February 24, 2025 at 11:21 AM
The request to block the workers' termination and reinstate them came in a class-wide complaint filed by the advocacy group Democracy Forward and Alden Law Group on behalf of the civil servants, who according to the filing were fired "with no regard for the performance or conduct," but rather due to their probationary status.
"While the decision was technically limited in scope, it could have immediate impact on all terminated staff at those six agencies and could set a wide-ranging precedent across government," Katz wrote. "It has not been made public and was provided to Government Executive by a source within the government. OSC, which did not provide the document to Government Executive, verified its authenticity."
U.S. Special Counsel Hamilton Dellinger—whose recent termination by Trump was temporarily blocked last week by the Supreme Court—said in a statement Monday that "firing probationary employees without individualized cause appears contrary to a reasonable reading of the law, particularly the provisions establishing rules for reductions in force."
Democracy Forward president and CEO Skye Perryman said Monday that "today's news from the Office of Special Counsel confirms what we have long known: The mass termination of federal workers is unlawful, and Trump's only plan here seems to be to inflict chaos and suffering on the American people and the federal workers who serve them, as opposed to using our government to better the lives of working Americans, families, and communities across the country."
Some observers have said the specter of termination is a deliberate tactic to instill fear in federal civil servants, upon whom Office of Management and Budget Director Russell Vought said he wishes to inflict "trauma."
The fate of the six federal workers will be decided by the Merit Systems Protection Board (MSPB), an independent quasi-judicial federal agency tasked with reviewing the Office of Personnel Management (OPM), control of which was reportedly seized by DOGE last month.
U.S. District Judge Rudolph Contreras last week invalidated Trump's likely unlawful bid to fire Democratic MSPB Chairwoman Cathy Harris.
Responding to Monday's OSC decision, Alden Law Group partner Michelle Bercovici said that "the administration's mass termination of employees in their first or second year on the job is an unprecedented and grossly unfair circumvention of the merit principles upon which our civil service is based."
"These hardworking employees should have the opportunity to let their work speak for itself," Bercovici added.
Rob Shriver, managing director of Democracy Forward's Civil Service Strong program and a former acting OPM director, said Monday: "It's common sense that if you want to remove someone for poor performance, you actually have to look at that person's performance in the job. And if they looked, they'd see the value that these workers bring."
"The mass terminations of probationary employees are flatly illegal and we urge the MSPB to move swiftly to implement this recommendation," Shriver added.
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