Trump’s CFPB scraps nearly 2 dozen orders on redlining, illegal fees

(NewsNation) — The Consumer Financial Protection Bureau nether President Donald Trump has dropped astir 2 twelve consent orders that regulated banks and lenders accused of violations specified arsenic redlining and amerciable overdraft fees.

The orders had targeted companies including Citibank, U.S. Bank and Toyota Motor Credit Corporation. Citibank’s bid addressed alleged favoritism against Armenian-American customers, portion U.S. Bank was cited for reportedly illegally freezing unemployment payment prepaid cards. Toyota Motor Credit Corporation was accused of preventing borrowers from canceling costly indebtedness bundles.  

The consent orders had required companies to compensate affected consumers and instrumentality steps to forestall aboriginal violations.

“This is wholly unprecedented,” Shennan Kavanagh, manager of litigation astatine the National Consumer Law Center, told NewsNation. She said the dismissals screen “a wide scope of long-standing, systemic and highly harmful practices that impacted hard-working families and consumers crossed the country."

Advocates person warned that with the orders dropped, consumers volition person weaker protections against firm wrongdoing successful the future, heightening the hazard of a fiscal crisis. 

A information serviceman works wrong the Consumer Financial Protection Bureau office connected Feb. 10, 2025, successful Washington. (AP Photo/Jacquelyn Martin, File)

Since January, the CFPB has terminated, vacated oregon declined to enforce much than 20 consent orders, according to the Consumer Federation of America, an advocacy radical tracking the terminations.  

Many of the orders were dismissed years earlier they were acceptable to expire and included small to nary mentation astir wherefore the terminations occurred.

The CFPB did not instrumentality a petition for remark from NewsNation. 

Trump’s fund main signals CFPB shutdown

Trump’s fund chief, Russ Vought, who oversees the CFPB, said helium plans to unopen down the bureau wrong the adjacent 2 to 3 months, according to remarks made past period connected the Charlie Kirk Show.

The consent bid terminations look to align with that push, though the medication has argued successful court determination are nary authoritative plans to shutter the agency. 

“People say, ‘consumer fiscal extortion — don’t we privation to support consumers?’ Absolutely. This bureau wasn’t doing it,” Vought said connected the show. “This agency, each they privation to bash is weaponize the tools of fiscal laws against fundamentally tiny ma and popular lenders and different tiny fiscal institutions, and that's what we saw.” 

Acting OMB Director Russel Vought speaks during a property briefing astatine the White House, March 11, 2019, successful Washington. (AP Photo/ Evan Vucci, File)

Vought added that lone a fewer Republican appointees and vocation unit members stay astatine the bureau arsenic it winds down operations.

He antecedently called for abolishing the bureau successful his conception of the blimpish playbook Project 2025. In it, helium says user extortion functions should beryllium returned to banking regulators and the Federal Trade Commission.

The Trump medication faces ineligible challenges implicit whether the agency, which was created by Congress, tin beryllium unopen down. 

Kavanagh’s radical has been progressive successful litigation against the administration, including implicit its efforts to unopen down the CFPB. 

The White House did not instrumentality a petition for comment, citing a deficiency of unit owed to the ongoing authorities shutdown. 

Years of violations, investigations eliminated with the ‘snap of a finger’: Ex-CFPB director 

CFPB consent orders are ineligible agreements voluntarily entered into by the bureau and companies accused of violations. They mostly past 5 years and tin enforce monetary penalties, necessitate reporting oregon cooperation, and mandate steps to forestall aboriginal violations, according to the agency. 

Eric Halperin, erstwhile CFPB manager of enforcement nether the Biden administration, noted that it often takes years from the commencement of an probe to the issuance of an order. 

“It’s an incredibly broad and cautious process, and the determination to bring an enforcement enactment is not 1 that the bureau takes lightly,” helium said.

Halperin, who oversaw each consent orders entered betwixt October 2021 and February 2025, said the aboriginal terminations correspond “cumulatively decades of work” being undone. 

“All of that has been waved distant with a drawback of a finger,” helium said, criticizing the existent CFPB for a deficiency of transparency and mentation for the terminations. 

These companies are present “off the hook and efficaciously pardoned for each their amerciable activity,” helium said, adding that they volition present “never beryllium held accountable.” 

A lawsuit enters a Citibank subdivision successful New York. (AP Photo/Mark Lennihan, File)

Discrimination and overcharging practices named successful consent orders

The CFPB terminated a 2023 consent bid past week that Citibank had been nether for alleged favoritism against Armenian-American customers successful California, 3 years earlier it was acceptable to expire.

The 36-page consent order stated that immoderate Citi employees referred to recognition paper applicants with Armenian names arsenic “Armenian atrocious guys” oregon the “Southern California Armenian Mafia.” 

At the time, Citibank apologized and agreed to participate into an bid to wage millions successful fines and redress, without admitting wrongdoing. 

In a two-page termination order, Vought said Citibank “has fulfilled definite obligations,” including paying $24.5 cardinal successful penalties and implementing measures to forestall aboriginal violations. 

Bloomberg reported that Trump’s lad Eric acceptable up a spot with Citibank to clasp portion of his father’s wealthiness aft Citigroup CEO Jane Fraser reached retired to congratulate the president connected his predetermination triumph successful November.

Attorney Ara Jabagchourian represents Armenian-American victims successful a abstracted class-action suit against Citibank and called the CFPB’s termination “concerning.”

“This is not immoderate tiny assemblage bank. It’s an planetary fiscal instauration that was caught red-handed successful explicit discrimination,” helium said.

Jabagchourian added that the CFPB “was acceptable up to support specifically for instances similar this,” and that ending specified orders “hurts the citizens of this country, peculiarly definite segments of it.”

Citibank did not instrumentality a petition for remark from NewsNation. 

Navy Federal Credit Union

In 2024, the CFPB took action against Navy Federal Credit Union for charging amerciable overdraft fees and issued a consent order that directed the lender to refund much than $80 cardinal to consumers, halt the amerciable fees and wage a $15 cardinal civilian penalty. 

Vought terminated that bid successful July, canceling each unfinished lawsuit refunds and clearing the lender from paying penalties. 

In a statement, Navy Federal defended its usage of overdraft fees and supported the CFPB’s decision, saying “our overdraft programme allows our members to marque necessary, mundane purchases without going into semipermanent indebtedness oregon turning to payday lenders. Navy Federal complied with each applicable laws and regulations astatine the clip and continues to bash so. We firmly judge the CFPB’s determination to terminate the bid was appropriate.”

The CFPB besides ended a 2023 consent order with Toyota Motor Credit Corporation, which had been ordered to wage $60 cardinal implicit allegations the institution illegally funneled thousands of consumers into pricey merchandise bundles that accrued their monthly car indebtedness payments.

Toyota was absolved from paying retired those refunds. Toyota said successful a connection it supported the CFPB's decision. "We volition proceed to heighten our practices to present the champion imaginable lawsuit experiences," the institution said, according to Reuters.

Ending consent orders could harm consumers and law-abiding companies, advocates warn

Consent orders are “essential tools to compensate for nonaccomplishment of money, for mislaid opportunities successful the recognition market, to guarantee that consumers tin bask economical stableness and advancement and not beryllium astatine hazard of unlawful conduct,” Kavanagh said.

Without these safeguards, consumers look a important hazard that wrongdoing tin recur by that aforesaid concern oregon different businesses that are watching and getting the connection that they nary longer request to comply with the law, she said. 

While the bureau acts arsenic a defence for consumers against harmful concern practices, it’s besides important for the industry, she noted. 

“In bid to person just contention successful the marketplace, determination needs to beryllium accountability and transparency and security that atrocious actors and amerciable practices are weeded out,” Kavanagh said.

Risk of different fiscal crisis? 

The CFPB was established by Congress aft the Great Recession to support consumers from abusive fiscal practices, the bureau stated.

Since then, it has recovered much than $21 billion for consumers successful the signifier of monetary compensation, main reductions, canceled debts and different relief.

The lack of the CFPB — oregon a weakened mentation — could pb to “another economical situation that the CFPB was enactment successful spot to avoid," Kavanagh said, adding that without due oversight, conditions volition gravely deteriorate for consumers. 

While authorities attorneys wide and the backstage ineligible assemblage could measurement up, determination volition inactive beryllium a void, she warned. 

Leading up to the 2008 crisis, determination was “willingness to fto Wall Street telephone the shots, and a deficiency of national instrumentality enforcement against large banks and owe lenders that broke the law,” said Halperin, the erstwhile CFPB director. 

“The Trump administration's effort to unopen down the CFPB volition permission america unprepared for the adjacent fiscal crisis, and it volition beryllium Americans and law-abiding companies who are going to wage the terms successful the end," helium said.