The lawsuit alleged that the bank misled customers about savings account options, resulting in financial losses totalling USD 2 billion. In a brief court filing, the agency stated its intent to voluntarily drop the case with prejudice, meaning it cannot be refiled. The CFPB did not immediately provide a comment on the decision.
Capital One responded to the development in a statement, noting that it welcomed the CFPB’s decision and had strongly disputed the allegations.
The lawsuit, initiated in January under the leadership of then-CFPB Director Rohit Chopra, claimed that Capital One had caused confusion by offering two similarly named savings accounts while failing to inform customers that one offered significantly higher interest rates. At the time, Chopra stated that the bank had misled consumers, costing them substantial sums in lost interest earnings.
Capital One had denied the claims, previously criticizing the CFPB’s legal action as an eleventh-hour move ahead of an administration change. The bank expressed its intention to contest the allegations in court.
The dismissal of the case is part of a wider shift in CFPB actions under the Trump administration. Earlier, the agency withdrew a separate lawsuit against a student loan servicer accused of collecting payments on loans discharged in bankruptcy. Furthermore, the CFPB dropped a case against an online lender it had accused of misleading borrowers about loan costs.
Meanwhile, Trump’s nominee to lead the CFPB, told a Senate committee that he believed the agency had overstepped its authority in recent actions. He suggested that, if the bureau remains in operation, it should adopt a more limited and accountable approach.
The new nomination comes as some Trump administration officials call for the dismantling of the CFPB. Earlier this month, Office of Management and Budget head Russell Vought directed a suspension of agency activities, while Elon Musk, leading the Department of Government Efficiency, has expressed a desire to eliminate the bureau entirely.
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