The CFPB’s 2021-2025 Enforcement Legacy

The story of the failings that led to the 2008 Financial Crisis and the creation of the Consumer Financial Protection Bureau is a familiar one. With the nation still reeling from the loss of trillions of dollars of wealth, Congress established the CFPB with a specific mandate: to enforce federal consumer financial law and ensure that consumer financial products are fair, transparent, and competitive. This new federal agency was intended to fill the gaping holes left by other regulators, use new tools to forestall another crisis, and focus on protecting individuals rather than sheltering banks and financial institutions. The American public was incensed by the audacity of massive banks that were "too big to fail," the impunity of Wall Street CEO's who were not prosecuted as criminals, and the crushing realization that families did not have an effective regulator willing fight back against products that were designed to fail. The Dodd-Frank Wall Street Reform Act was passed to rectify these inadequacies and restore confidence in our financial system.

Over a decade later, and in the wake of another worldwide economic crisis, the CFPB's enforcement agenda during Director Rohit Chopra's tenure signaled a return to its original mission to foster fair dealing in the marketplace and a determination to avoid our nation's past mistakes. The Bureau has dedicated itself to leveling the playing field for consumers by taking on multi-billion dollar industries, calling out corporate recidivists, and confronting emerging threats. Notably, the CFPB took these bold steps during a global pandemic and while facing (and winning) a challenge to the constitutionality of its very independent existence. Remarkably, despite these obstacles, the CFPB still managed to put over $6 billion back into the pockets of Americans over the last four years. These successes have resulted in some of the most significant cases in the Bureau's history and they are worth celebrating.

Too Big to Ignore

A key piece of the CFPB's enforcement legacy during the last four years will be marked by its willingness to confront illegal behavior by the nation's largest and most predatory financial institutions-itself a legacy of the "too big to fail" banks during the 2008 Financial Crisis. For decades, Americans did not stand a chance against massive corporations that had developed an immunity to fines due to lax enforcement. In 2022, the CFPB took on Wells Fargo, one of the country's largest banks, for its epic account handling failures that affected over 11 million accounts. Wells Fargo's repeated misconduct caused consumers to lose their homes, their cars, and even access to their own money. The CFPB took the bank to task, ordering it to pay over $3.7 billion in redress and penalties-the largest fine ever imposed by the agency. The CFPB also took action against the massive Regions Bank in 2022 for imposing over $140 million in junk overdraft fees, and in 2023 it ordered repeat offender Bank of America to pay over $100 million back to its customers for its "double-dipping" scheme of charging nonsufficient funds fees multiple times for the same transaction and other violations.

In its final week of the current administration, the Bureau slammed Capital One, a banking behemoth with over $480 billion in assets, with a lawsuit. The Bureau alleges that the bank steered its customers away from earning more interest in better-paying accounts, ultimately costing them more than $2 billion. The Bureau also shut down Navient, the country's largest private student loan servicer, in 2024, after years of abusing students (particularly disabled veterans) and profiting from its exploitation of the massive, multi-trillion-dollar federal student loan system. The CFPB has confronted some of the most dominant players in the financial sector to send a clear message that these practices are too big to ignore.

Repeat Offenders

Designating financial institutions with a demonstrated history of violating the law and ignoring court orders as "repeat offenders" helped reshape the narrative around corporate misconduct. Americans were rightfully outraged at the notion of exonerating CEOs and corporations who designed risky products to generate substantial profits while (and sometimes because) people lost their homes. The Bureau's focus on repeat offenders was squarely designed to remind the financial sector that violating court orders are no longer simply the cost of doing business. For example, the Bureau pursued repeat offender Fifth Third Bank for repeatedly charging worthless fees on auto loans, leading to delinquency and repossessions. That lawsuit followed multiple CFPB actions in 2015 for Fifth Third's discriminatory auto lending conduct and illegal credit card practices. The CFPB also ensured that Freedom Mortgage was held accountable for ongoing violations of law in 2019, 2023, and 2024 for submitting error-riddled mortgage data to federal regulators.

Also, the CFPB branded Title Max, one of the nation's largest car title lenders, as a repeat offender in 2023 when it violated a 2016 order outlining its deceptions about the cost of their loans and intimidating debt collection practice of "field visits" to borrowers' homes. Title Max continued its course of misconduct by overcharging servicemember borrowers, prompting the 2023 action. Director Chopra further made clear that "CFPB orders are not suggestions" in the Bureau's 2023 action against debt collector giant Portfolio Recovery Associates when it violated a 2015 order. Throughout its long-term relationship with PRA, the CFPB uncovered a litany of ongoing misconduct related to persistently collecting bad debt and coercing payments by using threats of legal action. Reining in repeat offenders is a "long game," and the CFPB has set the wheels in motion to ensure that we do not return to the days of letting incessant illegal conduct slip through the cracks.

Eyes on the Guise of Innovation

In giving the Bureau broad enforcement authority, Congress signaled it wanted us to learn from the past failings of our financial system, where regulators were asleep at the wheel about "innovative" products. In the last four years, the CFPB's enforcement strategy has taken a hard look at emerging risks - most notably the invasion of big technology into financial services. The Bureau's enforcement actions confirm that widespread concerns are not hyperbolic, and they underscore how critical it is to have a cop on the beat. Tech giant Apple's expansion into financial services resulted in an $89 million settlement with the Bureau based on its failure to responsibly handle basic services for its customers, like resolving disputes, handling refunds, and being forthright about financing options. The CFPB's lawsuit against Walmart alleges that it forced its delivery drivers to get paid through a fintech company via a digital app. Walmart opened accounts with employees' social security numbers without their consent, and the Bureau also alleges that the third-party fintech harvested over $10 million in junk fees and lied about "instant access" to wages.

Perhaps one of the most tangible examples of how technology has invaded our financial lives is in payment services. Digital apps may make it easier to split a bill with friends, but that convenience is significantly outweighed by the exploitative potential of these apps by fraudsters and the failure of the nonbank providers to protect their customers' funds. The CFPB's action against Zelle, for instance, alleges that consumers lost over $870 million as a result of banks' frantic rush to enter the payment services market and compete with Venmo and CashApp. That led to massive fraud without any plan in place to help the victims, all while Zelle and its big bank backers slurped up tremendous volumes of account holders' personal data. Just yesterday, the Bureau also announced a $175 million settlement with CashApp's operator for similarly failing to resolve basic disputes and leaving its customers open to criminal fraudsters with devastating consequences. The CFPB's enforcement actions have shed light on an extremely opaque industry and opened our eyes to the massive losses by consumers and unwillingness of the payments systems to rectify the harm. More broadly, this is indicative of the important role the Bureau plays in watching the road ahead instead of putting on blinders when confronted with innovative products.

Designed to Fight Back

Finally, the CFPB's enforcement under Director Chopra's leadership brought numerous actions to fight back for those who cannot fight for themselves by using their authority to address abusive conduct. The imbalance of power in consumers' relationships with their financial providers cannot be overstated. Firms hide tricks and traps in their fine print, monopolistic practices squeeze out entrepreneurs and limit consumers' choices, and sophisticated technology can manipulate our behavior in ways we are often unaware of. Finance is complicated for the everyday American, and we expect companies to be honest about their offerings in transactions. It is particularly offensive when corporations exploit their outsized power to obscure key information and design products to take advantage of their customers, all of which distort the marketplace in ways that are difficult for individuals to combat.

Many CFPB enforcement actions over the past few years have tackled companies that abuse the most vulnerable among us. The CFPB's lawsuit against subprime auto lending giant Credit Acceptance Corporation details how it targeted low-income car buyers with limited or no credit score. CAC created an algorithm to secretly inflate vehicle prices based on the profile of the borrower and ensure that it would still turn a profit when large percentages of its borrowers predictably defaulted. The Bureau is pursuing similar allegations in Heights Finance, where an installment lender "pushed consumers into financial quicksand" by aggressively pushing them to refinance expensive loans and lying about the consequences. Heights also targeted vulnerable individuals, many of whom it knew had a propensity to reborrow because they could not afford to actually repay their loans. And the CFPB took on a prison financial services company called JPay, which illegally forced individuals transitioning out of incarceration to use a prepaid card that saddled them with unavoidable fees. These individuals had no choice about how to receive their own money or avoid the fees.

Companies that create and exploit informational asymmetries beyond traditional deceptive tactics have also been a priority for Director Chopra's enforcement. The Bureau sued fintech company SoLo Funds, alleging that it employs pernicious dark patterns to ensure that its borrowers always pay a "tip" or "donation" without meaningful consent. The Bureau also sued Acima and its former CEO for using digital dark patterns to hide the provisions of its "rent to own" predatory leasing contracts. Acima targeted its high-cost credit product toward borrowers with poor or limited credit, frequently making them pay much more for the product than its retail price.

Congress intentionally provided the CFPB with the tool of abusiveness to address this conduct that distorts our marketplace and is sometimes beyond the reach of the tools of deception or unfairness. As in many instances of discriminatory conduct, there is simply no way for an individual to know that their car's price was inflated based on their credit score or that they received a high-cost loan offering because of their prior struggles to repay their debt. It is imperative that the CFPB continue this trajectory of pursuing abusive conduct.

Enforcement by the Numbers

The CFPB's enforcement during Director Chopra's term has resulted in over $6.2 billion in consumer redress, $3.2 billion in civil monetary penalties and 84 enforcement actions - including 29 actions since the Supreme Court's ruling in CFPB v. CFSA.

The incoming administration has been explicit in its criticism of the Bureau, but the narrative that the CFPB has been a rogue actor is misguided. This enforcement agenda demonstrates its adherence to the framework in which it was created and the need to remain true to the CFPB's core mission: a financial system that works for Americans instead of the other way around.

Endnote

While these actions occurred under the administration of Director Chopra, the behind-the-scenes heroes of these actions are frequently unsung. The attorneys, paralegals, investigators and countless staff have chosen to work for the government rather than a private firm or bank (where they could likely triple their salary) deserve enormous credit for their tenacity and creative legal thinking while managing the tedious aspects of litigation that most of us will never hear about. These folks have worked weekends, scoured millions of records, and taken on hordes of K Street lawyers, all to make our financial marketplace work for everyone.

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