The decision to rush these suits out in the final weeks of the year reveals just how politicized the bureau has become, writes Joseph R. Mason, a fellow at the Wharton School.
Frank Gargano
The presidential transition and calls from President Donald Trump's circleto downsize the government has D.C. buzzing about which government agencies deserve to be on the chopping block. Federal agencies in recent years have been increasingly questioned — in legitimacy, in necessity and in effectiveness.
There is one agency in particular that has already landed itself in the crosshairs of key Trump advisors at the Department of Government Efficiency: theConsumer Financial Protection Bureau. In November, DOGE chief Elon Musk tweeted, "Delete CFPB. There are too many duplicative regulatory agencies." This was followed by Vivek Ramaswamy's tweet, "CFPB started under Elizabeth Warren less than 20 years ago, and consumers are no better off for its existence. Quite the contrary, actually."
Since these statements, questions surrounding the necessity of the CFPB have only intensified, with the bureau's actions in the final weeks of the Biden administration stoking the flames.
The bureau, helmed by Director Rohit Chopra, had been busy, even while other bureaucratic functions were preparing for the transition. The CFPB filed a flurry of made-for-headlines enforcement actions and lawsuits. The merits of the lawsuits are questionable and are unlikely to have legs. The decision to rush these suits out in the final weeks of the year reveals just how politicized the bureau has become and supports the case for capping the CFPB's power or even outright eliminating the bureau.
In the days before Christmas, the CFPB pushed out three lawsuits that exemplify the problems at the bureau. The suits were filed against Walmart, Rocket Homes and payments platform Zelle as well as its owners, which include JPMorgan Chase, Bank of America and Wells Fargo.
The defendants have fired back at the CFPB, accusing the bureau of being politically motivated and rushing the lawsuits out without doing their due diligence.
In the suit against Walmart, the CFPB is accusing the company and work-scheduling platform Branch Messenger of forcing some contract delivery drivers to receive their pay through Branch accounts, which allegedly saddled those drivers with fees. Notwithstanding that the federal government has gone to great lengths to move consumer payments to electronic platforms, all of which charge fees, Walmart has said the CFPB's lawsuit is "riddled with factual errors and contains exaggerations and blatant misstatements of settled principles of law." Both Walmart and Branch say the CFPB did not give them the chance to provide explanation and context for the allegations. But the CFPB got what it was after — a high-profile news cycle in the final weeks before the inauguration.
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The Rocket Homes suit follows a similar pattern. The CFPB is accusing the real estate agency of participating in a kickback scheme for referrals along with the Jason Mitchell Group, a real estate broker. The suit claims that "some" agents exhibited "reluctance" to offer other alternatives due to the alleged scheme, but — notwithstanding the CFPB's powers to investigate such arrangements — falls short of stating any substantial allegations of cause and effect. JMG Founder Jason Mitchell has since slammed the lawsuit, sharing that the CFPB offered him a settlement in exchange for turning on Rocket.
"The reality was we did nothing wrong," Mitchell said in a video he posted on LinkedIn, explaining his decision to refuse the settlement and fight the CFPB allegations. He accused the CFPB of just wanting to go after Rocket Homes, a sister company to Rocket Mortgage, the nation's largest mortgage lender, which he described as "the big fish."
"This was a witch hunt," Mitchell said.
As for the Zelle lawsuit, critics have jumped on the case and highlighted it as a clear example of the CFPB selectively targeting high-profile defendants in an attempt to further a political agenda and garner headlines. "What was once hailed as a vital consumer watchdog has become a politically charged agency that prioritizes ideology over its intended purpose," said Samantha Beeler, president of the League of Southeastern Credit Unions.
Others have noted that Zelle actually has more safeguards against fraud than other digital payments platforms, such as Cash App and Venmo. American Bankers Association President Rob Nichols stated that the CFPB "could have used its substantial budget over the last four years to work with industry and actually educate consumers on how to protect themselves from the growing threat of fraud as the Dodd-Frank Act envisioned. But instead of focusing on the real bad actors — the criminals and scammers preying on everyday Americans — this CFPB has devoted much of its time, energy, and resources to attacking banks."
Together, these three conveniently timed suits are clear indicators of rushed and politicized actions that place bureaucratic ambition over consumer protection. The CFPB is losing the faith of the public and it has no one to blame but itself. The bureau and Chopra's last-minute work will only lend credence to the CFPB's critics at DOGE, including Musk and Ramaswamy.
The CFPB has blatantly showed us, time and time again, that it cares about pushing ideological agendas more than helping American consumers.
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