Consumer Watchdog Unleashes Flurry of Lawsuits Ahead of Administration Change
As the holiday season comes to a close, the Consumer Financial Protection Bureau (CFPB) has been anything but quiet. In a bold move, the agency has filed a series of high-profile lawsuits against major corporations, including Zelle, Walmart, and Rocket Homes, alleging fraudulent practices and unfair treatment of consumers.
Zelle Under Fire for Fraud Handling
The CFPB’s lawsuit against Zelle, a popular peer-to-peer payment app, accuses the company and its banking partners of allowing scams to run rampant on the platform, resulting in losses of $870 million over seven years. The agency alleges that Zelle and its partners failed to adequately respond to customer complaints, often instructing them to work with law enforcement or even the scammers themselves to resolve issues.
Walmart Accused of Forcing Gig Workers into Costly Deposit Accounts
In another major lawsuit, the CFPB accuses Walmart of illegally requiring gig workers to accept payment through costly, fee-laden deposit accounts operated by fintech partner Branch Messenger. The agency claims that Walmart and Branch opened accounts without permission, using sensitive information like Social Security numbers, and charged exorbitant fees for services like quick fund transfers.
Rocket Homes Faces Allegations of Kickback Scheme
The CFPB has also filed a lawsuit against Rocket Homes, accusing the real estate company of engaging in a kickback scheme that discouraged comparison shopping among customers. The agency alleges that Rocket Homes gave real estate agents referrals in exchange for encouraging buyers to use Rocket Mortgage, and required brokers to “preserve and protect” its customer relationships by nudging them away from other mortgage options.
A Test of the Incoming Administration’s Approach to Consumer Protection
The flurry of lawsuits has sparked debate about the incoming Trump administration’s approach to consumer protection enforcement. While some argue that the CFPB’s actions are necessary to hold corporations accountable, others see them as politically motivated and overly aggressive. The outcome of these lawsuits will be closely watched by both pro-business groups and progressive activists, who will be looking for signs of the Trump administration’s commitment to consumer protection.
A Shift in Enforcement Approach?
The CFPB’s actions come as the agency faces a potential change in leadership, with President-elect Trump expected to replace Director Rohit Chopra. Chopra has signaled that he will leave the agency if asked, and has vowed to continue pursuing aggressive enforcement actions until the end of his tenure. The incoming administration’s approach to consumer protection enforcement will be closely watched, with some expecting a lighter touch compared to the Biden administration.
Leave a Reply