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

(NewsNation) — The Consumer Financial Protection Bureau under President Donald Trump has dropped nearly two dozen consent orders that regulated banks and lenders accused of violations such as redlining and illegal overdraft fees.

The orders had targeted companies including Citibank, U.S. Bank and Toyota Motor Credit Corporation. Citibank’s order addressed alleged discrimination against Armenian-American customers, while U.S. Bank was cited for reportedly illegally freezing unemployment benefit prepaid cards. Toyota Motor Credit Corporation was accused of preventing borrowers from canceling expensive loan bundles.  

The consent orders had required companies to compensate affected consumers and take steps to prevent future violations.

“This is completely unprecedented,” Shennan Kavanagh, director of litigation at the National Consumer Law Center, told NewsNation. She said the dismissals cover “a wide range of long-standing, systemic and extremely harmful practices that impacted hard-working families and consumers across the country.”

Advocates have warned that with the orders dropped, consumers will have weaker protections against corporate wrongdoing in the future, heightening the risk of a financial crisis. 

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

Many of the orders were dismissed years before they were set to expire and included little to no explanation about why the terminations occurred.

The CFPB did not return a request for comment from NewsNation. 

Trump’s budget chief signals CFPB shutdown

Trump’s budget chief, Russ Vought, who oversees the CFPB, said he plans to shut down the agency within the next two to three months, according to remarks made last month on the Charlie Kirk Show.

The consent order terminations appear to align with that push, although the administration has argued in court there are no official plans to shutter the agency. 

“People say, ‘consumer financial protection — don’t we want to protect consumers?’ Absolutely. This agency wasn’t doing it,” Vought said on the show. “This agency, all they want to do is weaponize the tools of financial laws against basically small mom and pop lenders and other small financial institutions, and that’s what we saw.” 

Vought added that only a few Republican appointees and career staff members remain at the bureau as it winds down operations.

He previously called for abolishing the agency in his section of the conservative playbook Project 2025. In it, he says consumer protection functions should be returned to banking regulators and the Federal Trade Commission.

The Trump administration faces legal challenges over whether the agency, which was created by Congress, can be shut down. 

Kavanagh’s group has been involved in litigation against the administration, including over its efforts to shut down the CFPB. 

The White House did not return a request for comment, citing a lack of staff due to the ongoing government shutdown. 

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

CFPB consent orders are legal agreements voluntarily entered into by the agency and companies accused of violations. They generally last five years and can impose monetary penalties, require reporting or cooperation, and mandate steps to prevent future violations, according to the agency. 

Eric Halperin, former CFPB director of enforcement under the Biden administration, noted that it often takes years from the start of an investigation to the issuance of an order. 

“It’s an incredibly comprehensive and careful process, and the decision to bring an enforcement action is not one that the agency takes lightly,” he said.

Halperin, who oversaw all consent orders entered between October 2021 and February 2025, said the early terminations represent “cumulatively decades of work” being undone. 

“All of that has been waved away with a snap of a finger,” he said, criticizing the current CFPB for a lack of transparency and explanation for the terminations. 

These companies are now “off the hook and effectively pardoned for all their illegal activity,” he said, adding that they will now “never be held accountable.” 

Discrimination and overcharging practices named in consent orders

The CFPB terminated a 2023 consent order last week that Citibank had been under for alleged discrimination against Armenian-American customers in California, three years before it was set to expire.

The 36-page consent order stated that some Citi employees referred to credit card applicants with Armenian names as “Armenian bad guys” or the “Southern California Armenian Mafia.” 

At the time, Citibank apologized and agreed to enter into an order to pay millions in fines and redress, without admitting wrongdoing. 

In a two-page termination order, Vought said Citibank “has fulfilled certain obligations,” including paying $24.5 million in penalties and implementing measures to prevent future violations. 

Bloomberg reported that Trump’s son Eric set up a trust with Citibank to hold part of his father’s wealth after Citigroup CEO Jane Fraser reached out to congratulate the president on his election win in November.

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

“This is not some small community bank. It’s an international financial institution that was caught red-handed in explicit discrimination,” he said.

Jabagchourian added that the CFPB “was set up to protect specifically for instances like this,” and that ending such orders “hurts the citizens of this country, particularly certain segments of it.”

Citibank did not return a request for comment from NewsNation. 

In 2024, the CFPB took action against Navy Federal Credit Union for charging illegal overdraft fees and issued a consent order that directed the lender to refund more than $80 million to consumers, halt the illegal fees and pay a $15 million civil penalty. 

Vought terminated that order in July, canceling all unfinished customer refunds and clearing the lender from paying penalties. 

In a statement, Navy Federal defended its use of overdraft fees and supported the CFPB’s decision, saying “our overdraft program allows our members to make necessary, everyday purchases without going into long-term debt or turning to payday lenders. Navy Federal complied with all applicable laws and regulations at the time and continues to do so. We firmly believe the CFPB’s decision to terminate the order was appropriate.”

The CFPB also ended a 2023 consent order with Toyota Motor Credit Corporation, which had been ordered to pay $60 million over allegations the company illegally funneled thousands of consumers into pricey product bundles that increased their monthly car loan payments.

Toyota was absolved from paying out those refunds. Toyota said in a statement it supported the CFPB’s decision. “We will continue to enhance our practices to deliver the best possible customer experiences,” the company said, according to Reuters.

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

Consent orders are “essential tools to compensate for loss of money, for lost opportunities in the credit market, to ensure that consumers can enjoy economic stability and advancement and not be at risk of unlawful conduct,” Kavanagh said.

Without these safeguards, consumers face a significant risk that wrongdoing can recur by that same business or other businesses that are watching and getting the message that they no longer need to comply with the law, she said. 

While the agency acts as a defense for consumers against harmful business practices, it’s also important for the industry, she noted. 

“In order to have fair competition in the marketplace, there needs to be accountability and transparency and insurance that bad actors and illegal practices are weeded out,” Kavanagh said.

Risk of another financial crisis? 

The CFPB was established by Congress after the Great Recession to protect consumers from abusive financial practices, the agency stated.

Since then, it has recovered more than $21 billion for consumers in the form of monetary compensation, principal reductions, canceled debts and other relief.

The absence of the CFPB — or a weakened version — could lead to “another economic crisis that the CFPB was put in place to avoid,” Kavanagh said, adding that without proper oversight, conditions will gravely deteriorate for consumers. 

While state attorneys general and the private legal sector could step up, there will still be a void, she warned. 

Leading up to the 2008 crisis, there was “willingness to let Wall Street call the shots, and a lack of federal law enforcement against big banks and mortgage lenders that broke the law,” said Halperin, the former CFPB director. 

“The Trump administration’s attempt to shut down the CFPB will leave us unprepared for the next financial crisis, and it will be Americans and law-abiding companies who are going to pay the price in the end,” he said.