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The Consumer Financial Protection Bureau (CFPB) has voluntarily dismissed a lawsuit against Vanderbilt Mortgage & Finance that accused the Tennessee-based lender of pushing borrowers into “unaffordable loans” that, in some cases, caused them to lose their homes.
The case against Vanderbilt was one of four dismissals announced by the CFPB on Thursday under the watch of acting director Russell Vought. Each of these suits were filed during the Biden administration under former CFPB Director Rohit Chopra.
The bureau also tossed a lawsuit that accused Rocket Homes and the Jason Mitchell Group of RESPA kickback violations, one that accused Capital One of cheating customers out of interest rate payments on their savings accounts, and one against a student loan servicer, the Pennsylvania Higher Education Assistance Agency.
Vanderbilt is a financing arm of Clayton Homes, the nation’s largest builder of manufactured homes and a subsidiary of the Warren Buffett-owned Berkshire Hathaway.
The CFPB filed suit against Vanderbilt in early January, accusing the company of violating the Truth in Lending Act (TILA) and Regulation Z. The bureau said that “Vanderbilt’s business model ignored clear and obvious red flags that the borrowers could not afford the loans.” Consequently, many could not make their monthly payments, debts that were exacerbated when the lender charged them additional fees and penalties after their loans became delinquent, the bureau alleged.
Vanderbilt pushes back
Vanderbilt refuted the accusations, telling HousingWire in a statement at the time that “the CFPB’s lawsuit is unfounded and untrue, and is the latest example of politically motivated regulatory overreach.” The company did not immediately provide any comments on the dismissal of the lawsuit.
Vanderbilt’s prior statement included details about the bureau’s investigation into its lending practices. The lender claims that the bureau examined “tens of thousands” of loans over a six-year period and found that less than 1% of them shouldn’t have been originated.
The company went on to say that many of these potentially risky loans have never been delinquent. And it said that its underwriting practices exceeded legal requirements for assessing a borrower’s ability to repay by considering both their debt-to-income ratio and residual income, even though the law requires only one of these metrics to be used.
A clear shift at the CFPB
In the opening month of the Trump administration, the CFPB has clearly shifted direction away from the “regulation by enforcement” approach championed by Chopra.
After Trump fired Chopra on Feb. 1, he named Treasury Secretary Scott Bessent as the bureau’s acting director. Bessent promptly ordered agency employees to stop their activities, including the issuance of final rules, settlement enforcement actions and participation in legal cases.
Vought, the architect of the conservative Project 2025 document, took over supervision of the CFPB soon after. Vought notified the Federal Reserve that the bureau would not be seeking its next draw of unappropriated funds and shut down its office in Washington, D.C.
Vought’s actions drew the ire of the National Treasury Employees Union, which sued Vought for his directive to stop working and for granting access to the bureau’s data systems to the Elon Musk-led U.S. DOGE Service.
Trump has nominated Jonathan McKernan as the CFPB’s next full-time director. McKernan had a confirmation hearing Thursday with Senate banking committee members in which he agreed with the idea that the bureau has been operating outside its statutory authority.
“A big part of the CFPB’s problem is it has very little accountability, either to Congress or to the president,” McKernan told senators. “I think that’s part of the reason we’ve had these recurring episodes of CFPB pushing the limits.”
