CFPB stops oversight of Apple and U.S. Bank early through settlements

The Consumer Financial Protection Bureau (CFPB) has prematurely ended its oversight of Apple and U.S. Banks. Both firms agreed on a settlement plan to fulfill their financial obligations and end the oversight before the scheduled period. 

The original agreement, which arose from violations of consumer protection laws, was first made during President Joe Biden’s administration and required the CFPB to oversee Apple and U.S. Bank for five years. The two firms settled on September 22, with Apple paying $25 million and U.S. Bank settling for $15 million to fulfill their financial obligations. 

Apple and U.S. Bank pay $40M in penalties

Apple was under oversight following allegations that it and its partner Goldman Sachs mishandled transaction disputes related to the Apple Credit Card and misled customers about interest-free purchases. The CFPB found that the iOS developer had failed to send transaction disputes to Goldman Sachs regarding its enrollment practices for Apple Card Monthly Installments. Apple was therefore required to pay $25 million to fulfill its obligations.

According to the CFPB’s filing, the Bureau separately charged Goldman Sachs for its role in marketing, offering, and servicing the Apple Credit Card. To fulfill its obligations, Goldman was expected to pay a penalty of $19.8 million in redress to consumers and a $45 million civil penalty. 

On the other hand, U.S. Bank faced CFPB action in 2023 over allegations of unlawfully blocking unemployed consumers from accessing pandemic relief benefits. According to filings, the U.S. Bank mishandled its ReliaCard prepaid debit program, freezing accounts without sharing adequate means of identity verification with cardholders or allowing them to access unemployment benefits. 

The U.S. Bank also failed to investigate error notices from unauthorized transactions on time. The CFPB ordered the bank to provide $5.7 million in consumer redress and pay a $15 million penalty. Additionally, the bank was ordered to implement measures ensuring no future occurrence, with a concurrent OCC order imposing an additional $15 million fine. 

The decision allows Apple and U.S. Bank to operate without further compliance obligations, closing the chapter with CFPB. Neither of the firms has commented on the early settlement. 

The Trump administration has worked on reducing the agency’s reach in consumer finance oversight, with similar actions in process to end settlements involving Toyota and Bank of America. Reportedly, all pending enforcement cases have been dropped since the policy change was enacted earlier this year.

California AG Rob Bonta slams Trump for weakening CFPB oversight

California’s Attorney General, Rob Bonta, has accused the Trump administration of shrinking the CFPB’s authority, citing its power to protect consumers from being taken advantage of by corporations.

The CFPB has faced backlash from the Trump administration this year, with overdraft fees and medical debt reporting being suspended. Musk declared the “CFPB RIP” in February, triggering warnings from critics who said the plan risks protecting consumers facing everyday financial burdens. The Business Insider estimated that the Bureau has returned at least $21 billion to consumers. 

The Court of Appeals declared Trump’s plan to fire at least 1,500 CFPB employees to move forward last month, adding to the efforts to weaken the bureau. Trump appointed judges Gregory Katsas and Neomi Rao, who reversed the lower district court ruling, saying it lacked jurisdiction to intervene. 

Senior officials have criticized Trump’s decision to shrink the bureau, including Judge Cornelia Pilard, who argued that the administration was overreaching to eradicate the CFPB and warned that such power does not rest with the President. Senator Elizabeth Warren said the ruling ignored the lawless attempt to destroy the bureau. The bureau has also begun rewriting its open banking regulations according to a Cryptopolitan report. 

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