BREAKING: Trump CFPB Tries to Back Off Protecting Americans from Predatory Mortgages

Russ Vought quietly acts to shield shady subprime lenders.

So far in his tenure as Acting Director of the CFPB, Russell Vought has distinguished himself by undertaking an illegal mass-firing campaign, mandating an unlawful work stoppage, and backing a Republican bill that would move $5 billion from Americans’ pockets to banks’ coffers through junk fees.

Now, Vought has gone even further. Yesterday, Vought’s CFPB went out of its way to shield shady subprime mortgage lenders from Biden-era efforts to rein them in. It’s a harrowing illustration of how far Vought, Trump, and their boss—Elon—are willing to go to sell out consumers. And it’s a frightening sign of what might be next.

Shady Home Equity Contracts Pose Important Risks to Consumers and their Families

The Trump CFPB’s actions concern so-called “home equity contracts,” also known as home equity “investments.” Under these agreements, companies lend to consumers up front in return for a stake in the consumer’s home and any future appreciation in its value.

These contracts come with significant risks, and they can have devastating consequences for homeowners. As the CFPB detailed in the Biden era, home equity contracts can be expensive and misleading, and they can put families in situations where they are essentially forced to sell their homes. For example, the state of Massachusetts recently reached a settlement with one home equity contract company—EasyKnock—related to allegations that the firm bought homes from “cash-strapped consumers at bargain-basement prices and then rent[ed] them back to the consumers” at unfair rates. EasyKnock later closed, and drew additional scrutiny from Congress.

In response to these types of harms in the home equity contract market, the CFPB weighed in earlier this year in a case called Roberts v. Unlock Partnership Solutions AOI, Inc. That case involved a company allegedly driving a consumer into a predatory home equity contract, then claiming that the loan fell outside of any consumer financial protections. To address the company’s dubious arguments, the CFPB filed an amicus brief pointing out that the Truth in Lending Act (TILA)—a key set of guardrails in consumer credit markets—clearly applies to home equity contracts. More fundamentally, the CFPB’s amicus brief served to send a clear message: that financial tricksters can’t get out of following the law just by “slapping a different label on a loan.”

For the Vought CFPB, Basic Protections Go Too Far

Yesterday, however, the CFPB quietly rescinded its amicus brief in Roberts.

In asking the court to withdraw its amicus brief, the CFPB said that it had essentially changed its mind, and that it was now centrally concerned about whether it would “harm the property interests” of the company being sued in the case if that company were held to the letter of the law. In laying out its change of heart, the CFPB called on the court to see its previous amicus brief as “a legally void event.”

This action throws the Vought CFPB’s goals into sharp relief. Under this new political leadership, the CFPB’s supervisory function has been shut down, and CFPB enforcement teams have been ordered not to take action against firms that screw up people’s credit reports or harm servicemembers. But if a predatory company’s property interests are threatened, the CFPB will now send in the cavalry to make sure people can be tricked out of their homes without consumer protections that they are entitled to under the law.

Of course, withdrawing the amicus brief is legally pointless, as since the Supreme Court’s decision in Loper Bright, courts are free to evaluate agencies’ interpretations of law on their own merits. That means that even during the Vought CFPB, courts can continue to consider the CFPB’s previous interpretations of consumer financial protection statutes.

But it’s becoming increasingly clear that the Vought CFPB is not just dropping the ball in consumer protection. Instead, it is affirmatively working to weaken consumer safety and tilt markets in favor of the powerful.

Ladies and gentlemen, we give you Russ Vought, Donald Trump, and Elon Musk—making sure you pay more in junk fees, that predatory lenders can steal your home, and that the laws no longer apply to the powerful. You know, as representatives of the working people’s party are likely to do.