Summary
- CFPB also ends requirements that Toyota pay tens of millions to car buyers
- Walmart had been accused of causing delivery drivers to pay “junk fees”
- Former official denounces ‘corporate pardons’
(Reuters) – The U.S. Consumer Financial Protection Bureau has canceled a 2023 settlement with the financing arm of Toyota over allegations the auto giant illegally steered thousands of consumers into costly and unwanted product bundles, according to documents published by the agency.
The agency on Tuesday also dropped a federal lawsuit against the retail giant Walmart and the workforce payments firm Branch in which officials last year said the companies had forced more than a million delivery drivers into using accounts that cost them more than $10 million in so-called junk fees.
The decisions continued efforts by President Donald Trump’s administration to minimize CFPB oversight of consumer finance. The agency, which Trump has said should be eliminated, accusing it of politicized enforcement, has now ended almost all the enforcement actions that were pending when Trump took over.
The CFPB and Branch did not immediately respond to requests for comment.
Walmart said in a statement it was pleased with the CFPB’s decision to withdraw a case it said was rushed, erroneous and “never should have been filed in the first place.”
According to an order canceling the Toyota settlement, the CFPB specifically waived requirements that Toyota pay tens of millions of dollars in refunds and redress to allegedly harmed consumers. The order dated Monday did not provide a reason for the decision.
However, Toyota said it welcomed the CFPB’s action and was committed to “doing the right things” for Toyota buyers.
“We will continue to enhance our practices to deliver the best possible customer experiences,” the company said in a statement.
In 2023, the CFPB ordered Toyota to pay a $12 million penalty and $48 million to car buyers who had been harmed since 2016.
According to the CFPB, thousands of borrowers complained that dealers lied about whether “add-on” products offering protection for things such as damage, theft or out-of-warranty coverage were mandatory, or that Toyota rushed the paperwork so buyers would not realize how much they were paying.
The regulator said Toyota made it “extremely cumbersome” to cancel the bundles, including by routing more than 118,000 borrowers to a hotline where agents were instructed to dissuade cancellations, and often failed to provide refunds.
The 2023 settlement had been due to last five years.
In a statement, former CFPB Director Eric Halperin, who resigned in February, said the decision amounted to an inexplicable corporate pardon.
“The Trump CFPB doesn’t want to just pull back on enforcing the law, it wants to actively reward lawbreakers instead,” he said.
The White House did not immediately respond to a request for comment.
Reporting by Douglas Gillison; Editing by David Gregorio and Christopher Cushing
Source: worldautoforum.com
