CFPB Upheaval Leaves Hundreds of Millions in Settlements Unclaimed

With the CFPB’s future in limbo, so too are hundreds of millions in consumer settlements.

For example, Reuters reported Monday (March 3), there is a $100 million pot of funds intended for borrowers that the Consumer Financial Protection Bureau (CFPB) says were harmed by student loan servicer Navient.

And with the Trump administration attempting to wind down the agency’s work, payouts of hundreds of millions from financial service companies like Block and TD Bank are also in question, sources familiar with CFPB’s operations say. Without permission from the regulator, those sources said, these payouts cannot be issued.

In the case of Navient, the company — formerly Sallie Mae — agreed in September to pay the settlement following a seven-year legal battle. Navient said it did not agree with the CFPB’s findings, but noted that it had already begun to outsource its student loan servicing business.

But the Trump administration’s work stoppage at the CFPB seems to have halted settlement payments, the head of the Student Borrower Protection Center told Reuters.

“If the Navient checks had rolled out as expected in 2025, we would be hearing from people,” said Mike Pierce. “I do feel confident in saying that the Navient restitution is not being distributed right now.”

Pierce, a former CFPB official who worked on the Navient case for the regulator, said the bureau was under court order to disburse the funds.

The news comes days after reports that a number of CFPB employees had submitted statements in court that the agency’s new leaders plan to wind down the regulator and fire most of its workers.

These employees said they had attended meetings last month in which leaders of the CFPB and members of the Department of Government Efficiency (DOGE) discussed mass job cuts that would occur in three phases and end two or three months later with only five statutorily mandated positions still in place.

Also last week, Jonathan McKernan, Trump’s pick to lead the CFPB, told the Senate Finance Committee that the agency “has gotten in the way of its own mission” and “has acted in a politicized manner.”

In an interview on this topic last week, Amias Gerety, a former Treasury official and partner at QED Investors, noted that before the CFPB was formed, the regulatory landscape for consumer financial issues was much more fragmented and chaotic.

“If I feel like my bank is cheating me, who can I go to?” Gerety said, stressing that, unlike the Federal Trade Commission’s (FTC) enforcement-focused outlook, the CFPB allows for “quick resolution” through supervision.