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Status of federal agency’s lawsuit against Capital One unclear

A lot has happened since Jan. 20, as the Trump White House employs “shock and awe” tactics at lightning speed. Among the consequences is the shutdown of the Consumer Financial Protection Bureau, a government watchdog over private industry.

Specifically, the CFPB’s pause in work leaves in question a major federal lawsuit against McLean-headquartered Capital One and its parent company, Capital One Financial, filed in the U.S. District Court for the Eastern District of Virginia.

On Jan. 14, in the waning days of the Biden administration, the CFPB filed suit in federal court against the credit card giant and its holding company, alleging the companies cheated millions of consumers out of more than $2 billion in interest payments.

The CFPB alleged that Capital One misled consumers about “high interest” accounts, claiming Capital One Financial illegally deceived consumers and that Capital One N.A. — a national bank and wholly owned subsidiary of Capital One Financial — violated the Truth in Savings Act by falsely representing the 360 Savings accounts as providing a variable interest rate that was “one of the nation’s” “top,” “best” and “highest” and that customers would earn much more interest than with the average savings account.

Capital One responded with a statement last month following the filing: “We are deeply disappointed to see the CFPB continue its recent pattern of filing eleventh-hour lawsuits ahead of a change in administration. We strongly disagree with their claims and will vigorously defend ourselves in court.”

Just over a week later, Donald Trump entered office and since then has issued dozens of executive orders, some of which shut down entire government agencies, including the CFPB. The bureau’s director, Rohit Chopra, was fired, and Trump named Office of Management and Budget Director Russell Vought as its acting director on Friday, Feb. 7.

Over the weekend, the agency, which has a mission to protect consumers in the financial sector, reportedly sent multiple missives to workers telling them that its Washington, D.C., headquarters were closed and that they should not do any work.  On Monday, the White House issued a news release calling the CFPB, which was created by Congress in 2010 in response to the 2008 banking crisis, a “woke, weaponized arm of the bureaucracy that leverages its power against certain industries and individuals disfavored by so-called ‘elites.’”

“Under the administration of President Donald J. Trump, the weaponization ends right now,” the release stated.

What that means for the lawsuit

CFPB’s case against Capital One remains on the docket at the U.S. District Court of the Eastern District of Virginia’s Alexandria courthouse. However, several legal experts have speculated publicly that any CFPB enforcement actions will be shut down.

On Feb. 4, attorneys representing CFPB filed a request for an emergency motion for a temporary stay of deadlines related to whether the case should be consolidated with a class-action multidistrict lawsuit brought by Capital One 360 Savings accountholders “to promote consistency with the goals of the new Administration.”

A judge denied the motion for a temporary stay and gave the CFPB until Friday to file its position on consolidation.

“I’m very curious to see what happens tomorrow and how the bureau is going to proceed, because they’re in a court that moves very quickly and they want to know the CFPB’s position about how they’re going to move forward, but it doesn’t seem like they’re really willing to accommodate too many extensions to hear from the CFPB about that,” explained Erin Witte, the director of consumer protection for the Consumer Federation of America (CFA), a Washington, D.C., association of nonprofit consumer organizations.

Witte shrugged off the fact that the lawsuit was filed in the final days of the Biden administration.

“It’s clear Capital One intentionally steered their customers out of a product that would have paid them more money, and they did it in a way that made it difficult for their account orders to figure out that that was even happening,” she said. “I mean, this is not a political football. This is a pretty clear violation of law when you read the allegations.”

Neither attorneys representing Capital One Financial in the lawsuit or the company’s spokespeople or the media office for the CFPB responded Thursday to requests for comment.

U.S. Sen. Mark Warner, Virginia’s senior Democratic senator, said Thursday in a media availability that he doesn’t follow individual actions filed by the CFPB, when asked about the Capital One lawsuit.

“In certain areas, I think they were very aggressive,” Warner said. “I have no problem with CFPB doing its job, but do it the way where you try to work with the litigant first.”

Warner pointed to the CFPB’s report that it has returned billions of dollars to consumers through law enforcement activity since its creation.

“What I do have the problem with is an organization that’s returned over $20 billion to consumers because of fraud, because of rip-off scams, arbitrarily being shut down with no warning,” he said. “I mean, what happens if it’s the FBI next? What happens if it’s…. [the] Environmental Protection Agency, just because it’s in the political crosshairs of some of the very wealthy folks who make up the Trump administration.”

Warner said that if President Trump wants to reform CFPB or any federal entity, he should present his ideas to the U.S. Congress, rather than taking unilateral action.

“Then we can try to come to agreement,” Warner said. “What we can’t come to is by executive fiat and a stroke of a pen, this president dismantling wide swaths of government that have broad bipartisan support. That’s just not the way the Constitution and system works.”

The CFPB’s shutdown comes amid fast-moving agency takeovers by Trump adviser Elon Musk, the world’s richest man and head of the newly created Department of Government Efficiency, or DOGE. Although some federal judges have put injunctions in place, Musk and his DOGE aides have received access to sensitive federal data, including personal and financial information of the nation’s more than two million federal workers.

Trump has given Musk the authority to cut the federal workforce and spending in many sectors, although the U.S. Post Office, military branches and border enforcement are mostly immune to cuts.

In the Feb. 10 press release, the Trump White House made several claims about the CFPB, including that in the waning hours of the Biden administration, “it gave itself the authority to regulate Americans’ checking accounts by dictating government price controls and unilaterally buried $50 billion in medical debt.”

That was in reference to the CFPB’s finalizing a rule in January under Biden that would keep medical debt from being included on credit reports. It was set to take effect in March. However, an executive order issued by Trump paused all rulemaking activity for 60 days.

Pushback on CFPB’s closure

The CFA issued a press release Sunday noting Congress transferred consumer financial protection functions to the CFPB when it formed. “Unless Congress passes legislation, the suspension of supervisory work by the CFPB will not result in those responsibilities being returned to the agencies that formerly had them,” the association stated.

“The CPFB was created after excessive risk-taking by financial companies, many of whom were not supervised by a federal regulator, crashed our economy,” Adam Rust, CFA’s director of financial services, said of the CPFB’s shuttering in a statement. “Millions of people lost their homes, work, savings, and businesses. It was created to protect people, not empower Elon Musk. If this administration chooses to cover its eyes from the facts, people will be put in harm’s way. This is a free pass for financial institutions to take advantage of consumers.”

The National Treasury Employees Union filed two federal lawsuits Sunday against Vought, alleging that “the administration has unlawfully trampled the power of Congress to create a federal agency that it deemed necessary to protecting American consumers” and that the CFPB violated the Privacy Act by disclosing employee records to the U.S. Department of Government Efficiency.

Associate Editor Katherine Schulte contributed to this article. 

CHKD is latest Va. system to halt gender-affirming treatment for minors

Days after UVA Health and VCU Health suspended all gender-affirming medical treatments for people under age 19, Norfolk-based Children’s Hospital of The King’s Daughters has followed suit, a spokesperson confirmed Tuesday.

In a statement, CHKD noted that it has never offered surgical treatments to patients.

“With the utmost concern for our patients and our caring team of pediatric professionals, CHKD has determined that we must suspend medical treatments associated with gender-affirming care to be in compliance with the White House executive order of Jan. 28. This means that we must suspend the prescribing of hormone therapy and puberty blockers specifically for gender-affirming care. Our determination is consistent with actions taken recently by our colleagues at UVA, VCU and other hospitals across the nation.

“CHKD will remain vigilant in monitoring guidance related to this executive order and will be prepared to adapt rapidly if the situation changes,” the statement said.

To respond to patients whose treatment has been suspended, CHKD said in its statement, “our team is expediting access to appointments with physicians and with our mental health team to offer guidance, consultation and mental health services. We are wholeheartedly committed to the dignity of our patients and to the sacred trust they place in CHKD and our team of devoted physicians and clinicians.”

Unlike the two university-affiliated systems, CHKD did not receive a letter from Virginia Attorney General Jason Miyares, who last week sent a memo to UVA Health and VCU Health, informing the health systems that they must stop providing treatments to minors seeking puberty blockers, hormone treatments or surgical procedures.

In the memo from Miyares titled “Protecting Children from Chemical and Surgical Mutilation,” the Republican attorney general referred to President Donald Trump’s executive order issued Jan. 28 by the same name.

CHKD’s announcement comes as many health care systems — both public and private — consider halting gender-affirming treatments for minors, even though under Virginia law, minor patients must have their parents’ or guardians’ permission to seek such treatments.

Del. Rodney Willett, a Democratic delegate representing Henrico County who serves on VCU Health’s board of directors, said Tuesday in an interview that health systems rely heavily on federal funding, which they could lose if they don’t comply with the White House’s executive order.

Miyares said in his memo that “any hospital or other institution … is at risk of losing” federal research or education grants, and “may involve Medicare or Medicaid conditions of participation/coverage.”

CHKD’s website notes that Medicaid covers approximately 55% of its inpatient days, “the highest percentage by far of any acute care hospital in Virginia.” Also, CHKD “has a large annual shortfall between the costs we incur caring for Medicaid patients and the reimbursements we receive from Medicaid,” including $33 million in fiscal 2022.

Willett, who blasted Trump’s executive order as “inhumane,” said VCU Health’s leaders’ “hands were tied. It was a devil’s choice. You’re damned if you do, you’re damned if you don’t.”

If VCU lost federal funding, “hundreds of thousands of patients” would be impacted, he said, “as it is for UVA Health.”

Private health care systems also will likely be impacted, Willett added.

On Tuesday, Roanoke-based Carilion Clinic said its status had not changed from last week, when it released this statement: “We are reviewing the latest federal directive to determine potential next steps and deliver care in compliance with regulations. We will share more with our patients and their families as this evolves.”

Bon Secours and Inova Health did not immediately respond to requests for comment, and Sentara Health said last week it “does not have a gender reassignment program for minors.”

Federal lawsuit

On Tuesday, a group of transgender youth, young adults and family members joined the ACLU, GLMA and PFLAG in a federal lawsuit challenging Trump’s executive order ending access to gender-affirming medical care for people under age 19. One 17-year-old plaintiff, Willow, lives in Richmond; her last name was not included in the lawsuit or news release to protect her privacy.

In a statement, Willow’s mother, Kristen Chapman, said they moved to Virginia in 2023 after the legislature in Tennessee, where they lived before, passed a law banning gender-affirming care for minors.

“We moved to Virginia in the summer of 2023, but struggled to find a provider that would accept our Medicaid insurance. As paying for her care out-of-pocket became prohibitively expensive, I tried for months to get an appointment at VCU, and I finally got an appointment for Jan. 29, 2025,” Chapman said. “The day before our appointment, President Trump signed the executive order at issue in this case. The next day, just a few hours before our appointment, VCU told us they would not be able to provide Willow with care. I thought Virginia would be a safe place for me and my daughter. Instead, I am heartbroken, tired and scared.”

According to the legal complaint, VCU Health informed Willow that her appointment was canceled.

The lawsuit says that VCU and its Children’s Hospital of Richmond received nearly $7.3 million in federal grants from the Health Resources and Services Administration (HRSA) and nearly $107 million in grants from the National Institutes of Health (NIH) in fiscal 2023, and UVA Health received more than $200 million in grants from NIH in fiscal 2023.