*

Dismissal of cases against companies accused of cheating

millions of consumers

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Dismissals issued during Trump nominee's confirmation

hearing

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Show administration's dismantling of agency includes

general

retrenchment in enforcement

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(Rewrites throughout, adds other cases dropped)

By Douglas Gillison

Feb 27 (Reuters) - The U.S. Consumer Financial

Protection Bureau on Thursday dropped a series of enforcement

actions against financial services companies accused of

wrongdoing under the prior administration, including a major

case against Capital One for allegedly avoiding billions

in interest payments.

The dismissals continue President Donald Trump's rapid moves

to dismantle the agency, which he has said should be eliminated,

but occurred while his nominee to head the CFPB, Jonathan

McKernan, was on Capitol Hill testifying before the Senate in a

confirmation hearing.

The agency's fate had seemed grim since Trump took office

last month and Thursday's actions confirmed its dismantling

would include a swift retrenchment of pending enforcement

actions.

McKernan nevertheless told lawmakers he would continue to

take consumer protection enforcement actions if confirmed.

The agency dropped the case against Capital One, after

accusing the bank last month of illegally cheating customers who

held its flagship "high interest" savings account out of more

than $2 billion in interest payments.

It also on Thursday dismissed a lawsuit brought last

year against the student loan servicer Pennsylvania Higher

Education Assistance Agency (PHEAA), accused of illegally

collecting on student loans discharged in bankruptcy.

Last week, the CFPB dropped a case against the online lender

Solo Funds, which the agency had said deceived borrowers about

loan costs.

Likewise, the CFPB dropped cases against the Berkshire

Hathaway ( BRK/A )-owned Vanderbilt Mortgage & Finance, accused

of steering borrowers toward unaffordable mortgages, and Rocket

Homes, which the agency in December charged with resorting to

illegal kickbacks in a mortgage scheme.

Representatives for Capital One, Vanderbilt, PHEAA and the

CFPB did not immediately respond to requests for comment.

In a statement, Rocket Homes said the case against it was

based on faulty claims and never should have been brought.

"We are proud to put this matter behind us and remain

focused on our mission to help everyone home."

Since taking office, Trump and his downsizing czar Elon Musk

have vowed to destroy the CFPB, firing scores of staff, shutting

its Washington offices and moving to cancel its lease, while

placing virtually all agency workers on temporary leave, actions

which employee unions and consumer advocates have challenged in

court.

Despite Trump's comments, the administration has said in

court filings that it intends to operate a more streamlined and

efficient CFPB, which Democrats say will be one wholly

inadequate to meet the agency's legal mandates.

Pending the outcome of a legal motion, the administration

has agreed not to fire more personnel, alter or remove data or

defund the agency.

In his confirmation testimony on Thursday, McKernan

criticized the agency's past enforcement actions as excessive

but said if confirmed, he would work to uphold the agency's

legal mandates.

"I'm fully committed to following the law fully and

faithfully," he said.