Published on Feb 27, 2025
The Consumer Financial Protection Bureau (CFPB) was poised to sue Meta (META) over alleged targeted ad abuses when Rohit Chopra, the former director, was ousted this month, sources familiar with the matter said.
Now the agency’s plans are unclear as President Donald Trump –who had said he ultimately wants to eliminate the CFPB—tries to install a successor to Chopra.
The CFPB under Chopra determined that Meta’s ad targeting policies discriminated in advertising for financial products and violated laws that protect consumers from faulty credit reports, said sources familiar with the matter.
The CFPB was prepared to sue Meta if the company didn’t settle, but lawyers were still negotiating with Meta when Chopra, appointed by former President Joe Biden, was fired by President Trump days after his inauguration.
“We just ran out of time,” said a former CFPB official familiar with the matter. “If we had a couple more months, this would either be settled or we would see Meta in court.”
Supported by Republicans who have said the agency has frequently overstepped its authority, Trump has effectively shut down the CFPB. However, by doing so, the administration could be scuttling action against another favorite target of Republicans and the president, in particular—Meta. Trump unleashed a flurry of accusations against the company when Meta’s Facebook banned him after the January 6, 2021 attack on the U.S. Capitol and has threatened Meta Founder Mark Zuckerberg with prison.
Despite his past vow to neuter the agency, Trump is attempting to find a permanent replacement for Chopra. This morning, Jonathan McKernan, President Trump’s pick to lead the CFPB, is due to face lawmakers who will vote on his nomination. If he is confirmed by the full Senate, McKernan will have to decide what to do with the Meta case.
In a recent podcast, Meta’s Zuckerberg said he didn’t understand why the agency was probing the company, a social media platform.
“We’re not a bank. What does Meta have to do with this?” he told podcaster Joe Rogan in early January. “They kind of found some theory that they wanted to investigate and it’s like, OK, clearly they were trying really hard to find some theory.”
Spokespeople for Meta and the CFPB didn’t respond to requests for comment. Chopra didn’t respond to a request for comment.
Years-long investigation. While Meta advertisers are allowed to promote most products and services as they see fit, federal rules born of the civil rights movement prohibit home lenders from targeting ads based of gender, race or ethnicity—even if the targeting is done by a computer instead of a human.
Meta acknowledged in June 2022 that its ad targeting could fall short of anti-discrimination controls, and the company settled a DOJ lawsuit that accused Meta of engaging in “discriminatory advertising.”
The DOJ settlement was groundbreaking, based on the department’s first case challenging algorithmic bias under the Fair Housing Act.
Meta agreed to pay $115,000 as part of the 2022 settlement, the maximum penalty available under the housing law.
Around the time of the settlement, the CFPB began asking whether Meta’s targeted ads ran afoul of the bureau’s laws. Staff spent more than three years building its case against Meta, which handed over vast records explaining its data collection and marketing systems. Dozens of CFPB staff reviewed that evidence over the years.
In September, Meta disclosed the probe and warned that the CFPB was prepared to sue.
The CFPB found faults with Meta’s “advertising for financial products and services on our platform,” according to a company regulatory filing. “If the Director [Chopra] authorizes an action against us, the CFPB could file a lawsuit in the near-term and seek financial penalties.”
In its filing, Meta said company officials “disagree with the claims” and believed “an enforcement action is unwarranted.”
Credit reporting. The CFPB was planning to level different allegations against Meta than the DOJ did in its 2022 settlement, and the consumer protection agency likely would seek a larger penalty, said sources familiar with the matter.
While the DOJ focused on discrimination in marketing for home loans, the CFPB was prepared to consider how targeted ads might violate consumers’ rights across financial products and potentially violate the Fair Credit Reporting Act, which protects consumers from faulty credit reports.
Critics of Meta have argued that the company should be regulated like a credit reporting enterprise. Meta takes users’ information to create profiles that companies can target with their advertisements. Meta’s critics say this is similar to credit reporting agencies, which use consumers’ spending history to create profiles banks use to determine these individuals’ creditworthiness. The CFPB regulates this industry, which is dominated by Equifax, Experian and TransUnion.
In its investor filing, Meta said the CFPB faulted the company for “alleged receipt and use for advertising of financial information from third parties” and “our related user disclosures and controls.”
Meta’s reference to the allegedly faulty disclosures could refer to the CFPB’s sweeping power to penalize companies for violating “unfair and deceptive” business practices.
In the wake of the Great Recession, lawmakers conceived the CFPB and prohibited “any provider of consumer financial products or services… to engage in any unfair, deceptive or abusive act or practice.”
From its inception, though, Republicans have been critical of an agency that they view as going beyond its statutory powers and not being accountable enough to Congress. In written testimony released before this morning’s hearing, CFPB nominee McKernan, former GOP member of the Federal Deposit Insurance Corporation’s board of directors, echoed his party’s criticism of the agency. But McKernan sounded as if he intended to make sure companies follow the laws the agency oversees.
“Under my watch, the CFPB will take all steps necessary to implement and enforce the federal consumer financial laws and perform each of its other statutorily assigned functions,” he said in the testimony.
