PIMCO’s Challenge Forces a Strategic Retreat
At the heart of the rollback sits investment titan Pacific Investment Management Co. LLC (PIMCO). The firm, which manages funds holding notes in the trusts, appealed the settlement to the Third Circuit, arguing that the terms threatened the contractual rights of noteholders and were agreed to without proper trust authority.
The appellate court steered the dispute into mediation, and what followed was described by all sides as a “fair compromise”—but one with a price: eliminating the settlement’s broad “prospective and injunctive provisions.”
Without those cuts, parties warned, the chance for a final resolution could collapse entirely.
A Calculated CFPB Shift
According to the filings, the CFPB now views the pared-down judgment as aligned with its “current enforcement priorities,” a phrase signaling the agency’s broader pivot under new leadership.
Since February, the administration has dismantled much of the CFPB’s prior enforcement portfolio and slashed its resources. The agency has even warned that it may soon be unable to continue normal operations as funding dwindles.
Against that backdrop, the rollback appears not only strategic—but necessary.
