Chopra Appears Before House Financial Services, Senate Banking Committees
On Tuesday and Wednesday last week, CFPB Director Rohit Chopra appeared before both the House Financial Services and Senate Banking Committees to provide the Consumer Financial Protection Bureau’s Semi-Annual Report to Congress.
In his opening remarks, Chopra highlighted six areas where he says the Bureau “refocused its efforts to align with the objectives that Congress set out for the agency.”
First, Chopra said that the Bureau was focusing enforcement on repeat offenders and other major market actors.
“When small businesses violate the law, federal enforcers are often quick to levy crippling sanctions,” he said. “But when larger players repeatedly violate the law, agencies are far more lenient. This is highly inappropriate.”
“During my tenure, the CPFB will not only focus on large actors engaged in widespread harm, but also enforce the law as written,” he said. “I expect that this may lead to more litigation, but also lend greater legitimacy to agency actions.”
Second, Chopra said that the Bureau was enhancing transparency through guidance.
“During my tenure, the CFPB will dramatically increase its issuance of guidance documents, such as advisory opinions, compliance bulletins, policy statements, and other publications,” he said. “These efforts help entities comply with laws passed by Congress by either providing further clarity where needed or drawing attention to an already clear legal requirement. They also promote consistency among the many government actors responsible for enforcement of federal consumer financial law, including other federal regulators and state and tribal Attorneys General across the country.”
Third, Chopra said the Bureau was rethinking its approach to regulations. In this section, he noted that the Bureau “launched a new process to allow the public to more freely exercise the Constitutional right to petition the government.”
“Our new process will allow us to hear directly from the public about the potential regulations that should be developed or amended,” Chopra said.”
Fourth, Chopra said the Bureau was listening and learning from the business community.
“A key priority for me has been to engage with institutions without direct access to the CFPB, including small banks and credit unions,” he said. “The CFPB is also engaging with a broad range of other businesses and associations, including health care providers, automobile dealers, farmers, hotel owners, retailers, and more. While these industries generally engage in business practices that fall outside the scope of the CFPB’s authority, they are deeply affected by the laws the agency administers.”
Fifth, Chopra said the Bureau was promoting competition.
“Competition leads to innovation, attractive rates, quality service, and benefits that may be difficult to quantify,” he said. “But when consumers do not get to select their provider or when switching is complex or difficult, it can lead to stagnation, junk fees, and poor treatment. Indeed, in many markets for consumer financial products and services, like loan servicing and credit reporting, consumers have no choice of provider.”
He noted that the Bureau would be launching initiatives to “identify ways to lower barriers to entry and increase the pool of firms competing for customers based on quality, price, and service.”
Finally, Chopra said that in his first six months as Director, the Bureau was preparing for the era of big tech and big data in banking.
“New technologies and systems can bring us faster payments and new opportunities to connect customers and financial providers,” he said. “During my tenure, the CFPB will be very focused on what the future holds and how we can collectively shape it in ways that align with American values.”
During the back-to-back days of hearings, the Democratic leaders of the committees, Rep. Maxine Waters (D-Calif.) and Sen. Sherrod Brown (D-Ohio) lauded Chopra’s leadership of the Bureau, while the Republicans were opposed to his actions.