President Biden has appointed Rohit Chopra as the chief overseer of the country’s financial needs. eight months back. On Thursday, he finally overcame Republican opposition and was approved as the new head of the Consumer Financial Protection Bureau.
Although Chopra, a former CFPB assistant director and member of the Federal Trade Commission, is highly qualified to serve as a director, the Republican senators did not make it any easier for him (perhaps because he is deeply prepared for the position).
In a preliminary vote, all 50 Republican senators voted against Chopra, and all 50 Democrats and Independent MPs voted for him. Vice President Kamala Harris ended the draw with a vote in favor of Chopra.
In the final tally of confirmation, Chopra won 50:48. Republicans Rand Paul of Kentucky and John Cornin of Texas did not vote.
This is a big deal for consumers because we have hardly worked with the consumer protection agency that Congress authorized in 2010 for the past four years.
Under former President Trump, the CFPB ditched its watchdog role, focusing instead on “teaching” people how to better manage money.
In other words, we were no longer trying to protect us from abuse by banks, payday lenders, and other financial firms.
“During Trump’s rule, the CFPB had little or no control over the industry it regulated,” said Remington Gregg, an advocate for Public Citizen’s advocacy group.
“Under Rohit Chopra, the city has a new sheriff,” he told me. “We are confident that protecting consumers from predatory lenders and corporate fraud will be his top priority.”
That same Thursday I heard from other consumer advocates.
Sally Greenberg, executive director of the National Consumer League, told me that Chopra is “perfect to lead this hugely important consumer advocacy agency.”
It’s true that. He has a wealth of CFPB # 1 experience along with a proven track record in consumer advocacy.
“The US government no longer has a qualified candidate for this position,” said Jamie Court, president of Consumer Watchdog, a Los Angeles-based advocacy group.
“He helped create the agency and turn it into a tiger with teeth,” Court said. “He’s going to be a tough cop with a big stick.”
Chopra’s predecessor at the CFPB under Trump was Katie Kreninger, who had no experience in consumer protection before being handed over to her in 2018.
Her approach was to tell consumers that their work to take care of yourself.
“Empowering consumers to help themselves, protect their interests, and choose the financial products and services that best suit their needs is vital to preventing consumer harm and improving financial well-being,” Kreininger said in his 2019 keynote.
Another way to prevent consumer harm and improve financial well-being is to make sure financial companies comply with the law and treat people fairly – the CFPB’s core mission.
But the coercive measures and fines imposed by the agency hit Trump.
In fiscal 2020, which lasted last September, many of the CFPB’s penalties were little more than a joke. Of the 34 fines collected, 13 were of $ 10 or less. Ten were for just $ 1.
Jokes aside. Dollar.
Is it any wonder that Republican senators are so reluctant to put Chopra in charge? Financial firms donated nearly $ 82 million to GOP senators last year – about double what they gave Democrats, according to OpenSecrets, which tracks political money.
The Trump years were like Christmas for CFPB-controlled companies. Perhaps nothing makes this clearer than the CFPB’s January 2020 announcement that it will no longer hold financial companies accountable for customer abuse.
Trump’s CFPB argued that even though the federal law that created the bureau explicitly mandated it to prevent abusive behavior, “uncertainty remains about the extent and significance of the abuse.”
Just enjoy it for a moment. Our Chief Financial Observer calmly stated that it was too difficult to know if what was quacking like a duck was really a duck.
Before Trump came to power, the CFPB returned nearly $ 12 billion to consumers who were abused by financial institutions.
In March, the Biden administration overturned Trump’s blunt no-abuse stance.
It reminded the financial industry that abusive behavior includes “unreasonable use of someone who cannot defend themselves” and “unreasonable use of someone who relies on a company to act on their behalf.”
Oh yeah, it is (hello Wells Fargo!).
Hopefully there will be no such confusion with Chopra at the helm of the CFPB.
“Previously at the bureau, he has the knowledge and experience to guide the agency on its top priority – consumer protection,” said Linda Sherry, director of national priorities for Consumer Action.
Chopra is expected to intensify CFPB enforcement over his five-year term and focus specifically on private student lending institutions and lending institutions. Previously, he worked as an Ombudsman for a student loan agency.
Mike Litt, spokesman for the US Public Interest Research Group, noted that Chopra stressed during the confirmation hearing that he will provide consumer protection as the economy recovers from the COVID-19 pandemic.
“He also talked about the longstanding problems consumers faced in the market before the pandemic, such as errors in credit reports and debt collection harassment,” Litt said. “We agree with these priorities.”
Carl Tobias, a professor of law at the University of Richmond, told me that “the CFPB, which was essentially dying in the Trump years,” and Chopra will probably now put the agency back on track.
“Examples of problems that he could focus on are payday lending and inflated overdraft fees on checking accounts,” predicted Tobias.
Either way, consumers can be comforted by the fact that someone is again serious about their financial well-being.
It took a long time.