Consumer Bureau chief confirmed in close Senate vote
The Senate confirmed on Thursday that Rohit Chopra would lead the Office of Consumer Financial Protection in a 50-48 vote that overcame objections from Republicans who said he would exercise the office’s extended powers to pursue an anti -business.
Mr Chopra, 39, was recently commissioner of the Federal Trade Commission, which he often criticized for what he saw as a reluctance to crack down on violators. Facebook and Google were particular targets of his anger; citing “the endless scandals involving big tech companies,” he called for much larger financial penalties and tighter constraints.
As a director chosen by President Biden, Mr. Chopra will return to an agency he helped build. Congress created the Consumer Financial Protection Bureau ten years ago with a simple mission: to regulate financial companies and protect consumers. The original idea of Senator Elizabeth Warren, who lists it in his Twitter biography as one of her children alongside her two human offspring, she set out to crack down on the types of abuse that led to the mortgage crisis of 2008 and the economic crash that followed. The office quickly became one of Washington’s most feared and aggressive regulators.
“CFPB is a young agency, and you see it warping itself on the basis of leadership,” said Ashley Taylor, partner at Troutman Pepper, who specializes in consumer finance regulation and enforcement. “The person at the top makes a huge difference. “
Mr. Chopra worked in the office’s development team, then became Deputy Director, serving as the Senior Student Loans Ombudsman until 2015. In that capacity, he lobbied for better guarantees and more active federal student loans policy as it skyrocketed into a market of over $ 1,000 billion.
“He’s really part of the original Elizabeth Warren team who was there early on and lifted the agency up and had a great vision for what it was supposed to do,” said Rachel Rodman, a former lawyer. of the application to the office which is now a partner. at the law firm Cadwalader, Wickersham & Taft. “I see this as a throwback to those times and those priorities after the Trump administration was shut down.”
Republicans have often demonized the Office of Consumer Affairs because of its ability to reshape industries by rewriting their rules and punishing those who push the boundaries. Sen. Patrick J. Toomey of Pennsylvania, the leading Republican on the Banking Committee, said he was concerned Mr. Chopra would refer the office to the “lawless, overbreadth and highly politicized agency that it was under the Obama administration “.
To advance Mr Chopra’s nomination to the final vote, Vice President Kamala Harris broke the tie in a procedural vote. She also broke dead ends to confirm Jennifer Abruzzo, who in July became general counselor of the National Labor Relations Council, and Kiran Ahuja, who became director of the Personnel Management Office in June.
Another area where observers expect significant action is the expanded enforcement of fair loan laws. During his nomination hearing in March, Mr Chopra said he was concerned about the privacy and security of data collected by technology companies and financial service providers, and the risk of bias in algorithmic systems that increasingly determine lending decisions.
Mr Chopra’s office is also likely to play a leading oversight role on the burgeoning sector of non-bank financial technology companies that issue mortgages, student loans and other credit products.
“Agencies want to be relevant, and with a director who isn’t afraid to extend the authority of the office, the CFPB could really shape that space,” Ms. Rodman said.
The Office of Consumer Affairs has swung like a pendulum between extremes in recent years. Under the leadership of its original director, Richard Cordray, the agency overhauled mortgage lending rules, sued hundreds of businesses, and extracted nearly $ 12 billion from businesses in the form of canceled debts and consumer repayments. When Mr Cordray left in the fall of 2017, President Donald J. Trump installed Mick Mulvaney, who, as interim manager, restricted the office’s enforcement arm and drastically cut back on his work.
He was replaced by Kathleen Kraninger, a less spirited executive who shared Mr Mulvaney’s aversion to tighter financial regulation. She criticized the office for “push the envelope” and gutted a planned rule that would have limited payday loans.
But a Supreme Court ruling last year gave the president the power to fire the director of the Consumer Financial Protection Bureau at will, and Mr Biden used that authority to oust Ms Kraninger in January. Since then, the office has been headed by an Acting Director, Dave Uejio, who worked there for nine years and most recently served as Director of Strategy.
To replace Mr. Chopra at the Federal Trade Commission, Mr. Biden has appointed Alvaro Bedoya, an online privacy expert.