WASHINGTON–The nominee to lead the Consumer Financial Protection Bureau told a Senate hearing he has learned the lessons from a decade ago, and that fair and effective oversight of the mortgage market can promote a “resilient and competitive financial sector” while also addressing racial inequities.
But at least one senator made clear he wasn’t receptive to the message from nominee Rohit Chopra, whose history, the senator said, includes making harmful allegations about credit unions that later proved to be untrue.
“Based on Commissioner Chopra’s record, I’m concerned he’d return the CFPB to the hyper-active, law breaking, anti-business, unaccountable agency it was under Obama Administration,” said Sen. Pat Toomey (R-PA).
Toomey, pointing to Chopra’s previous stint at the CFPB as the agency’s student loan ombudsman, further suggested, “In that role, he was known to have a hostile relationship with many lenders and used ‘name and shame’ tactics to pressure them. In one such case, he took a shoot first, aim second approach to the facts by posting online inaccurate allegations about several credit unions without checking with them first. CFPB had to retract the allegations.”
An ‘Important Test’
For his part, Chopra told the Senate Banking Committee that “We saw how unlawful and avoidable foreclosures proved to be catastrophic in cities, small towns, and rural areas alike, contributing to deeper social divisions and inequities.”
In his remarks Chopra said the United States again faces “an important test to ensure that troubles in the housing market do not sabotage the recovery of our local economies,” and that the enforcement of consumer protection laws can help families better understand their options and save their homes.
“Congress has entrusted the Consumer Financial Protection Bureau with carefully monitoring markets to spot risks, ensuring compliance with existing law, educating consumers, and promoting competition,” he said. “This not only helps to protect Americans from fraud and other unlawful conduct, it also ensures that law-abiding businesses, regardless of size, can compete.”
Prior to Chopra’s testimony, Senate Banking Committee Chairman Sherrod Brown (D-OH) said in opening comments that the Bureau was created by Congress “to be a voice for all Americans who too often don’t have one in Washington.”
‘Deep Understanding’ Cited
Brown expressed support for Chopra, whom he said has a deep understanding of financial markets and a strong record of protecting consumers and small businesses, promoting competitive markets, and holding bad actors accountable.
Credit unions have been expressing concerns about a new direction by the CFPB, which dialed back its enforcement and other activities under the Trump administration. As CUToday.info has reported, the agency publicly announced it is seeking to hire more attorneys as part of more “vigorous” enforcement.
The vote on Chopra’s nomination is expected to be largely along party lines, with Toomey among those strongly opposed to his nomination and the future direction of the agency.
‘Drove Up Cost of Credit’
“Under President Obama, the CFPB pursued an activist anti-business agenda that limited consumer choice, drove up the cost of credit, and hamstrung job creators through overregulation,” Toomey said. “The CFPB repeatedly engaged in overreach and abuse of its authorities. For example, it took a ‘regulation by enforcement’ approach that the D.C. Circuit held violated the bedrock principles of due process; it routinely overstepped its jurisdiction, like investigating for-profit-college accreditation, which the courts shut down; and it used public pressure tactics to ‘name and shame’ businesses, like publishing unverified consumer complaints.”