(Oct. 29, 2021) Stimulating greater competition in consumer financial markets, sharpening focus on repeat offenders, and restoring “relationship banking” make up the “path forward” for CFPB, its director told a House committee this week.
Appearing before the House Financial Services Committee, Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra outlined the focus for the agency during his term. He was sworn in Oct. 12 for a five-year term (after Senate confirmation Sept. 30), subject to the will of the president. (Chopra appeared before the Senate Banking Committee this week also, repeating the goals he outlined before the House panel.)
“The CFPB intends to faithfully and fairly administer the consumer financial laws entrusted to the agency by Congress,” Chopra said. “We must use our tools to promote an equitable and inclusive recovery,” he added, referring to the economic condition of the country.
In stimulating “greater competitive intensity,” Chopra asserted that there are many places where greater competition would benefit households and businesses. “For example, I am concerned that there is a dearth of competition in the mortgage refinance market for families with lower balance mortgages,” Chopra said. “The lack of refinancing may disproportionately affect communities of color and others that are historically disadvantaged.”
Regarding credit card and savings interest rates, the CFPB director hinted the bureau would be looking at those areas. “There is also evidence to suggest that many Americans could be paying lower interest rates on their credit cards or earning higher interest rates on their savings,” he said.
He also said the agency would keep “a close eye on practices that might impede competition.” Chopra said the bureau would listen to local financial institutions and “nascent competitors” on the obstacles they face when challenging more dominant players, “including in big tech.”
In sharpening focus on repeat offenders – especially those that violate agency for federal court orders – Chopra said those who violate orders and cause “ongoing harm to families and low-abiding businesses” must be stopped. He said his agency intended to work closely with state regulators and other federal banking agencies (such as the OCC) to “fashion appropriate remedies for repeat offenders.”
In restoring relationship banking, Chopra indicated that automation and algorithms more and more define the consumer financial services market. He charged that results in less transparency into how credit decisions are made. In some cases, he added, those “big data” practices “can unwittingly reinforce biases and discrimination, undermining racial equity.”
He also tied credit reporting, and other industries, to his call for restoring relationship banking, charging that consumers are often not the customer and lack leverage to get problems fixed. “The inability to cut through red tape and get help in one’s financial life can be a major obstacle when seeking a job or when applying for credit,” he said. “Preserving relationship banking is critical to our nation’s resilience and recovery, particularly in these times of stress.”
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(Oct. 15, 2021) The CFPB has a new, permanent director (for a five-year term, at least – or until the president decides to make a change), who this week also installed a new, senior staff full of former bureau workers.
Rohit Chopra was sworn in Tuesday as the latest leader of the bureau, becoming the fifth permanent or acting director since the agency’s creation in 2011. He was confirmed by the Senate Sept. 30 for the job. In a letter to all agency employees (as well as the boards of the Federal Reserve and FDIC (on whose board he sits as CFPB director)), Chopra said the agency and its workers must use their tools to promote competition and shift market power toward consumers and law-abiding businesses.
“We must strive for a marketplace where families are treated fairly and can seek help when they’re in trouble,” Chopra wrote. “And most importantly, we must anticipate emerging risks so we can act before a crisis, rather than acting after it is too late.”
The next day, Chopra announced he was naming four individuals to serve in senior posts — deputy director, associate director for consumer education and external affairs, chief of staff, and chief technologist – three of whom previously served at the agency. They (and their latest positions) are: Zixta Q. Martinez, as deputy director; Jan Singelmann as chief of staff; and Erie Meyer as chief technologist.
Karen Andre, who most recently was President Biden’s special assistant for economic agency personnel, was named associate director for consumer education and external affairs.
LINK:
Chopra letter: The CFPB is looking out for families, workers, and communities
CFPB Names Key Senior Positions
(Oct. 1, 2021) Rohit Chopra is now the permanent director of the CFPB, with a five-year term, thanks to a 50-48 vote by the Senate on Thursday. He took a big step toward that vote earlier in the day when the Senate voted 51-50 – with Vice President Kamala Harris casting the tie-breaking vote – to cut off debate and proceed to the final vote on confirmation. Chopra replaces acting director Dave Uejio – who himself has been nominated to be assistant secretary for fair housing and equal opportunity at the Department of Housing and Urban Development (HUD) … NASCUS President and CEO Lucy Ito will be on the panel discussing “How to Increase Gender Diversity in the C-Suite” Nov. 3 (at 2:15 p.m.) as part of NCUA’s Nov. 2-4 Diversity, Equity and Inclusion (DEI) Summit. The panel – made up of all female credit union executives – will discuss successes and setbacks on their paths to leadership, according to NCUA. They will also discuss how to increase gender diversity in the upper ranks of financial institutions. Other panelists include CEOs of NASCUS-members Orange County’s CU and Navy Federal CU – Shruti Miyashiro and Mary McDuffie, respectively.
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(March 12, 2021) A policy unveiled early last year by CFPB that limited the extent of the agency’s response to certain abusive acts or practices affecting consumers was rescinded Thursday, the bureau announced. CFPB said it intends now to “exercise its supervisory and enforcement authority consistent with the full scope of its statutory authority under the Dodd-Frank Act as established by Congress.” The release said the bureau intends these changes “to better protect consumers and the marketplace from abusive acts or practices, and to enforce the law as Congress wrote it.” Then-Director Kathleen Kraninger originally set the policy in place last year … Nellie Liang – a nominee for the Federal Reserve Board in 2018 (but whose nomination was never considered by the Senate Banking Committee, let alone the full Senate) – will be nominated as Treasury undersecretary for domestic finance, the White House said Thursday. The position is responsible for a wide variety of policy, including that for credit unions, banks and other financial institutions. Liang, an economist, is a former top Fed staff member … Meanwhile, the nomination of Rohit Chopra to be the next director of the CFPB received a tie vote this week in the Senate Banking Committee on a recommendation by the committee for confirmation. The tied recommendation will proceed, however, to consideration by the full Senate under rules adopted by the Senate early this year … NCUA and the federal banking agencies Thursday released a proposed list of 24 questions and answers addressing the private flood insurance provisions of the 2012 Biggert-Watters Flood Insurance Reform Act. Comments are due in 60 days. The proposal includes some references to a set of Q&As proposed last year and published July 6 in the Federal Register. Those Q&As only included two on private flood insurance, the agencies noted, adding that the rules for private insurance had just been finalized in 2019. The regulators said they plan to publish a final document in the Federal Register that will consolidate Thursday’s proposed private insurance Q&As with the 2020 proposed Q&As.
Agencies Release Proposed New Interagency Questions and Answers Regarding Private Flood Insurance
(March 5, 2021) Saying he looks forward to approaching with an open mind the mission of the CFPB, director nominee Rohit Chopra told a Senate panel this week that fair and effective oversight of the mortgage market can promote a “resilient and competitive financial sector” while also addressing racial inequities.
Testifying before the Senate Banking Committee during a hearing on his nomination, Chopra said during the last economic crisis of 10 years ago, “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.”
He said the country again faces “an important test to ensure that troubles in the housing market do not sabotage the recovery of our local economies.”
During questions and answers, Chopra said he also has an open mind about changes to qualified mortgage (QM) rules. He said he would look to what the statute says and what Congress’ goals are as the bureau reviews the rules. (See additional story, below.)
Last week, Acting Director Dave Uejio released a statement that the agency is considering revising or outright revoking the “seasoned QM” rule (which applies to portfolio loans meeting certain performance requirements over a 36-month seasoning period, including having no more than two delinquencies of 30 or more days and no delinquencies of 60 or more days). The bureau also said it “expects to shortly issue” a proposal that would delay the July 1 mandatory compliance date for the general QM rule.
Chopra, during his appearance before the panel, said the bureau won’t dictate financial policy. When it comes to QM, he said, “it is important that we balance the consumer protections that Congress has put into place with access, including for rural and other areas.”
LINK:
Rohit Chopra, opening statement before Senate Banking committee (March 2, 2021)
(Jan. 22, 2021) There was more change this week in Washington as Consumer Financial Protection Bureau Director Kathleen (“Kathy”) Kraninger resigned Wednesday, shortly after President Joe Biden took the oath of office.
Kraninger had served about 25 months of a five-year term that began in 2018. She was succeeded by Dave Uejio, the chief strategy officer of CFPB since 2015, who is now the bureau’s acting director. Biden made the appointment later in the day Thursday.
In her resignation letter addressed to Biden, Kraninger said she supports “the Constitutional prerogative of the President to appoint senior officials within the government who support the President’s policy priorities, which ensures our government is responsive to the will of the people.” She said she wished the best for new president and the nation going forward.
Meanwhile, Biden has nominated former CFPB Assistant Director Rohit Chopra to be the next director. Since 2018, he has been a member of the Federal Trade Commission (FTC). Chopra has made a name for himself as an advocate for fair student lending, including serving as student loan ombudsman while at the agency (a post mandated by the Dodd-Frank Act). Chopra was also instrumental in “standing up” the agency in 2011 after its creation.
If ultimately confirmed by the Senate, Chopra would be the fourth CFPB director or acting director. Richard Cordray was the first, followed by Acting Director John (“Mick”) Mulvaney, and then Kraninger.
In the meantime, Acting Director Ueijo is apparently ready to work: In a memo to staff Wednesday, he said he will take action quickly. “The magnitude of the challenges facing the country is simply too great to wait,” Uejio reportedly wrote.