CFPB Head Chopra: Agency to Focus on ‘Large Players,’ Repeat Offenders
A credit union advocacy group was among those to weigh in on the CFPB director's testimony before the Senate Banking Committee. Learn why.
A major credit union advocacy group was among those to weigh in on what has become another politically polarizing issue.
Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra said Tuesday he intends to refocus the agency’s enforcement efforts to concentrate on “large players” and repeat offenders of consumer protection laws.
“The CFPB is shifting enforcement resources away from investigating small firms and instead focusing on repeat offenders and large players engaged in large-scale harm,” Chopra laid out in his semi-annual testimony before the Senate Banking Committee.
For example, Chopra explained, the CFPB has filed lawsuits against both FirstCash and TransUnion, two companies he said continued to violate consumer protection laws even after being sanctioned over past abuses.
Chopra also noted the CFPB will dramatically increase the issuance of guidance documents, such as advisory opinions, compliance bulletins, policy statements, and other publications.
“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,” Chopra said. He added he is also concerned that regulations issued by federal banking regulators are overly complicated, noting he has directed agency staff to place a higher premium on simplicity.
Factious Response from Politicians
In comments and questions posed by members of the Banking Committee, senators were sharply divided along partisan lines. Democrats praised Chopra’s work at the agency, while Republicans alleged he was attempting to exceed his statutory authority in a variety of ways.
Banking Committee Chairman Sen. Sherrod Brown, D-Ohio, said the director was a welcome change from the Trump Administration’s CFPB, which favored corporations over workers. “American workers need a strong Consumer Financial Protection Bureau on their side,” Brown stated. “With you at the helm, they finally have one again.”
However, Banking Committee ranking Republican Sen. Patrick Toomey, R-Penn., differed sharply. “The CFPB began its existence under the Obama administration as a lawless and unaccountable agency,” he charged. “Unfortunately, under Director Chopra, the CFPB is more out of control than ever before. It’s once again pursuing a subversive far-Left agenda by abusing—and exceeding—its authorities.”
Republicans denounced Chopra in particular for exceeding his authority in defining the agency’s power to take action against financial services providers under its Unfair, Deceptive or Abusive Acts or Practices power.
They further accused Chopra and Acting Federal Deposit Insurance Corp (FDIC) Chairman Martin Gruenberg of an illegal power play that resulted in the resignation of former FDIC Chairwoman Jelena McWilliams. They claimed Chopra, a member of the FDIC board, and Gruenberg had tried to force the agency to solicit comments on bank merger issues, over McWilliams’ objection.
Sen. John Kennedy, R-La., summed up the GOP position on Chopra’s tenure, telling the director: “Nothing you do over there makes sense.”
How Credit Union Group View the CFPB
In preparation for the hearing, Brad Thaler, vice president of legislative affairs at the National Association of Federally-Insured Credit Unions (NAFCU), sent Banking Committee members a letter renewing longstanding criticism of the agency.
He said the CFPB should use its power to exempt certain types of financial institutions from specific regulations, writing: “CFPB could do more to recognize that not all financial institutions operate the same way by tailoring its regulations to provide exemptive relief based on those differences.”
In addition, he renewed NAFCU’s call for Congress to transform the CFPB from single-director control to a commission. “Regardless of how qualified one person may be, including the current leadership of the Bureau, a commission would allow multiple perspectives and robust discussion of consumer protection issues throughout the decision-making process,” Thaler wrote.