New CFPB Chief Rohit Chopra Confirmed by Senate and Takes Immediate Action Against Big Tech Companies | Alston & Bird
On September 30, 2021, the Senate confirmed Rohit Chopra as director of the Consumer Financial Protection Bureau (CFPB) in a 50-48 vote depending on the parties. He was a member of the Federal Trade Commission (FTC) where he sharply criticized big tech companies and advocated for increased restitution for consumers. Previously, he served as CFPB’s ombudsman for private education loans under the leadership of former CFPB director Richard Cordray. Prior to that, he had worked closely with Senator Elizabeth Warren on the creation of the CFPB. In line with its past practices, Chopra’s CFPB has now ordered six major tech companies to provide information regarding their payment platforms.
Expectations for Chopra’s CFPB
President-elect Biden announced Chopra as his choice to lead the CFPB ahead of inauguration day, and the Biden administration then returned his nomination to the Senate in February. Chopra succeeds Kathy Kraninger, who became Director in December 2018 after having served as a senior manager in the Office of Management and Budget. She led the CFPB for two years before the new Biden administration demanded her resignation on January 20. Chopra is expected to aggressively lead the CFPB and trigger a crackdown on the industry. The October 21, 2021 order issued to Big Tech regarding payment products appears to be the first step in this plan. In addition, credit reporting companies, low dollar lenders, debt collectors, financial technology companies, the student loan industry, and mortgage services are some of the financial institutions that should be subject to scrutiny. close scrutiny by Chopra’s CFPB. Prior to the Big Tech investigation, the CFPB, under interim leadership, had already taken the first steps to implement pandemic-era regulations and advance the priorities of the Biden administration. Enforcement practices under former director Cordray are also expected to be re-established under a CFPB led by Chopra.
Following his confirmation, Chopra declared his intention to focus on safeguarding the financial stability of households, echoing previous statements regarding his commitment to ensuring that people under protection from foreclosure or eviction during the pandemic can regain their homes. security of their housing. He also said he intends to take a close look at how banks are using online advertising, as well as to take a close look at data collection practices at banks. In his remarks regarding the market surveillance order issued to Big Tech, Chopra criticized the way companies may collect data and his concern that it could be used to “profit from behavioral targeting, especially around advertising. and electronic commerce ”.
A week later, Chopra delivered remarks at his first congressional hearing as director of the Consumer Financial Protection Bureau. In his prepared statements to the House Committee on Financial Services and the Senate Committee on Banking, Housing and Urban Affairs, he cited mortgage and rent payments, small business continuity, auto debt and upcoming expirations. abstention from the CARES law as problems he intends to solve. address. He also declared his intention to closely monitor the mortgage market and examine foreclosure activity. And, echoing its action a week earlier, Chopra reiterated its intention to take a close look at major technologies and emerging trends in payment processing. Chopra also noted a lack of competition in the mortgage refinancing market and declared its intention to promote competition in the market.
Although appointed for a five-year term, the CFPB director serves at the discretion of the president after a landmark Supreme Court ruling last year.
To take with
Industry participants including credit reporting companies, small lenders, debt collectors, financial technology companies, the student loan industry, and mortgage lenders and real estate agents can expect to further review by the CFPB in the months and years to come. As Chopra settles into his new role, we’ll take a close look at what he turns his attention to next.