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Chopra testifies before Senate Banking Committee

Federal Issues CFPB Senate Banking Committee Hearing CFPB Succession Covid-19

Federal Issues

On March 2, FTC Commissioner Rohit Chopra testified before the Senate Committee on Banking, Housing, and Urban Affairs where he was asked about his plans should he be confirmed as the permanent CFPB director. Chopra released prepared remarks in which he discussed challenges stemming from the Covid-19 pandemic, specifically those related to loan defaults, auto repossessions, credit reporting, debt collection, and foreclosures. Highlighting the need for “fair and effective oversight” in the mortgage market, Chopra also emphasized the importance of addressing systemic inequities faced by families of color. In opening remarks, Senator Sherrod Brown (D-OH), in support of Chopra’s nomination, highlighted several of Chopra’s previous achievements at the Bureau as its first student loan ombudsman and emphasized his “strong record of protecting consumers and small businesses, promoting competitive markets, and holding bad actors accountable.”

Chopra fielded questions from Committee members on a range of topics, including credit reporting, student lending, servicemember protections, and mortgage lending. Chopra stressed his commitment to improving the “transparency, efficiency, and effectiveness” of the Bureau’s supervision and enforcement programs. He further emphasized the need to combat lending discrimination and that fair lending enforcement will be a priority for the Bureau, noting that the Bureau’s Fair Lending and Equal Opportunity office “is established by Congress and [] should play a critical role in making sure the law is being followed.” With respect to credit reporting and debt collection, Chopra stated, “[I]f there are unlawful, egregious practices, it is important for enforcement to make sure that they stop. . . .[T]hat’s what’s best for consumers, that’s what’s best for the honest market participants and that’s the role Congress has asked the CFPB to play.”

With respect to fintech, Chopra said the Bureau needs to “take a hard look” at large technology companies’ expansion into financial services and their potential impact on consumer privacy and data security. He also raised concerns about the potential for bias in algorithm decision-making and underwriting. “[L]ooking at how big data, particularly by large platforms who have detailed behavioral data on all of us is something we must carefully look at. Because, it will change financial services fundamentally,” Chopra stressed. He also discussed the importance of providing restitution for consumers, reaffirming his commitment to ensuring that companies found to have committed violations of law are required to repay consumers for what was taken. “[W]hen victims of fraud and misconduct are not made whole, that doesn’t just hurt them. It also hurts every other business who is trying to follow the law and treat them [] the right way,” Chopra stated.

If confirmed by the Senate Banking Committee, Chopra’s nomination will head to the full Senate for a vote.

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