WASHINGTON — Rohit Chopra was officially confirmed as director of the Consumer Financial Protection Bureau, signaling a return to more aggressive oversight of financial services companies at the agency.
The U.S. Senate voted Thursday 50-48 to approve Chopra’s nomination on party lines. As CFPB director, he’ll face intense pressure from progressive Democrats, who expect him to revive the agency they say was put to sleep during the Trump administration. If he succeeds in turning the agency around, life may get less pleasant for auto dealerships, banks, credit bureaus, credit-card companies and student and payday lenders.
“The industry didn’t have to dedicate any mindshare whatsoever to the CFPB’s activities for nearly four years,” said Isaac Boltansky, a policy analyst at Compass Point Research & Trading. “But with Chopra taking the chair, the bureau suddenly jumps up to the top of the worry list for most consumer finance companies.”
Chopra has a key ally in Wall Street critic U.S. Sen. Elizabeth Warren, D-Mass., who is credited with helping to conceive the CFPB. The agency was created as part of the 2010 Dodd-Frank Act to protect consumers from abuses that were common in the run-up to the 2008 financial crisis. It has since become one of the most politically-charged financial regulators in Washington as Republicans and Democrats continue to fight over whether it should even exist.
Chopra previously served as the bureau’s assistant director and was its first student loan ombudsman before he was nominated to serve on the Federal Trade Commission in 2018. He testified before the Senate Banking Committee earlier this year that he intends to focus on the economic impact of the pandemic that’s left millions of Americans in financial ruin, particularly in communities of color.
His top priorities may also include revitalizing the CFPB’s fair lending and equal opportunity office, which is responsible for policing discriminatory lending practices, according to Allyson Baker, a partner at Venable LLP. The division has became dormant in recent years, Baker said.
“You’re going to see a lot of concerted inter-agency actions, activities and guidance come out — both formal and informal — with him at the helm of the bureau,” said Baker, who chairs the firm’s financial services practice.
The road to confirmation has been uncertain. Earlier this year, after the Banking panel voted 12-12 in a partisan vote, it was unclear if Chopra’s nomination would advance. Democrats want the CFPB to be an aggressive Wall Street watchdog while Republicans argue the agency has too much power that goes unchecked.
Former President Donald Trump’s appointee Kathy Kraninger, who resigned in January at President Joe Biden’s request, scaled back the CFPB’s enforcement actions during her tenure.