The Senate confirmed Rohit Chopra to be director of the Consumer Financial Protection Bureau, installing an agency veteran and former FTC official with a reputation as an aggressive regulator.
The Senate vote on Thursday was 50-48, with all Republicans opposing his nomination.
“Rohit will hit the ground running. He knows the agency, knows how to build support for agency actions, and will be swimming with the current of many like-minded CFPB staff,” said Michael Gordon, a partner at Bradley Arant Boult Cummings LLP and a former top CFPB official.
Chopra, a former consumer advocate, helped establish the bureau in 2010 alongside Sen. Elizabeth Warren (D-Mass.) after the financial crisis. He later served as the bureau’s first student loan ombudsman under former Director Richard Cordray.
In 2018, Chopra became a Democratic member of the Federal Trade Commission, where he pushed for tougher penalties against large technology companies.
President Joe Biden announced plans to nominate Chopra days before his Jan. 20 inauguration, but the pick faced strong opposition from Republicans. The Senate Banking Committee in March split evenly on his nomination, with all 12 GOP members opposing it.
As a result, Chopra’s confirmation required three Senate votes, including a motion to discharge his nomination from the divided banking committee. Vice President Kamala Harris broke a 50-50 tie on Chopra’s cloture vote earlier Thursday.
Chopra is walking into a CFPB that saw a significant drop in enforcement during the Trump administration.
Chopra told senators in March that the CFPB would have a more aggressive enforcement unit under his direction, with a focus on fair lending and racial equity. He also vowed tougher oversight of credit bureaus, mortgage servicers, and student loan servicers for compliance with pandemic relief measures that provide loan forbearance and other assistance to struggling consumers.
“If anyone thought the CFPB was sleepy before, the bear has awoken,” said Allison Schoenthal, a partner in Goodwin Procter LLP’s consumer financial services practices.
Open Banking, Small Biz Lending
Chopra also faces a mountain of regulatory issues at the CFPB.
Biden has asked the CFPB to work on “open banking” rules that could make it easier for consumers to access their banking data and transfer it to other institutions, including fintechs.
The CFPB released a proposal for surveying potential discrimination in small business lending in August and will soon have to wade through comments as it completes the rulemaking process.
The CFPB also is mulling changes to lending standards for safer “qualified mortgages,” and could reexamine debt collection rules put in place by former CFPB Director Kathy Kraninger, a Trump appointee. The bureau in April proposed delaying the implementation date for the debt collection rules until next year.
Chopra also faces calls to revive tougher payday lending rules enacted in 2017 by his former boss, Cordray. The CFPB under the Trump administration removed provisions that forced payday lenders to assess borrowers’ ability to pay back loans.
“The incoming director has spoken in support of continuous monitoring of the consumer financial market and vigorous enforcement of consumer laws,” said Christine Hines, the legislative director for the National Association of Consumer Advocates. “These are large and significant areas for the new director to work on during his term at the CFPB.”
Chopra also will have to make some key hiring decisions, including a new enforcement director, Schoenthal said.
The CFPB recently named Jan Singelmann, a former Senate Banking Committee staffer and CFPB enforcement attorney, its new chief of staff.
Chopra will be pressed to move quickly on regulatory and enforcement changes at the agency, Gordon said.
The U.S. Supreme Court’s June 2020 decision in Seila Law LLC v. CFPB gave the president the power to fire the CFPB director at will. As a result, Chopra may only have three years to enact his agenda should Democrats fail to hold the White House in 2024.
“CFPB rulemaking resources are limited, and the new rules wishlist of advocates and congressional Democrats are long,” Gordon said.