Nearly 10 months after being nominated by President Joe Biden, the U.S. Senate yesterday confirmed Rohit Chopra as director of the Consumer Financial Protection Bureau (CFPB).
The Senate voted 50 to 48 to confirm Chopra, who was instrumental in setting up the bureau following the 2010 passage of the Dodd-Frank Act authorizing its creation. Chopra, who served as the CFPB’s first student loan ombudsman, was nominated by then President-elect Biden in January.
Franzen & Salzano President Loretta Salzano said the choice of Chopra has many pundits predicting a “back to the future” enforcement climate.
“Those in the know expect the CFPB to rely on claims of unfair, deceptive and abusive acts and practices when theories of technical compliance are tenuous,” Salzano said. “Plus, aggressive litigation on all fronts is predicted – perhaps even more than under the CFPB’s first director, Richard Cordray. Do not be surprised to see the CFPB sue those clearly under its jurisdiction and also to expand its reach.
“And when the CFPB increases its reach, it sets the tone for other regulators, both federal and state. Not without warning, the FDIC has been digging in on RESPA Section 8 enforcement. Many states have already formed their own mini-CFPBs which could be a trend. Long before these new mini-CFPBs, we’ve witnessed a closer look for RESPA Section 8 violations by state regulators. Both federal and state examiners are scrutinizing even small players, so while it is reasonable for smaller companies to consider risk of detection when contemplating strategies to compete for business, no one is safe.”
She added some are expecting Chopra to pursue personal liability against principals of offending companies.
Richard Hunt, president and CEO of the Consumer Bankers Association, said his organization looks forward to working with Chopra.
“Since its inception, the Consumer Financial Protection Bureau has suffered from a constant political pendulum swing,” Hunt said. “It’s my hope that Director Chopra will engage all stakeholders to help improve the clarity and longevity of the bureau’s rules, rather than establishing new policies solely through enforcement actions, which will greatly harm the consumers our banks aim to serve.”
Chopra is best known for his efforts to reform the student loan system. In 2018, the U.S. Senate confirmed Chopra as a commissioner on the FTC.