In an appointment that will influence the course of consumer protection in the financial marketplace, Joe Biden has nominated Rohit Chopra as director of the CFPB. Chopra has been known to take a firm stand on consumer protection issues.
In an appointment that will influence the course of consumer protection in the financial marketplace, President Joe Biden has nominated Rohit Chopra director of the Consumer Financial Protection Bureau. Chopra is currently a commissioner on the Federal Trade Commission.
Announcing this appointment, as well as those for other key posts Jan. 18, Biden noted, “Our administration will hit the ground running to deliver immediate, urgent relief to Americans; confront the overlapping crises of COVID-19, the historic economic downturn, systemic racism and inequality, and the climate crisis; and get this government working for the people it serves.”
The CFPB was set up by the Dodd-Frank legislation enacted in the wake of the 2008 financial crisis to ensure adequate protections for consumers in negotiating their financial lives, considering the ill-advised mortgage lending practices that fueled the housing market downturn.
See related: Does the CFPB’s task force further consumer protection?
Chopra has previous CFPB experience
Chopra has previous experience with the CFPB as an early hire after the agency was set up, working to further consumer protection in the student loan financing marketplace. He was appointed the agency’s student loan ombudsman, a role that the Dodd-Frank legislation introduced, in 2011. He was also assistant director at the CFPB.
Chopra has also been a special advisor at the U.S. Department of Education. He has served as an FTC commissioner since 2018. Before his government service, he worked in the private sector and has been a management consultant with the global management consulting firm McKinsey & Company.
Chopra has been known to take a firm stand on consumer protection issues. For instance, in a case involving the abusive practice of “debt parking” that the FTC settled with Midwest Recovery Systems in 2020, he weighed in, saying that the FTC’s settlement was too lenient. He was of the opinion that the firm should be banned from the debt collection industry permanently, instead of just being assessed a monetary penalty of $24.3 million, which Midwest Recovery Systems didn’t even have the funds to pay.
See related: What is a collection agency?
Consumer advocates laud the appointment
Consumer advocate groups had not seen the CFPB’s management style under Director Kathleen Kraninger as consumer-friendly. They had protested that the agency was becoming more pro-business rather than protecting consumer interests. Kraninger resigned from her post Jan. 20.
They have evinced more enthusiasm about the appointment of Chopra. For one, Mike Litt, consumer campaign director at the U.S. Public Interest Research Group, said in a media release, “Rohit Chopra has the ideal background for hitting the ground running at the CFPB. He helped build the CFPB from the start, served as its first student loan ombudsman and has most recently been a Federal Trade Commissioner.
“In his government service, he has used all policy levers available to protect consumers from corporate wrongdoers. We couldn’t be happier with his selection to restore the CFPB after three years of disastrous leadership.”
And Ashley Harrington, federal advocacy director at the Center for Responsible Lending, said in a media release, “Commissioner Chopra has long fought for financial markets that are fair for consumers, including student loan borrowers. We are encouraged that the CFPB will now return to its mission of protecting people’s finances, which has heightened significance in this economic downturn, and which includes a strong fair lending program.”
In a statement, Sen. Sherrod Brown, an Ohio Democrat and incoming chairman of the U.S. Senate Committee on Banking, Housing and Urban Affairs, noted, “In his current role as FTC Commissioner, Mr. Chopra has taken on big tech companies for invading our privacy and breaking antitrust laws, as well as manufacturers that have lied about their products being made in the USA. I am confident that Mr. Chopra will not only return the CFPB to its central mission – protecting consumers – but also ensure the agency plays a leading role in combating racial inequities in our financial system.”