The Senate Committee on Banking, Housing, And Urban Affairs conducted a hearing on March 2 to consider the nomination of Rohit Chopra for Director of the Consumer Financial Protection Bureau, as well as Gary Gensler’s for the Securities and Exchange Commission and
The two men are the first of President Biden’s financial regulators to face the Senate’s scrutiny.
Throughout the hearing, Chopra faced questions about how he would address what some senators see as shortcomings of the CFPB under the Trump administration.
“My question is, what would you do to address those who were harmed in the previous administration, when the CFPB, who wasn’t as functional as I would have liked and didn’t take the action that they should have, and how are you going to make a determination on who and what cases you’re going to take a look at,” asked Sen. Jon Tester (D-MT), who was specifically concerned about veterans.
Chopra responded by assuring Sen. Tester that he was carefully listening when it comes to mortgage and housing issues for veterans.
“We saw a decade ago the illegal foreclosures of active duty service members; you even had families flying back from overseas to take care of some of these issues… I think most financial institutions want to stay on top of it, but there are some who you know have we have seen have flouted the law when it comes to the service members,” responded Chopra.
Sen. Elizabeth Warren (D-MA), a key player in the creation of the CFPB, also questioned Chopra about how he would remedy what she saw as failures from the last administration. Sen. Warren believes that the Trump administration failed to enforce fair lending laws.
“[Mick Mulvaney] stripped the attorneys of enforcement power, and, no surprise, enforcement actions plummeted, so can you talk about your own plans for holding banks and financial companies accountable for discrimination,” inquired Sen. Warren.
Chopra said he does not believe agencies should nullify congressional action.
“We should enforce the laws that have been delegated to us, and it is particularly important when it comes to anti-discrimination… we need to make sure that we’re offering a robust way to understand how they can comply and hold them accountable,” replied Chopra.
Senators also asked about student loan debt and the consumer protections the CFPB could offer students. The federal moratorium on debt payment is set to expire under Chopra’s tenure should he be confirmed.
“The CFP has to make sure it is doing its job to make sure the law is being followed when it comes to lending, when it comes to servicing, when it comes to debt collection. I want to reengage with the states with the Department of Education, if confirmed, to make sure that those borrowers are not set more behind. This has implications for an entire generation, but also the issue you raise about the racial wealth gap; it’s very, very critical that we get this right,” replied Chopra.
Sen. Robert Menendez (D-NJ) also inquired into debt, focusing on the CFPB’s authority to oversee the massive amount of student loan debt that Americans have accumulated.
“We are in the midst of a full-blown student debt crisis with 43-million of our fellow citizens owing $1.5 trillion in student loan debt, and instead of helping provide relief to those by regulating a student loan market plagued by harmful practices, our country’s consumer watchdog was asleep at the wheel from my perspective, for the last four years… As the lead consumer watchdog, does the CFPB have authority to oversee and supervise that 1.5 trillion dollars worth of consumer debt, including debt owed to the federal government,” asked Sen. Menendez.
Chopra explained that existing laws and regulations cover student debt issues as consumer financial products and services.
“It’s one of the biggest consumer credit markets in our country after mortgages, and we have to make sure that the law is being followed. I have seen some real improvements over the last decade in the activities of some of these firms, and I hope that that continues, and I hope that there are high levels of compliance with the laws that Congress has passed,” responded Chopra.
Access to credit, a key issue for consumers, was brought up by Sen. John Kennedy (R-LA) to see where Chopra stood on ensuring consumers can appeal cases where they have felt wronged.
“Accuracy is critical for the credit reporting system to work, and there’s too many consumers who have problems. Yeah, I would love to look at it, but I think the idea of making sure that consumers can dispute and get answers, that’s part of the fair credit reporting act, but I would definitely like to make sure that consumers have more say,” replied Chopra.
