By Natalie Mojica
On Feb. 10, Rohit Chopra, former Federal Trade Commissioner and current director of the Consumer Finance Protection Bureau (CFPB), discussed consumer protection amid big banks, competition in the financial sector, and how Americans can be the most fiscally responsible with Washington Post columnist Heather Long.
The CFPB is a financial regulatory agency responsible for regulating consumer financial products like bank accounts, credit cards, mortgages, and more. Chopra was recently confirmed by the Senate in October 2021 and started his term by regulating the use of artificial intelligence in banking and launching a broad review of consumer “junk” banking fees.
“People are getting sick and tired of this ‘fee’ creep that is all over the economy,” said Chopra. “There [are] more and more line items are being added to bills that essentially obscure the upfront price of a product. We see this in so many sectors; whether it’s resort fees, lodging or hospitality, banking […] in many cases these are fees where there’s not even a service provided…This is not the sign of a fair or competitive market.”
When questioned about how high inflation changes the advice Chopra gives consumers to protect their finances, he responded that the agency is focused on problem areas for consumers.
“Top on the list in the components of inflation we see is related to automobiles,” Chopra explained. “Auto-loans outstanding in the U.S. are already well over a trillion dollars, and I expect that we might see that get even higher as more and more Americans are looking to buy cars but are finding them to be very expensive.”
As for his thoughts on cryptocurrencies, Chopra believes the market is still primarily driven by speculative trading.
“But I think it could scale quite quickly if one of the big tech payment platforms starts integrating it and expanding its use,” Chopra said. “That’s one of the reasons I issued a set of orders to Apple, Google, Facebook, and others to understand what is going on with the payment systems they’re building. We have ordered them to produce information about how they will use data from these systems.”
Chopra went on to warn that while cryptocurrencies are becoming popular, there have also been increasing reports of digital fraud and theft that leave consumers defenseless. Since there typically isn’t a higher authority people can go to if something goes wrong while using crypto, he suggests being as careful as possible.
He also noted that there is also a ‘surveillance creep’ that is taking over cyber-use. It will be increasingly important for regulators to ensure that powerful technology companies do not weaponize the data they’re collecting on consumers to take advantage of them.
Overall, most of Chopra’s plans for the CFPB are centered around transparency from financial institutions and big tech companies so that consumers can be better equipped to make their own choices without being surprised with hidden fees later.