Thanks to his early days at the CFPB, Chopra has spent years as a close ally of Elizabeth Warren. I have no doubt you are the right person to lead the bureau at this moment, the senator said at his confirmation hearing last year. Thanks to that friendship, progressive advocates have been optimistic about the direction Chopra will take the agency. He’s extraordinarily progressive, but was also one of the very few registered Democrats to get confirmed through the McConnell gauntlet in the Trump years, noted Felicia Wong, president of the Roosevelt Institute, a think tank where Chopra worked briefly as a fellow.
National consumer groups have granted trust to the CFPB’s new director, thanks to his background, but that goodwill may have also led to muddled silence on the agency’s new debt collection rule, which was issued in the final stretch of the Trump administration and took effect in November.
Advocates blasted the rule, which clarifies how debt collectors can communicate with borrowers, when the Trump CFPB finalized it in late 2020. They noted that it could open the floodgates to more daily harassment and revive obligations for payments individuals were no longer on the hook for. Yet when it became clear the Biden administration would not withdraw or delay it, advocates went generally silent.
Chopra didn’t directly answer why the CFPB was moving forward with the rule, but told me he agreed that it didn’t solve most problems in the debt collection market, and that debt collection continues to be one of the top topics for consumer complaints. According to an agency spokesperson, the CFPB received an average 80,000 consumer complaints each month in 2021, up a stunning 75 percent from 2020.
Still, as the payday lending jockeying illustrates, enacting reforms that can actually last will not be easy, which may partly explain why Chopra’s early actions have been focused on shinier Big Tech issues like Apple Pay or cryptocurrency
How long the CFPB’s new grace period will last among its more sympathetic allies remains to be seen, especially with credit card debt going back up and foreclosures looming. The CFPB at least embarks on its next chapter with more aggressive regulators heading up other critical agencies, including Lina Khan at the FTC and Gary Gensler at the Securities and Exchange Commission. And thanks to his job at the CFPB, Chopra serves as a board member at the Federal Deposit Insurance Corporation. In December, Chopra and his fellow Democratic board members battled FDIC Chair Jelena McWilliams, a Trump appointee who refused the board members’ decision to ask for public comment about bank mergers. This approach to governance is unsafe and unsound https://getbadcreditloan.com/payday-loans-nd/rolla/. It is also an attack on the rule of law, Chopra said in a statement at the time. On New Year’s Eve, McWilliams abruptly announced that she’d be resigning, giving Biden the opportunity to appoint yet another consumer-minded regulator.
Democrats in Congress are also leaning more aggressively into strengthening consumer protections, proposing to crack down on things like bank overdraft fees and exorbitant interest rates, which could give Chopra more room to act politically, even without new statutory powers. The Education Department has canceled billions of dollars in loans since the Corinthian graduates first went on strike, and activists are ramping up pressure on Biden now to cancel student debt entirely.
The seeds at the CFPB, at least, are ripe. Maybe the agency’s next decade will leave a more lasting mark than its first.
In late December, the White House announced it would push back the return of mandatory student loan repayments, originally to resume in February, until May
That changed after Cordray’s resignation. During the Trump years, employee attrition spiked-with nearly 11 percent of staff leaving in 2018-and there was also a marked decline in investigations into potential lawbreakers. The New York Times Magazine ran a feature in 2019 exploring how Trump’s picks to lead the CFPB-first Mick Mulvaney, followed by federal budget official Kathy Kraninger-had quietly crippled its operations. Where Mulvaney or his successor have allowed cases to go forward, lenders have often settled with lowered fines or none at all, the magazine reported. Instead of a watchdog, Trump’s CFPB became a welcoming home for bank lobbyists. In 2020, a divided U.S. Supreme Court ruled that the president could fire the CFPB’s director without cause, a victory for its conservative critics who claimed the director’s independent five-year term was too unaccountable. While initially a win for Republicans, that same decision allowed Biden to immediately oust Kraninger.
He’s extraordinarily progressive, but was also one of the very few registered Democrats to get confirmed through the McConnell gauntlet in the Trump years.