New CFPB Chief Rohit Chopra Confirmed By Senate And Takes Immediate Action Against Big Tech Firms – Consumer Protection – United States – Mondaq News…

16 November 2021

Alston & Bird

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A&B Abstract:

On September 30, 2021, the Senate confirmed Rohit Chopra to serve as director ofthe Consumer Financial Protection Bureau (CFPB) in a 50-48 votealong party lines. He had been serving as a member of the FederalTrade Commission (FTC) where he had been a vocal critic of big techcompanies and advocated for increased restitution forconsumers. He previously served as the CFPB's private educationloan ombudsman under former CFPB Director Richard Cordray. Prior tothat, he had worked closely with Sen. Elizabeth Warren on theCFPB's establishment. Consistent with his past practices,Chopra's CFPB has now ordered six Big Tech companies to turn overinformation regarding their payment platforms.

Expectations for Chopra's CFPB

President-elect Biden announced Chopra as his choice to lead theCFPB before Inauguration Day, and the Biden Administrationsubsequently referred his nomination to the Senate inFebruary. Chopra succeeds Kathy Kraninger, who became Director inDecember 2018 after having served as a senior official at theOffice of Management and Budget. She led the CFPB for two yearsbefore the incoming Biden Administration demanded her resignationon January 20. It is expected that Chopra will aggressively leadthe CFPB and unleash an industry crack down. The October 21, 2021order issued to Big Tech regarding paymentproducts appears to be the first step in that plan. Additionally,credit reporting companies, small-dollar lenders, debt collectors,fintech companies, the student loan industry, and mortgageservicers are among the financial institutions expected to facescrutiny from Chopra's CFPB. Prior to the Big Tech inquiry, theCFPB, under interim leadership, had already taken initial steps toimplement pandemic-era regulations and to advance the Bidenadministration's priorities. It is also expected that theenforcement practices under former-Director Cordray will be revivedunder a Chopra-led CFPB.

After his confirmation, Chopra stated an intent to focus onsafeguarding household financial stability, echoing priorstatements regarding his commitment to ensuring those underforeclosure or eviction protections during the pandemic are able toregain housing security. He has also declared an intent to closelyscrutinize the ways that banks use online advertising, as well astake a hard look at data-collection practices at banks. In his remarks related to the market-monitoring orderissued to Big Tech, Chopra was critical of the way companies maycollect data and his concern that it may be used to "profitfrom behavioral targeting, particularly around advertising ande-commerce."

Just one week later, Chopra delivered remarks in his firstcongressional hearing as Consumer Financial Protection Bureaudirector. In his prepared statements before both the House Committee on Financial Services and theSenate Committee on Banking, Housing, andUrban Affairs, he cited mortgage and rent payments, small businesscontinuity, auto debt, and upcoming CARES Act forbearanceexpirations as problems he plans to address. He also stated anintent to closely monitor the mortgage market and scrutinizeforeclosure activity. And, echoing his action from a week earlier,Chopra reiterated an intent to closely look at Big Tech andemerging payment processing trends. Chopra also noted a lack ofcompetition in the mortgage refinance market and stated an intentto promote competition within the market.

Although appointed to a five year term, the CFPB director servesat the pleasure of the president after alandmark decisionlast year from theSupreme Court.

Takeaway

Industry participants, including credit reporting companies,small-dollar lenders, debt collectors, fintech companies, thestudent loan industry, and mortgage lenders and servicers cananticipate additional scrutiny in the coming months and years fromthe CFPB. As Chopra gets settled into his new role, we will bekeenly watching where he turns his attention to next.

The content of this article is intended to provide a generalguide to the subject matter. Specialist advice should be soughtabout your specific circumstances.

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New CFPB Chief Rohit Chopra Confirmed By Senate And Takes Immediate Action Against Big Tech Firms - Consumer Protection - United States - Mondaq News...