Elected President Joe Biden has chosen Rohit Chopra to be the director of the Bureau of Financial Consumer Protection, and is tapping a progressive ally of Senator Elizabeth Warren to direct the agency that advocated its creation. The choice comes as the Democrats’ ways of giving millions of Americans relief for student loans as part of a COVID-19 aid package.
Chopra, now a commissioner at the Federal Trade Commission, helped launch the consumer agency after the 2008-09 financial crisis and served as deputy director, where he sounded the alarm about the soaring levels of student loan debt. Chopra previously served as assistant director of the CFPB, where he led the agency’s student loan efforts. He was also a special adviser to the U.S. Department of Education.
In these roles, Chopra has led efforts to stimulate competition in the student loan financing market, develop new student instruments, and secure hundreds of millions of dollars in repayments for borrowers who have progressed through illegal actions by nonprofit loan service workers, debt collectors, and college chains. is. .
Biden announced the move Monday, along with his intention to appoint Gary Gensler, a former chairman of the Commodity Futures Trading Commission, as the next chairman of the Securities and Exchange Commission. Gensler, a former Goldman Sachs banker, has stepped up oversight of the complex financial transactions caused by the Great Recession.
Biden’s choice of an expert with experience as a strong market regulator during the financial crisis to lead the SEC suggests that the Wall Street watchdog agency is turning to an activist role after a deregulation period during the Trump administration.
Consumer advocates praised the choices of Gensler and Chopra.
Gary Gensler “was not afraid to take on Wall Street as chairman of the U.S. Commodity Futures Trading Commission and will return the SEC to an agency that protects both small investors from risky practices and the financial system from dangerous actors,” he said. Ed Mierzwinski, senior director for federal consumer programs at consumer group US PIRG, said in a statement.
Gensler, now a professor of economics and management at MIT’s Sloan School of Management, was an assistant treasury secretary in the Clinton administration and later headed the CFTC during Barack Obama’s term.
Gensler was senior adviser to U.S. Senator Paul Sarbanes at the time of writing the Sarbanes-Oxley Act and was Secretary of the Treasury for Home Finance from 1999 to 2001 and Assistant Secretary to the Treasury for Financial Markets from 1997 to 1999. the background that he worked. Gensler surprised many for nearly 20 years at Wallman Power Station Goldman Sachs by being a tough regulator of big banks as CFTC chairman.
Gensler was fluent in politics and economic policy and was chief financial officer of Hillary Clinton’s 2016 presidential campaign against Donald Trump and Obama’s economic adviser in his 2008 presidential bid.
Gensler was a leader and adviser to Biden’s transition team responsible for the Federal Reserve, banking issues and security regulation.
“The protection of unscrupulous investors”
Jay Clayton, a former Wall Street lawyer who headed the SEC during the Trump administration, led a deregulatory push to soften rules affecting Wall Street and the financial markets, as Trump promised then accepted his office. Rules that tightened the reins on banks and Wall Street under the Dodd-Frank Act in the wake of the financial crisis and the Great Recession have been captured.
“Gensler will turn the SEC away to make it easy for companies to raise money and protect unscrupulous investors,” said Erik Gordon, an associate professor of business at the University of Michigan. “His history in the Obama administration allows him few friends on the Republican side – and he probably doesn’t care.”
Patrick McHenry of North Carolina, the senior Republican in the House Financial Services Committee, said Gensler’s receptivity to new financial technologies and cryptocurrency is positive. But he added: “I fear the Democrats want the (SEC) to move away from dual common ground in an effort to achieve their most biased goals.”
Sen. Sherrod Brown of Ohio, the senior Democrat on the Senate Banking Committee who is set to chair, said Gensler’s record as a regulator “shows that he will hold bad actors accountable and put the interests of working families first.”
Brown said Chopra will bring the CFPB back to its central mission to protect consumers and will also ensure that the agency plays a leading role in combating racial inequalities in our financial system.
The CFPB was established at the request of Warren as an independent agency by the Dodd-Frank Act. The director was given a wide space to act alone, without winning the agreement of members of an agency board.
While enforcing consumer protection legislation, the CFPB has also been empowered to investigate the practices of virtually any business that sells financial products and services: credit card companies, payday lenders, mortgage services, debt collectors, non-profit colleges, car suppliers, money- transfer agents.
Outspoken critic of Facebook
The CFPB has become a major target for conservative Republicans. Trump appointed the then White House budget director Mick Mulvaney as acting director of the CFPB when Cordray left in November 2017.
Mulvaney was an outspoken critic of the consumer agency and made profound changes to it by, for example, easing the regulations on payday loans and withdrawing on the enforcement efforts. The agency has been headed by Trump, Kathy Kraninger, since December 2018.
As one of two Democratic commissioners of the Federal Trade Commission with five members, Chopra has been an outspoken critic of practices by big companies, most notably the technology giant Facebook. He argued strongly about FTC actions against the company for violating privacy and alleged competition against competition and said they did not go far enough.
“Rohit Chopra has the ideal background to win the land at the CFPB,” Mike Litt, an advocate for the consumer program at the U.S. PIRG Education Fund, said in a statement. “In his civil service, he used all available policy levers to protect consumers from corporate offenders. We could not be happier with his choice to restore the CFPB after three years of disastrous leadership.”