Biden’s transition team declined to comment.
The confirmation process is likely to be difficult, with the Democrats controlling only the Senate. The CFPB, Warren’s brainchild, has long been a favorite target of GOP lawmakers, who have downplayed the agency’s harsh regulations as an executive agreement. They also objected to the way it was set up, with a single-director system that gave the leader a lot of power and funding from the Federal Reserve, meaning the agency was not subject to pressure from Congress’ approval process. .
Chopra, an MBA graduate in Wharton, worked as a consultant at McKinsey before joining the government. During his tenure with the FTC, he urged the agency to be more skeptical of private equity buyers and more aggressive in using its powers to restrain businesses.
He previously served as CFPB Assistant Director and Student Loan Ombudsman after the agency opened its doors in 2011. He has been a federal commissioner for trade since 2018.
Thanks to the Supreme Court ruling last year, Biden can fire current CFPB director Kathy Kraninger on Day One. But the erasure of President Donald Trump’s business-friendly imprint on the bureau, which withdrew enforcement and watered down the rules of the Obama era, could take years.
It is relatively easy to achieve one of Chopra’s first priorities, restoring the agency’s focus on upholding fair lending laws. The other two items with big tickets that former officials expect to be on the new director’s agenda – fighting money lenders and building up robust jurisprudence over what, according to the Dodd-Frank Act, is an ‘insulting act or practice’ ‘, could not be reached until well into Biden’s term as president.
Chopra can move quickly to restore the office of fair loans, which was sidelined by former acting director Mick Mulvaney in 2017, to its original position, allowing fair loan staff to use oversight and enforcement tools to combat discrimination.
The repeal of the Trump administration’s revised payday rule will take longer. The new rule, released in July, repealed an important requirement of the agency’s controversial earlier regulation, which hampers the industry. It offers small emergency loans to customers at a high interest rate, which regularly traps low-income borrowers into expensive debt cycles.
The previous rule, issued in October 2017 just before then-director Richard Cordray retired, would have required borrowers to verify borrowers’ income and debt to determine if they could afford the loans. The CFPB annulled this requirement with the new rule this year, which led to a scream among the Congress Democrats, which called for an inspector general investigation into allegations of undue political influence on the drafting of the rule.
Consumer groups have sued to overturn the new rule – they claim the agency is violating the Administrative Procedures Act and Dodd-Frank – so it is possible the courts will destroy it.
Without the intervention of the courts, the rule would be reviewed and re-released, going back to square one – using research from the past and explaining in a proposal why the latest version of the rule restores different provisions, giving a long notice and comment period and set an implementation date that gives the industry enough time to comply. This means that on payday, lenders may experience new consequences until almost a decade after the office began efforts to curb the industry under Cordray.
Chopra is also likely to try to develop a more aggressive application of the ‘abusive’ standard under Dodd-Frank, a pivot away from the more relaxed leadership the agency has issued this year.
“Unfair or misleading acts or practices” have long been banned under federal law, but Dodd-Frank added in 2010 “insultingly” to the ban, known as UDAAP, and gave it to the CFPB government and enforcement authority.
Business groups have for years insisted on clarity on what is considered abusive, and the agency said earlier this year that it would take a self-restrained approach to suing companies for insulting offenses, based in part on whether the companies were in good faith. perform. Consumer groups immediately rejected the free ‘good faith’ release.