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Author: Don Obrien

Chopra Takes The Reins At The CFPB – Finance and Banking



United States:

Chopra Takes The Reins At The CFPB


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On September 30, 2021, the U.S. Senate, on a party-line vote, confirmed the nomination
of Rohit Chopra to head the Consumer Financial Protection Bureau (CFPB or
Bureau). This action solidifies the Biden administration’s
control of that agency and will accelerate its shift to a more
aggressive enforcement posture that began with the designation of
David Uejio as acting director in January.

Chopra is no stranger to the Bureau, having served under Sen.
Elizabeth Warren as she stood up the agency and then continuing
under then-Director Richard Cordray, focusing much of his attention
on student lending issues. Chopra’s government service
continued at the Department of Education and, since 2018, as a
member of the Federal Trade Commission (FTC), where he regularly
dissented from FTC actions that he believed imposed insufficient
penalties and other remedies and that failed to hold individual
board members and officers accountable for their companies’
actions.

Under Chopra’s leadership, the Bureau is certain to continue
the primary thrusts of its authority across all its tools to (1)
ameliorate the effects of the COVID-19 pandemic on American
consumers and (2) increase the Bureau’s efforts to ensure fair
lending and increase racial equity and inclusion in all sectors of
the consumer financial marketplace.

While the Bureau certainly moved quickly and aggressively toward
these priorities under Uejio’s leadership, with Chopra’s
arrival many activities can be expected to ramp up even more. Many
enforcement matters involving new or novel theories were developed
during the first nine months of the Biden administration but were
held in abeyance pending the arrival of a permanent director. Now
that Chopra has been confirmed, these matters will likely proceed
with great speed to their next stage-issuance of a civil
investigative demand or commencement of a public enforcement
action.

Many enforcement investigations are likely to be aimed at
institutions that are large, either in absolute terms or within a
specific consumer market or submarket, and will include a review of
whether board members or officers should be held personally liable
for conduct that harms consumers. The Bureau will not hesitate to
pursue its UDAAP (unfair, deceptive, or abusive acts or practices)
authority to challenge activity not expressly prohibited by other
consumer protection laws and regulations, and it can be expected to
seek nonstandard remedies such as limitations on sales and growth
and the removal of board members and other executives. The Bureau
is also likely to pursue novel legal theories through
administrative adjudication, which allows it to proceed quickly and
results in a final determination made by the agency director
himself.

Chopra will have an immediate opportunity to install staff
committed to his agenda, as the deputy director position, a
political appointment, and all career leadership positions in the
Supervision, Enforcement & Fair Lending Division are vacant.
This will allow Chopra to evaluate future Bureau structure,
including the relationship between supervisory and enforcement
activity and the role of the Fair Lending Office. Chopra can also
be expected to work closely with the new leadership at the Office
of the Comptroller of the Currency and the National Credit Union
Administration to increase consumer compliance enforcement against
large depository institutions and to continue such work with state
financial services regulators and attorneys general.

The Bureau will remain focused on quickly finalizing its recent
proposed rulemaking under Section 1071 of the Dodd-Frank Act
concerning the collection of data in the small-business lending
marketplace and may seek to increase its oversight of markets
primarily served by state-licensed non-depository institutions.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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