The incoming director of the Consumer Financial Protection Bureau, Rohit Chopra, is expected to use his position to rein in financial firms.
The Senate confirmed Rohit Chopra on Thursday to run the Consumer Financial Protection Bureau in a 50-to-48 party-line vote that overcame objections from Republicans who said he would wield the bureau’s sweeping powers to pursue an anti-business agenda.
Mr. Chopra, 39, served most recently as a commissioner on the Federal Trade Commission, which he often criticized for what he viewed as a reluctance to crack down on violators. Facebook and Google were particular targets of his ire; citing “the endless scandals involving large technology firms,” he called for much larger financial penalties and stiffer constraints.
As President Biden’s choice for director, Mr. Chopra will be returning to an agency he helped build. Congress created the Consumer Financial Protection Bureau a decade ago with a simple mission: to regulate financial companies and protect consumers. The brainchild of Senator Elizabeth Warren, who lists it in her Twitter bio as one of her children alongside her two human offspring, it set out to crack down on the kinds of abuses that led to the 2008 mortgage crisis and subsequent economic crash. The bureau quickly became one of Washington’s most feared and aggressive regulators.
“The C.F.P.B. is a young agency, and you see it whipsawing based on the leadership,” said Ashley Taylor, a partner at Troutman Pepper who specializes in consumer finance regulation and enforcement. “The person at the top makes a huge difference.”
Mr. Chopra worked on the bureau’s development team and then became an assistant director, serving as its inaugural student loan ombudsman until 2015. In that role, he pressed for better safeguards and more active policing of federal student lending as it ballooned to a market of more than $1 trillion.
“He’s really part of that original Elizabeth Warren crew that was there at the beginning and stood up the agency and had tremendous vision for what it was supposed to do,” said Rachel Rodman, a former enforcement lawyer at the bureau who is now a partner at the law firm Cadwalader, Wickersham & Taft. “I view this as a return to that time and those priorities after the interruption of the Trump administration.”
Republicans have often demonized the consumer bureau because of its ability to reshape industries by rewriting their rules and punishing those that push the limits. Senator Patrick J. Toomey of Pennsylvania, the ranking Republican on the Banking Committee, said he feared Mr. Chopra would return the bureau to “the lawless, overreaching, highly politicized agency it was during the Obama administration.”
To advance Mr. Chopra’s nomination to the final vote, Vice President Kamala Harris broke a tie on a procedural vote. She had also broken deadlocks to confirm Jennifer Abruzzo, who in July became the general counsel of the National Labor Relations Board, and Kiran Ahuja, who became the Office of Personnel Management’s director in June.
Mr. Chopra’s immediate focus is likely to be on pandemic relief measures. Fearing a wave of foreclosures now that a federal eviction moratorium has expired, the bureau recently authorized new rules making it harder for lenders to seize homes until next year.
Expanded enforcement of fair lending laws is another area where observers expect significant action. At his nomination hearing in March, Mr. Chopra said he was concerned about the privacy and security of the data troves collected by technology companies and financial services providers, and about the risk of bias in the algorithmic systems that increasingly drive lending decisions.
Mr. Chopra’s bureau is also likely to take a leading watchdog role over the burgeoning industry of nonbank financial technology companies that issue mortgages, student loans and other credit products.
“Agencies want to be relevant, and with a director who isn’t afraid to expand the bureau’s authority the C.F.P.B could really shape that space,” Ms. Rodman said.
The consumer bureau has in recent years swung like a pendulum between extremes. Under its initial director, Richard Cordray, the agency overhauled mortgage lending rules, prosecuted hundreds of companies and extracted nearly $12 billion from businesses in the form of canceled debts and consumer refunds. When Mr. Cordray departed in the fall of 2017, President Donald J. Trump installed Mick Mulvaney, who as acting director curbed the bureau’s enforcement arm and sharply curtailed its work.
He was replaced by Kathleen Kraninger, a less-fiery leader who shared Mr. Mulvaney’s aversion to stricter financial regulation. She criticized the bureau for “pushing the envelope” and gutted a planned rule that would have constrained payday lending.
But a Supreme Court ruling last year gave the president the power to fire the director of the Consumer Financial Protection Bureau at will, and Mr. Biden used that authority to oust Ms. Kraninger in January. Since then, the bureau has been led by an acting director, Dave Uejio, who has worked there for nine years and served most recently as its chief strategy officer.
To replace Mr. Chopra on the Federal Trade Commission, Mr. Biden nominated Alvaro Bedoya, an online privacy expert.
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