On January 18, 2021, President Biden appointed Federal Trade Commissioner Rohit Chopra to direct the Consumer Financial Protection Bureau (CFPB). The CFPB was created through the Dodd-Frank Act in 2010 and began to operate in 2011. Its jurisdiction largely overlaps that of the Federal Trade Commission (FTC) but also encompasses financial institutions, which the FTC does not regulate.
The CFPB’s aggressive tactics under Obama-era director Richard Cordray garnered its attention in the Senate and federal courts, where challenges were raised as to the agency’s constitutionality. The Bureau also suffered notable litigation losses due to perceived overreach and discovery abuses. Under the Trump administration, the CFPB was headed first by Mick Mulvaney, and then by Kathleen Laura Kratinger, whose collective leadership witnessed a sharp decline in enforcement actions by the CFPB.
Commissioner Chopra’s appointment promises to reverse that trend. An outspoken consumer advocate, Commissioner Chopra has criticized the FTC’s enforcement and remedial tactics as being too lenient and not extracting enough money from wrongdoers (see The Case for Resurrecting the FTC’s Penalty Offense Authority, Oct. 25, 2020), even as the Supreme Court entertains the question of whether the FTC has overstepped its statutory authority in collecting damages without giving defendants notice that their business practices were unfair or deceptive (see analysis of AMG Capital Management v. Federal Trade Commission here). Under Mr. Chopra’s leadership, businesses should expect a steep increase in both regulatory and enforcement activity from the CFPB, including additional rulemaking, issuance of civil investigative demands, and enforcement actions.