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.