At Banking Hearing, CFPB Director Nominee Rohit Chopra Agrees to Use CFPB to Protect Consumers from Financial Discrimination and Housing Instability
Washington, DC - In a Senate Banking Committee hearing today, United States Senator Elizabeth Warren (D-Mass.) questioned Consumer Financial Protection Bureau (CFPB) Director Nominee Rohit Chopra, currently Commissioner at the Federal Trade Commission, about CFPB's role enforcing fair lending laws and protecting consumers in a housing crisis.
In response to Senator Warren, Commissioner Chopra agreed to use tools available at the CFPB to ensure financial institutions comply with anti-discrimination laws, or are held accountable when they do not. Commissioner Chopra also affirmed the CFPB's role in monitoring mortgage markets and helping protect people at risk of losing their homes.
U.S. Senate Committee on Banking, Housing and Urban Affairs
Tuesday, March 2, 2021
Senator Warren: Commissioner Chopra, congratulations on your nomination. You have been a longtime advocate for consumers, and I have no doubt you are the right person to lead the Bureau at this moment. But you have a big task ahead of you. The last administration's appointees acted like they worked for the giant banks that they were supposed to regulate. So, it's clear that the Bureau needs to return to its core mission of protecting consumers.
So, I want to ask you about your plans for one of the areas where the past leadership of the Bureau failed the most, and that's enforcing the fair lending laws that are designed to protect consumers from discrimination.
In 2017, one of the very first things that Mick Mulvaney did when he took over as Acting Director was to gut the Bureau's fair lending office and strip the attorneys of enforcement power. And no surprise: Enforcement actions plummeted. So, can you talk about your own plans for holding banks and financial companies accountable for discrimination?
Commissioner Chopra: So, Senator, thank you. I don't think this is just a problem at the CFPB. The FTC, where I worked, did not file a single enforcement action on the Equal Credit Opportunity Act for years and years. I don't believe agencies should nullify Congress. We should enforce the laws that have been delegated to us. And it is particularly important when it comes to anti-discrimination. There are new ways in which financial institutions are using behavioral advertising. New forms of data collection. And we need to make sure that we are offering a robust way to understand how they can comply and hold them accountable when they are not. Our Fair Lending and Equal Opportunity Office at the CFPB -- I had a chance to work with them the last time I worked there -- is established by Congress, and it should play a critical role in making sure the law is being filed and meeting the objectives set out in the Act.
Senator Warren: Good. I'm very glad to hear you say that, Commissioner Chopra. And you know, the whole problem of discrimination in financial services exacerbates racial wealth inequalities. And I'm glad that you're going to make this a priority. It is long past time to send a signal to Wall Street that the Bureau is not going to turn the other way and look away when big financial institutions discriminate against Black, Latino, Asian, and Native customers. So, thank you for that commitment.
I also want to talk about the upcoming housing cliff that is facing millions of Americans.
During the 2008 financial crash, financial regulators focused on helping banks and turned their backs largely on American families. The result was that about 10 million families lost their homes, with that burden falling heaviest on families of color. In response, the Obama administration established the CFPB to make sure that never happens again.
Now, fast forward to the COVID-19 pandemic. Forbearance measures have staved off a similar wave of foreclosures, but those protections are not going to last forever. The good news is that unlike 2008, we now have an agency that is dedicated to putting consumers first. So, let me ask you, Commissioner Chopra, can you explain the urgency of the current crisis and how you plan to use the Bureau's tools to prevent the mistakes that were made during the Great Recession from just happening all over again?
Commissioner Chopra: Well, Senator, I'd be remiss if I did not acknowledge the role you played in the establishment of the Bureau. And I know something, I've spoken with you and many others on this committee, is that, what happened in the mortgage market in the years leading up to Lehman and the foreclosures that took place after: We have seen report after report after report about how devastating that was to families, to their future, to our economy. And it impacted our entire financial system. So, we have the CFPB. It has been entrusted to monitor those mortgage markets, work side by side with each other regulator, work with states, and use the tools in the toolbox to spot those risks. And while Congress has hit pause on many of the troubles and the mortgage market, we are not out of this based on the data I've looked at. Many families are going to struggle. They have lost income. They may not be able to resume. And we should make sure that they can stay in their homes when they have that ability to do so and not be deceived about what their options are. No one should be kicked out during a quarantine particularly if they've been lied to. I really fully believe that strongly.
Senator Warren: Well, I appreciate you.
Chairman Brown: Thank you, Senator Warren and Commissioner Chopra.
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