By a narrow 50-48 vote along party lines, Rohit Chopra was confirmed yesterday by the U.S. Senate to become the Director of the Consumer Financial Protection Bureau. Chopra previously served as the Bureau’s assistant director and was its first student loan ombudsman. Most recently, Chopra served as a commissioner of the Federal Trade Commission for the past three years where he conveyed his penchant for aggressive enforcement of larger institutional violators and advocated for monetary relief from violators outside of the authority provided under Section 13(b) of the FTC Act (we previously discussed Section 13(b) in earlier Consumer Finance & FinTech Blogs here, here, and here).
Chopra’s confirmation will undoubtedly solidify the Bureau’s more aggressive oversight of financial services companies than occurred under the bureau’s previous director under the Trump administration, Kathy Kraninger. Such more aggressive oversight has already been occurring over the last few months under the leadership of the Bureau’s acting director, Dave Uejio (we discussed the Bureau’s latest enforcement posture in earlier Consumer Finance & FinTech Blog posts here, here, and here).
Putting It Into Practice: Among other things, we can expect to see the following from the Bureau under Director Chopra’s leadership:
- A high likelihood of a return to “regulation by enforcement,” which often left the financial services industry unable to determine exactly what sort of activities are permissible and what activities are not permissible, and occasionally resulted in the CFPB providing rulings on the law that were inconsistent with the plain language of consumer protection laws, including RESPA in particular.
- More aggressive enforcement actions, including actions against companies that do not deal directly with consumers at all for aiding and abetting other parties in the conduct of unfair, deceptive or abusive practices. For example, the CFPB recently sued a software company that it alleges facilitated unlawful conduct by credit-repair businesses, even though it did not sue any of the businesses actually engaging in the unlawful conduct (previously covered in a Consumer Finance & FinTech Blog post here).
- Actions against corporate officers who oversee or carry out a company’s allegedly unlawful conduct.
- More rule making. The CFPB has already proposed this year data collection requirements in connection with small business loans (previously covered in a Consumer Finance & FinTech Blog post here).