Chopra Testifies Before House, Senate Panels
Last week, Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra testified before the Senate Banking and House Financial Services Committees in separate oversight hearings. The discussions spanned a variety of topics, including the scope of the CFPB’s rulemaking and regulatory authorities, as well as the emergence of large technology companies in the consumer finance space.
In the Senate hearing, Democratic members voiced concerns about the heightened risk of foreclosures and evictions following the expiration of federal assistance. Chairman Sherrod Brown (D-OH) inquired about the potential risks posed by inaccurate consumer reporting in the tenant screening process. The Director stated that the agency plans to conduct oversight of illicit mortgage servicing practices, such as housing discrimination, to prevent further loss in homeownership. Fellow Democratic member, Senator Mark Warner (D-VA) asked for clarification on the timeline for the Qualified Mortgage (QM) rule with the Director responding that although the rule has already been implemented, the compliance date was extended to October 2022.
On the Republican side, several Senators inquired about the agency’s Dodd-Frank Section 1071 (1071) small business lending reporting rulemaking. Sen. Bill Hagerty (R-TN) and Sen. Jerry Moran (R-KS) expressed concern that the 1071 rulemaking would impose burdens on small businesses with Director Chopra responding that the Bureau currently has an open comment period which small businesses may use to provide feedback. Sen. Thom Tillis (R-NC) requested the agency prioritize the prevention of racial profiling that may arise from the 1071 rule.
Director Chopra additionally outlined many of his priorities for the agency before House members in the lower chamber’s oversight hearing, specifically discussing the need to impose enforcement actions against financial institutions that are repeat offenders of violations and focus more on enforcement for larger market participants. The Director discussed leniency for companies that self-report violations and with regards to enforcement, stating that regulatory guidelines and rules set through enforcement should be “easy to follow and easy to enforce.”
In addition to cryptocurrency, which was discussed at length in both hearings, the House hearing touched on the agency’s Dodd-Frank Section 1033 rulemaking concerning consumer’ right to access information about their financial accounts. Director Chopra expressed a desire to promote competition, but also ensure that banks and nonbanks face similar regulatory rules and standards.
November 1st, 2021
