CFPB Director Testifies Before House Financial Services Committee

Rohit Chopra, Director of the Consumer Financial Protection Bureau, testified Wednesday before the House Committee on Financial Services in a hearing titled “Consumers First: Semi-Annual Report of the Consumer Financial Protection Bureau.”

“In my first six months as Director, the Consumer Financial Protection Bureau has refocused its efforts to align with the objectives that Congress set out for the agency,” said Chopra as he outlined several of the Bureau’s objectives to date, including:

• Focusing Enforcement on Repeat Offenders and Other Major Market Actors
• Enhancing Transparency Through Guidance
• Rethinking Our Approach to Regulations
• Listening and Learning from the Business Community
• Promoting Competition
• Preparing for the Era of Big Tech and Big Data in Banking

“Under your leadership, I’m pleased that the CFPB is finally back on track,” said Rep. Maxine Waters, Chairwoman of the House Committee on Financial Services, in her opening remarks. “I commend your recent efforts to crack down on large financial firms that repeatedly break the law and harm individual consumers and working families. The practice of slapping a fine on a recidivist corporation while they rake in large profits should not be tolerated anymore; there must be serious consequences and structural reforms to prevent these kinds of repeat offenses.”

Chopra outlined the CFPB’s recent actions against MoneyGram, FirstCash and TransUnion, two firms that violated law enforcement orders and other consumer financial protection laws.

“When small businesses violate the law, federal enforcers are often quick to levy crippling sanctions,” said Chopra. “But when larger players repeatedly violate the law, agencies are far more lenient. This is highly inappropriate. I am committed to ensuring that the CFPB does not follow this path. The CFPB is shifting enforcement resources away from investigating small firms and instead focusing on repeat offenders and large players engaged in large-scale harm.”

Making rules and regulations clear and concise were another topic tackled by Chopra, noting the Bureau’s issuance of guidance documents, such as advisory opinions, compliance bulletins, policy statements, and other publications.

“Laws work best when they are easy to understand, easy to follow, and easy to enforce,” said Chopra. “These efforts help entities comply with laws passed by Congress by either providing further clarity where needed or drawing attention to an already clear legal requirement.”

Allowing the public to exercise their Constitutional right to petition the government was another topic of discussion during the testimony. Chopra highlighted the CFPB’s process that will allow the Bureau to hear directly from the public about potential regulations that should be developed or amended.

Along the same lines of being open to public input, Chopra also discussed engagement with institutions without direct access to the CFPB, including small banks and credit unions, and other businesses and associations, including healthcare providers, automobile dealers, farmers, hotel owners, retailers, and more.

“While these industries generally engage in business practices that fall outside the scope of the CFPB’s authority, they are deeply affected by the laws the agency administers,” said Chopra during his testimony. “These efforts will help the CFPB be more attuned to the needs of businesses across the economy.”

He closed his presentation by noting the Bureau’s willingness to adopt new technologies and be receptive to advancements in the digital space.

“America’s consumer finance infrastructure is the plumbing for an enormous amount of economic activity,” added Chopra. “New technologies and systems can bring us faster payments, and new opportunities to connect customers and financial providers.”

Click here to view Chopra’s testimony in its entirety or click here to view the “Semi-Annual Report of the Consumer Financial Protection Bureau.”