A political ally of Sen. Elizabeth Warren who worked with Warren to create the Consumer Financial Protection Bureau (CFPB) has been named by President-elect Joe Biden to head up the bureau.
Politico has more on the appointment and what it means for the direction of the Bureau:
Chopra, a Wharton-trained MBA, worked as a consultant at McKinsey before joining government. Over the course of his term at the FTC, he has pushed the agency to be more skeptical of private equity buyers and more aggressive in using its rulemaking powers to rein in businesses.
Thanks to a Supreme Court ruling last year, Biden can fire current CFPB Director Kathy Kraninger on Day One. But erasing President Donald Trump’s industry-friendly imprint on the bureau, which has pulled back on enforcement and watered down Obama-era rules, may take years.
Kraninger has come under fire from consumer advocates as someone who has been friendly to payday lenders. Under her leadership, the bureau adopted a very weak version of a rule designed to rein-in payday predators. This came after five years of work by advocates to convince the bureau to adopt a rule that would provide relief to consumers who fall prey to debt trap lenders.
Chopra seems poised to shift the bureau back in the direction of actually regulating industries and protecting consumers, rather than providing political cover for the unscrupulous lenders and other big business entities who donated heavily to outgoing President Donald Trump.
Here’s how Politico explains the payday lending rule under the Trump Administration:
The new rule released in July rescinded a key requirement of the agency’s controversial earlier regulation cracking down on the industry, which offers small emergency loans to customers at sky-high interest rates, frequently trapping low-income borrowers in costly debt cycles.
The Center for Responsible Lending weighed-in with a comment from director of federal advocacy Ashley Harrington:
Commissioner Chopra has long fought for financial markets that are fair for consumers, including student loan borrowers. We are encouraged that the CFPB will now return to its mission of protecting people’s finances, which has heightened significance in this economic downturn, and which includes a strong fair lending program.
Chopra is the…