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The Consumer Financial Protection Bureau (CFPB) has been something of a political lightning rod ever since it began operations in 2011 under the Obama administration. But with the incoming Trump administration showing signs of fierce opposition to the agency, some of its biggest defenders are coming to its defense ahead of a period of uncertainty.
Rohit Chopra, who currently serves as the bureau’s director, offered testimony before the Senate Banking Committee this week. He defended the agency’s record and its continuing active posture even in the wake of President-elect Donald Trump’s election victory last month.
Chopra and the agency at large were heavily criticized by committee ranking member Sen. Tim Scott (R-S.C.), who cited a letter he submitted to the bureau last month demanding that the CFPB cease all rulemaking and personnel appointments in light of the election results. When asked why he didn’t heed the letter, Chopra said that the work of the bureau remains necessary regardless of any pending political changes.
“I don’t think it makes sense for the CFPB to be a dead fish,” Chopra responded. “People between Election Day and Inauguration Day are still getting scammed. They’re still being subjected to questionable account closures. They’re still victims of so much wrongdoing.”
Chopra cited a rulemaking process announced this week to address the financial abuse of domestic violence survivors and elders as an example. He said that lawmakers from both sides of the aisle routinely urge more action from the CFPB on each of these fronts.
“This is an area where we’ve received bipartisan letters from Congress urging us to take action,” Chopra said. “That process will play through, and I hope you can see that consumer protection is not something we should fight about. Instead, it’s something we should guard against together to ensure people have access to a fair marketplace.”
There is no requirement that federal agencies cease rulemaking activities after a November election outcome where the incumbent party will be unseated, and before the scheduled transitions of power in Congress and the White House within the first few weeks of January.
But Sen. Elizabeth Warren (D-Mass.), who was an instrumental figure in the establishment of the CFPB, took a different approach. She penned an editorial in the pages of the Boston Globe, her state’s leading newspaper.
“When a bunch of billionaires tell you they know what’s best for you, hang onto your wallet,” Warren wrote. “Over the past few weeks, Republican politicians and billionaires have come out swinging with lies about the [CFPB], hoping they can pave the way to ’delete’ the agency. But if you have a checking account, credit card, mortgage, or student loan, you might want to know what it could mean for you if the CFPB disappears.”
She cited a past example of the bureau receiving “thousands of complaints that Wells Fargo had unlawfully repossessed cars and wrongfully foreclosed on homes. Wells Fargo illegally injured the owners of more than 16 million accounts — you may have been one of them. That’s where the CFPB comes in.”
In such a case, the CFPB stopped the repossessions and ordered the bank to pay billions of dollars to customers.
“No need to file a lawsuit. No need to spend hours on the phone. That’s the power of having a cop on the beat,” Warren said.
Unlike Chopra, Warren’s role in Washington, D.C., will continue into the next administration and possibly beyond since she was recently reelected to a new six-year term in the Senate.
Warren, who also sits on the Senate Banking Committee, came to the bureau’s defense during the hearing with Chopra. If Trump follows through on a stated plan to cap credit card interest rates, she asked if it would help to “unrig” the credit card system. Chopra said yes.
The president-elect has yet to nominate someone to succeed Chopra as director of the CFPB. When repeatedly asked by banking committee members if he intended to leave his post following the inauguration, Chopra reiterated multiple times that he understood the director serves at the pleasure of the president.
“As you know, we serve and are confirmed for a five-year term,” Chopra said. “The president can remove us at any time, any day, and we obviously completely respect that right.”
