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Rohit Chopra, Consumer Finance Protection Bureau

CFPB-side: Everything (else) Chopra told us

We sat down with Consumer Financial Protection Bureau Director Rohit Chopra recently and published a story based on that interview in the latest quarterly edition of The Vault.

But the newsletter business is a demanding one, as far as word count goes. Our conversation with Chopra covered a lot more ground than we had space for.

That said, you’re in luck! It’s recess! Congress slumbers! And that means we’ve got time to unpack the B-side of our Chopra Q&A.

Statutory shade: We’ve written a good deal about the CFPB’s legal battles over the years, and the banking industry’s effort to halt credit card late fee reform is going to be a hot topic in the weeks ahead.

But in our interview, Chopra didn’t just defend his agency’s efforts. The CFPB director suggested some of his regulatory peers had acted too timidly in recent years and stopped short of publishing specific rules out of fear of legal pushback from the industry.

“Other agencies are simply ignoring their statutory commands,” Chopra said, referring in part to never-implemented provisions from Dodd-Frank reform. He added:

Bigger isn’t better: Like many of the Biden administration’s progressives, Chopra is skeptical that we need to see more consolidation in the banking sector.

“Banks are not in the business of merging. They’re in the business of banking,” Chopra said. “So they really should be competing on their business acumen of lending, collecting deposits, providing services. The better they are at that, they will be rewarded in terms of their organic growth.”

A key theme from Chopra’s tenure at the CFPB has been assessing the particular policy problems posed by big banks, including higher credit card APRs — a charge the industry itself has disputed.

The CFPB director doubled down in our interview. “We have to look at where the abuses and the harms are,” Chopra said. “And most of those are coming from the biggest players.”

Politicization: The banking sector’s advocates have increasingly accused the CFPB of becoming “politicized.” Consumer Bankers Association CEO Lindsey Johnson told Congress last month that regulators at the CFPB and beyond “must stop writing regulations for short-term political wins.”

We asked Chopra to respond to that charge. The director replied: “That’s so insulting to everyone who pays excessive fees or has been cheated by a bank.”

Chopra said his agency’s efforts were just one small part of the work ordered by the White House Competition Council. He also disagreed that applying the term “junk fees” to legal bank practices was unfair. Junk fees have “creeped across the economy,” Chopra argued.

“If we rewind 30 years ago, an overdraft fee was very sporadic, inadvertent — very rare,” Chopra said. “Then, it becomes a multi-billion dollar haul for the top few banks.”

— Brendan Pedersen

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