Preventing another housing crisis is a top priority for the nominee to lead the Consumer Financial Protection Bureau. Rohit Chopra, from President Joe Biden choose the job, the Senate Banking Committee told a confirmation hearing Tuesday that the agency responsible for ensuring financial institutions treat customers fairly should be prepared for the fallout from the coronavirus pandemic.
“My intuition is that we need to be ready for potentially imminent problems when it comes to tolerance that could turn into forced sales,” Chopra said. “I don’t want to see another foreclosure crisis in this country. And we must do everything we can to make sure the laws are enforced and homeowners can navigate their options.”
The agency released a report on Monday warning that more than 11 million families are at risk of losing their housing amid the coronavirus pandemic. According to the report, 8.8 million households are in rent arrears and an additional 2.1 million families are at least three months behind on their mortgages last year, an increase of 250 percent. Homeowners owe nearly $ 90 billion in missed payments, a level not seen since the height of the Great Recession. A federal ban on seizure of property runs through June, but it’s unclear what will happen when it ends.
“A lot of families will have a hard time. They have lost income, they may not be able to move on and we need to make sure they can stay home if they have the opportunity to do so and not be misled as to what their options are,” said Chopra, who is currently a commissioner to the Federal Trade Commission and was announced in January as the president’s candidate for CFPB director. “No one should be thrown out during a quarantine, especially if they have been lied to.”
He said that unlike in 2007, the CFPB, which was created in response to that housing crisis, has been entrusted with monitoring mortgage markets, working with regulators at every level, and having tools to avert risk.
While millions of people in the United States face growing housing problems, another growing challenge is the student loan crisis. Chopra noted that during his previous time in CFPB during the Obama administration, the agency announced that student loan debt had crossed the $ 1 trillion threshold. The Federal Reserve estimates that Americans now owe more than $ 1.7 trillion in student loans.
“It is one of the largest consumer credit markets in our country after mortgages and we have to make sure that the law is enforced,” he said.
Chopra also said if confirmed, he would focus on data collection and how that data is used.
“I think there are real questions about transparency,” said Chopra, acknowledging his concerns about discrimination. “Looking at how big data, especially through large platforms that have detailed behavioral data on all of us, is something we need to look at carefully because it will fundamentally change the financial services industry.”
Chopra is trying to run an agency that has been heavily criticized since its founding under President Barack Obama. During the hearing, Republicans discussed their authority, including enforcement capabilities, and against its structure.
“It was created by our Democratic colleagues through the Dodd-Frank Act as perhaps the most inexplicable body in federal government history,” Pennsylvania ranking member Pat Toomey said during the opening remarks. “It’s a one-director agency who, until recently, couldn’t even remove the president of the United States.”
That changed after the The Supreme Court found it unconstitutional in a 5-4 decision in 2020. Toomey argued that it is still not accountable to Congress through the credit process.
Meanwhile, for the past four years under the Trump administration, Democrats have been going against the leadership of the agency. Senator Elizabeth Warren accused officials of behaving as if they were working for major banks and of wiping out enforcement powers.
Chopra indicated that there would be more enforcement under the new government.