Preventing another housing crisis is one of the top priorities of the candidate to head the Office of Consumer Financial Protection. Rohit Chopra, President Joe Biden choose the job, said Tuesday in the Senate Banking Committee during a confirmation hearing that the agency tasked with making sure financial institutions treat customers fairly must be prepared for the housing crash due to the coronavirus pandemic.
“My intuition is that we need to be prepared for potentially imminent problems when it comes to tolerances that can happen to foreclosures,” Chopra said. “I don’t want to see another foreclosure crisis in this country. And we have to do everything we can to make sure the laws are complied with and that 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 homes amid the coronavirus pandemic. The report says 8.8 million households have been left behind in rent and another 2.1 million families have fallen at least three months back in their mortgages last year, up 250%. Homeowners owe nearly $ 90 billion in lost payments, a level not seen since the time of the Great Recession. The federal housing foreclosure ban lasts until June, but it’s unclear what will happen when it ends.
“Many families will struggle. They have lost income, they may not be able to take them back and we should make sure they can stay home when they have this ability to do so and not be fooled about what options they have.” Chopra, who is currently a commissioner for the Federal Trade Commission and was announced as the president’s candidate for director of the CFPB in January. “No one should be expelled for forty years, especially if they have been lied to.”
He said that unlike in 2007, the CFPB, which was created in response to this housing crisis, has been tasked with overseeing mortgage markets, working with regulators at all levels and having tools to help. to avoid risks.
While millions face growing housing problems in the United States, another growing challenge is the student loan crisis. Chopra noted during his previous stint at CFPB during the Obama administration, the agency announced that student loan debt had exceeded the $ 1 trillion threshold. The Federal Reserve estimates that Americans now owe more than $ 1.7 trillion in student loans.
“It’s one of the largest consumer credit markets in our country after mortgages and we need to make sure the law is enforced,” he said.
Chopra also said that if confirmed, it will focus on data collection and how that data is used.
“I think there are real questions about transparency,” said Chopra, who acknowledged concerns about discrimination. “Looking at the large amount of data, particularly from large platforms that have detailed data on the behavior of all of us, is something we need to look at closely because it will fundamentally change financial services.”
Chopra seeks to lead an agency that has been heavily criticized since its inception under President Barack Obama. During the hearing, Republicans argued with his authority, including compliance capabilities, as well as its structure.
“It was created by our fellow Democrats through the Dodd-Frank Act as possibly the most inexplicable agency in federal government history,” Pat Toomey, a Pennsylvania ranking member, said during initial statements. “It’s an agency with a single director that until recently even the president of the United States could not dismiss.”
That changed after the The Supreme Court found it unconstitutional in a 5-4 decision in 2020. Toomey argued that it is not yet responding to Congress through the endowment process.
Meanwhile, Democrats have been arguing with the agency’s leadership for the past four years under the Trump administration. Senator Elizabeth Warren accused the nominees of acting as if they were working for big banks and avoiding enforcement powers.
Chopra indicated that there would be greater implementation under the new administration.