by Jeff Sovern
As you may know, the US Chamber of Commerce has been running commercials attacking the CFPB and its director, Rohit Chopra. If you are going to read further, I suggest you first click on the link to watch the commercial. And now, some comments:
The title of the commercial is "The CFPB Needs to Be Held Accountable." But since the Seila Law decision, the CFPB has been accountable to the president, who can fire the CFPB director without cause. And indeed, former Director Kathy Kraninger left the directorship when President Biden took office, even though her term had not expired. The director also provides a report to Congress and testifies before each house of Congress every six months. To be sure, the CFPB's budget is not set via the appropriation process, which is too often a way of making agencies accountable to lobbyists, like those the Chamber hires. The budgets of other agencies that regulate the financial industry, such as the Fed, are also not subject to the appropriations process. As Fed officials can't be fired by the president, the Fed is less accountable than the CFPB. And yet I don't recall any Chamber commercials complaining about that.
The commercial calls the Bureau a black box and complains that no one knows how or why its decisions are made. But under Director Chopra the CFPB's web site is jammed with press releases, blog posts, etc. And, as noted above, the director takes questions from members of Congress at least four times a year.
The commercial complains that the Bureau has changed rules without any accountability. I've already discussed accountability. As for changing rules, the Bureau under Director Chopra hasn't done much yet with formal regulations. If by changing the rules, the Chamber means that Chopra has not gone through the formal rule-making process before announcing guidance, etc., well, neither did Kathy Kraninger always do so. And until the Court decided Seila Law during Director Kraninger's tenure, the director was less accountable to the president than Director Chopra is now.
The commercial also complains that Director Chopra wants to restrict choice. Here, the commercial reflects a disagreement about what is best for consumers. Too many choices helped land us in the Great Recession because consumers took out mortgages they later couldn't repay. It gets consumers stuck in debt traps. If that's what the Chamber is advocating for, count me out.
Oh and one minor point: I loved it when the Chamber criticized the Bureau for not sticking with "time-tested bipartisan norms" with an agency that is only eleven years old.
The commercial doesn't offer much about the specifics of the actions it is criticizing. We know that the Chamber is unhappy with the Bureau's interpretation of unfairness as embracing discrimination. I wonder how many people would be convinced that the Chamber is correct if it explained that one of the things seemingly underlying the commercial is that it wants financial institutions to be able to engage in discrimination without facing Bureau blowback.
If you are interested in hearing more about the Chamber's perspective, I encourage you to listen to the latest episode of the Consumer Finance Monitor Podcast on which Alan Kaplinsky interviewed Bill Hulse, Vice President of the Chamber's Center for Capital Markets Competitiveness.