CFPB’s Chopra Wants to Revitalize ‘Relationship Banking’

The new director of the Consumer Financial Protection Bureau on Wednesday said the agency will place a high priority on revitalizing “relationship banking” across the country.

“Increasingly, households and businesses have no place to turn to when they need help, especially when they face errors and problems in their financial lives,” Rohit Chopra told the House Financial Services Committee. If people had a relationship with their financial institutions, they would know who to ask for help, he added.

“Preserving relationship banking is critical to our nation’s resilience and recovery, particularly in these times of stress,” Chopra said.

Wednesday’s hearing was Chopra’s first congressional hearing as CFPB director. His reception on Capitol Hill represented a 180 degree turn from the reception Trump Administration CFPB directors received when they appeared before Congress.

On Wednesday, Republicans blasted the Biden Administration’s CFPB for having an activist agenda, while Democrats praised Chopra, who has been in the position for about two weeks. During the Trump Administration, committee Republicans were pleased with the agency’s pro-business stance—a position that angered Democrats.

“You have inherited an agency that was undermined by the Trump Administration,” Financial Services Chairwoman Rep. Maxine Waters, D-Calif.  told Chopra.

Committee ranking Republican Rep. Patrick McHenry of North Carolina told Chopra that the agency already has issued policy and guidance that he finds “very troubling.”

In outlining his priorities, Chopra said he wants the agency to explore ways to stimulate more competition in financial markets. He said, for instance, that there is a dearth of competition in the mortgage refinance market for families with mortgages having low balances.

“We will be keeping a close eye on practices that might impede competition, we plan to listen carefully to local financial institutions and nascent competitors on the obstacles they face when seeking to challenge dominant incumbents, including in Big Tech,” he said.

Chopra also said he wants to ensure that in enforcement actions, the agency focuses on repeat offenders. “Repeat offenders that violate orders and cause ongoing harm to families and law-abiding businesses must be stopped,” he said.

Committee Republicans sharply criticized the CFPB under former Acting Director Dave Uejio—particularly Uejio’s decision to rescind a Trump Administration policy that defined what constitutes an “abusive” action. Chopra said the policy statement, issued by former Director Kathleen Kraninger, failed to provide clarity about what that term means. “Congress has laid out what the definition is,” Chopra said.

Chopra also said he wants to help establish a whistleblower program at the agency—a program that would protect and reward financial industry employees who report wrongdoing.

Related:

Senate Confirms Rohit Chopra as CFPB Director

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