Consumer bureau chief bashes FTC and pledges focus on tech giants, big firms

Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra found rare common ground with Republicans on Wednesday over efforts to address market-shifting actions by tech giants.

Chopra told the House Financial Services Committee during a hearing that the CFPB would “focus most of its resources on the largest firms that are engaged in nationwide harm,” instead of smaller companies less capable of fighting back.

“One of the things that drives me a little crazy is when federal agencies don’t focus their efforts on nationwide or systemic or severe harm,” said Chopra, a progressive Democrat, referring to the Federal Trade Commission (FTC). 

Chopra served as an FTC commissioner from 2018 until his confirmation as CFPB director earlier this month. His criticism of fellow FTC commissioners for what he considered insufficient penalties for major tech companies drew high praise from Silicon Valley critics in both parties while alienating several of his colleagues.

During his first congressional appearance as CFPB director, Chopra again rebuked the FTC, saying it let Facebook and Google “off the hook” while “strong-arming” smaller firms into settlements. He said that under his watch, the CFPB would focus on cases “really totally beyond the pale” where large companies “clearly knew what the rules were” yet did not comply.

“Focusing on larger participants in the market, I think, is one of the best ways we can accomplish our mission,” he continued. “What we saw over the past many years under both Democrats and Republicans were failures at the FTC. I don’t want to repeat that at the CFPB.”

Chopra’s criticism of the FTC came after several Republican lawmakers pressed him on his approach to enforcing the numerous and powerful rules under the CFPB’s jurisdiction. As head of the consumer bureau, Chopra has unilateral power to approve new rules for banks, lenders and a wide array of financial firms while also severely punishing those who violate them.

Chopra was among the first CFPB officials to lead the agency after it was established in 2011 through the Dodd-Frank Wall Street reform law and designed by Sen. Elizabeth Warren (D-Mass.). His seminal role in the CFPB’s creation and close ties to fierce financial sector advocates created unanimous Republican resistance to his confirmation.

“I would hope that having witnessed the harmful impacts of the Bureau’s overreach you will take a different approach than that of your predecessors, but once again, Democrats seem to have learned nothing and forgotten nothing,” said Rep. Patrick McHenry (N.C.), the ranking Republican on the Financial Services panel.

“You’ve made it clear that the CFPB will be run by Richard Cordray 2.0.,” he continued, referring to the bureau’s first director tapped during the Obama administration.

Under Cordray, the CFPB infuriated Republicans and the financial industry with sweeping new regulations and fierce enforcement actions against financial firms accused of abusing, misleading or neglecting their customers. The bureau loosened its reigns under Trump-appointed CFPB directors, but is expected to swing back to a Cordray-like regime under Chopra.

While Chopra committed to strict penalties for severe violations, he agreed with Rep. Ann Wagner (R-Mo.) that companies that self-report violations to the CFPB should not receive the same public condemnation as a firm looking to skirt the rules.

“Where companies have come forward, remediated and fixed issues, these things can be solved often without public enforcement action,” he said. “I want to encourage self reporting, but of course, where they have flagrantly violated the law and [are] not taking steps to fix things, enforcement action is usually appropriate.”

Wagner replied, “I hope that we’re not going to seek to punish companies and find them when they’ve already taken … the corrective active action and done the right thing.”

Chopra also won praise last week from Republicans lawmakers and banking industry groups for his opening salvo against big tech: a sweeping demand for details about the consumer financial data obtained by major technology companies with payment platforms.

“There’s so many people who feel that their data is being misused and abused. Many of us have no transparency whatsoever as to how some of these firms determine how they get people off platforms. And we have no transparency at all into a number of other issues,” Chopra said.

“I think safeguarding our nation’s payment system is so critical to our economy. It’s critical to small businesses. It’s critical to our national security. And I want to make sure that the payment system is vibrant and serving everybody.”