WASHINGTON — Democrats are urging the Consumer Financial Protection Bureau to put racial equity at the core of its agenda, using action on mortgages, student loans and even its own hiring to help close a wealth gap.
House and Senate Democrats said in interviews that the agency under President Joe Biden should return to a more aggressive policing of discrimination in the consumer financial sector. One House Democrat has even introduced a bill that would revive and expand undercover CFPB investigations of lending practices.
The Democrats’ comments are not only an indication of what they expect from the next CFPB director, but also a signal of what he can expect — if he’s confirmed — when he appears before Congress.
Biden’s nominee, Rohit Chopra, is awaiting a Senate vote. Democrats will have to discharge his nomination from committee before voting on confirmation because the Senate Banking panel was deadlocked in the March vote to advance him.
“A strong agency is going to help us take on structural racism,” Senate Banking Chairman Sherrod Brown, D-Ohio, said in an interview. “We know that there is all kinds of discrimination in people’s dealings with financial institutions. … The people that need the help the most, the people that have been hurt the most, are more likely to be women and more likely to be people of color.”
Established by the 2010 financial overhaul, the CFPB polices financial institutions’ dealings with consumers. The agency has jurisdiction over banks, credit unions, securities firms, payday lenders, mortgage and student loan servicers, and debt collectors.
Under President Barack Obama, the agency’s aggressive enforcement agenda returned $11.9 billion to 29 million consumers, according to CFPB data.
Enforcement actions plummeted by 80 percent under President Donald Trump, according to a 2019 study by the Consumer Federation of America that used a 2015 baseline for the comparison. The consumer advocacy group found that the average financial relief for consumers fell 96 percent during that same period.
The CFPB spent the first half of Trump’s term embroiled in a legal fight over whether the president could dismiss the director without cause. The Supreme Court ultimately ruled that he could, paving the way for Trump to install Kathleen Kraninger as the agency’s head.
Biden dismissed Kraninger when he took office and nominated Chopra, a CFPB alumnus and now a commissioner on the Federal Trade Commission.