Graeme Sloan/Sipa USA via AP Images
Consumer Financial Protection Bureau Director Rohit Chopra testifies during a Senate Banking Committee hearing, April 26, 2022.
After the sadistic police murder of George Floyd in May 2020, several of America’s largest banks were shamed into committing serious money to combat systemic racism and its legacy, the racial wealth gap. Bank of America (the nation’s second-largest bank) and PNC (seventh-largest) and Citi (fourth-largest) each committed $1 billion to various groups and credit streams.
However, the financial industry, whose actions led to the subprime collapse targeted at African Americans, remains notorious for overt and subtle forms of discrimination. So this past March, Rohit Chopra, director of the Consumer Financial Protection Bureau, announced plans to intensify the scrutiny of banks for discriminatory practices, including an updated bank examination manual. Chopra was using his authority under both the Equal Credit Opportunity Act and the Consumer Financial Protection Act, which grants CFPB broad authority to investigate “unfair, deceptive, or abusive acts or practices [UDAAPs].”
The banker response was apoplectic. Several industry groups claimed yesterday that Chopra was overstepping the CFPB’s authority to investigate them for discrimination on things like opening accounts, arguing that fair lending laws extend only to the provision of credit. This neglects the UDAAP statutory language that Chopra is using. I guess it’s one thing for banks to extend charitable help to nonwhite groups; it’s another to have their own core business practices of making profits off the same groups scrutinized by a public-minded regulator.
In addition, yesterday, acting on behalf of the bankers, the U.S. Chamber of Commerce announced a massive campaign to take down Chopra, mincing no words about either its intentions or its tactics. The Chamber attacked Chopra’s “ideologically driven agenda to radically change the nature of America’s financial services industry. If allowed to proceed, his agenda would harm consumer choice and innovation.”
The Chamber announced a “new six figure digital ad campaign” against Chopra and specifically faulted several of his actions. According to the Chamber’s outraged release, Chopra
- Described “repeat offenses” as “par for the course for many dominant firms.”
- Stated that financial regulators were “… clueless and often corrupt lawyers and economists … often seen as auditioning for a future job …”
- Coined the term “junk fees” as “exploitive income streams” in a heavy-handed attempt to vilify legal products that have well-disclosed terms.
Sounds pretty good to me. With enemies like these, Chopra must be doing something right. He might say, as FDR famously said of bankers, “They hate me and I welcome their hatred.”
