Rohit Chopra lasted longer as director of the Consumer Financial Protection Bureau (CFPB) than expected. Observers anticipated the incoming Trump administration would fire him immediately after the Jan. 20 inauguration. Instead, he lasted nearly 12 days.
In a letter published on social media, Chopra reviewed some of the agency's more significant actions. "We have returned billions of dollars from repeat offenders and other bad actors ... and given more freedom and bargaining leverage to families navigating a complex and confusing financial system."
Chopra was openly despised by many on Wall Street for his aggressive regulation of bank fees, auto loans, mortgages and other products that nearly all consumers buy.
Consumer advocates rushed to Chopra's defense after his firing became known.
“Chopra exposed and penalized lending practices that disproportionately harmed consumers of color, and made clear that discrimination is unfair in any financial service,” said Richard Dubois, executive director of the National Consumer Law Center.
“With Trump’s payback to his billionaire Wall Street supporters, the nation now loses the vital, energetic, compassionate, and intelligent services of a great American," said Lisa Gilbert, co-president of Public Citizen. "The CFPB under Chopra eliminated many junk fees, capped credit card late charges, reformed reporting of medical debt, sued giant corporations, and elevated the total relief to consumers beyond $21 billion."
After his appointment by President Biden in 2011, Chopra lost no time launching a whirlwind of regulations that cut and capped industry "junk fees," sued big players, prosecuted lenders and enforced privacy laws.
Here are a few recent examples reported by ConsumerAffairs:
- Cash App fined $120 million
- Sued Capital One for "cheating" customers out of more than $2 billion
- Closed a "loophole" that netted big banks billions in overdraft fees
- Threatened to require banks to reimburse victims of the Zelle scam
Banks fight back
When the CFPB proposed capping bank overdraft charges at $14 for larger banks, the financial sector was quick to claim that the effect would be higher checking account fees and less service to consumers. An army of lobbyists descended on Congress to spread that message.
Brent Tjarks, executive director of the Mid-size Bank Coalition of America which represents more than 100 midsize banks, wrote that the loss of a "meaningful source of revenue to support the cost of deposit products" left institutions with no choice but to pull back from products "that benefit lower-income and underbanked consumers," The American Banker reports.
Former Sen. Pat Toomey, R-Pa. once called the CFPB "a rogue, unaccountable, anti-business agency."
Chopra's five-year term was scheduled to run through 2026 but a Supreme Court decision in 2020 ruled the president was free to fire the CFPB director without cause.
Chopra said after Trump's election that he would not resign but would leave peacefully if Trump fired him, as he did today.
The CFPB was created in 2011, largely through the efforts of Sen. Elizabeth Warren (D-Mass.), who in an earlier career as a college professor had authored an academic paper showing that medical debt was a primary cause of consumer bankruptcy.
The agency's fortunes have waxed and waned as Presidents come and go. It grew in importance and enacted tough regulations during the Obama and Biden administrations but was weakened and nearly eliminated during the first Trump term.
Warren vowed in November that the bureau would survive Trump's presidency. “The CFPB is here to stay,” she said in a Washington Post report.
“So I get there’s big talk, but the laws supporting the CFPB are strong, and support across this nation from Democrats, Republicans, and people who don’t pay any attention at all to politics, is also strong,” Warren said.