Archive for 2021

CFPB, SEC Chair Appointments Begin Senate Hearing

CFPB Chair Nominee Rohit Chopra (“Chopra like Oprah” he explained) and SEC Chair nominee Gary Gensler faced questions from Senators in the first confirmation hearings on Tuesday.

The pair were fielded questions over a video call. The confirmation hearings are mostly ceremonial; with a partisan house and senate, it is unlikely either appointment will be blocked.

Senators used their time to make question-statements featuring popular political talking points. Topics ranged from student loan finance reform, Bitcoin and crypto regulation, environmental reform through business regulation, and retail stock trading protections.

The appointees answered in the uniform tone of life-long public servicemen that have mastered the art of not directly answering questions. Each demonstrates their respective regulator points of view through action. By Reading each appointee’s resume, it becomes clear why they were chosen for Biden’s regulatory offices.

Chopra became a secretary at the CFPB when the organization was minted in 2008, and he focused on regulating student loans. The CFPB under Chopra will likely focus on extending CFPB regulatory controls over lending, payday lending, student debt, and possibly even fintech lending.

Gensler was the Commodity Futures Trading Commission’s chair, and he helped scale up securities regulation following the housing crisis, his work creating the Dodd-Frank act. The SEC will likely ramp up regulatory action over crypto-currency and address concerns with retail investing and public security sales.

“Technologies change, and markets change, but we should always evaluate new approaches to markets,” Gensler said in response to questions about stock trading and gamification.

Steve Daines, a Republican from Montana, asked Chopra his opinion whether the CFPB should be led by a multiple-member commission to avoid politicization over the leadership. Chopra said it wasn’t up to him.

“It’s the job of Congress to decide the agency structure. In my view, regardless if it’s a single director, there needs to be accountability, responsiveness,” Chopra said. “Where I sit at the FTC, this agency has missed some of the worst engagements when it comes to big tech privacy, while the CFTC under Gary did take action and was transparent.”

When the Trump administration attempted to appoint a new CFPB director, the Obama chair claimed it was illegal for the president to seat a new chair. In June last year, the Supreme Court said that was unconstitutional, and like most other executive offices, the president has the power to appoint leaders.

Chopra did say that regulating student loan debt was something under the purview of the CFPB. He was asked if CFPB had the authority to address the $1.7 trillion in student loan debt.

“Yes, my understanding is that the existing law and regulations, those financial services are covered.” He said.

Senator John Kennedy, a Louisianan democrat who tuned republican after 2007, asked Gary Gensler about the great recession and his time creating regulation at the US Treasury in the aftermath.

“Why didn’t anybody go to jail?” Kennedy said.

“Well, I wonder the answer to that question too; I was pursuing civil cases. It is largely up to the Department of Justice,” Gensler tried to answer. “These cases are hard to try and hard to find intent.”

Bill Hagarty, a Republican from Tennessee, asked Gensler about using business regulatory offices for social reforms, using the local proverb “You don’t shoot where the rabbit was.”

Andrew Smith Recalls Era as FTC Director

Andrew Smith, who became Director of the FTC’s Bureau of Consumer Protection (BCP) in 2018, ended his time with the agency on January 29, 2021. In a LinkedIn post recapping his tenure there, he said:

Despite a month-long government shutdown and a once-in-a-century pandemic, BCP brought more than 200 enforcement actions against companies great and small, including many household names, obtaining strong injunctions and billions of dollars in civil penalties and consumer redress.

BCP also had several firsts, including the first cases holding technology platforms liable in connection with user-generated content; the first small business financing cases; the first cases against VoIP service providers and finance companies for assisting and facilitating fraud; the first cases involving fake reviews, fake rankings and consumer review gag provisions; the first fair lending case at the FTC in more than a decade; the first paperless redress program; and the first CBD cases.

The FTC has been going through some changes with the introduction of a new administration. FTC Commissioner Rohit Chopra, for example, will be the next head of the CFPB, pending his confirmation.