Today, Congresswoman Maxine Waters (D-CA), Chairwoman of the House Committee on Financial Services, gave the following statement at a full Committee hearing entitled, “Bringing Consumer Protection Back: A Semi-Annual Review of the Consumer Financial Protection Bureau.”
Good Morning. Today, we welcome Mr. Rohit Chopra the newly confirmed Director of the Consumer Financial Protection Bureau (CFPB) before our Committee.
Director Chopra, you have inherited an agency that was undermined by the Trump Administration, which actively worked to reduce consumer protections and enable predatory behavior against the most vulnerable. For example, Mick Mulvaney and Kathy Kraninger weakened the CFPB’s Office of Fair Lending and Equal Opportunity. During their tenure, only a total of four CFPB fair lending enforcement actions were taken, and regulator referrals to the Department of Justice for potential Equal Credit Opportunity Act violations declined by 58 percent.
Thankfully, their efforts to eliminate the CFPB were unsuccessful. The CFPB was founded on the principles of protecting consumers from unfair, deceptive, or abusive acts or practices in the financial marketplace. Since its inception, the CFPB has uncovered illegal, predatory, and discriminatory conduct toward consumers, returning over $13.4 billion to over 175 million consumers taken advantage of by bad actors.
Unfortunately, at a critical time during the COVID-19 pandemic, the Trump Administration left consumers exposed. The CFPB reported earlier this year that homeowners of color continue to face significant challenges. Specifically, while Black and Latinx borrowers represent only 18 percent of all mortgage borrowers, they are nearly three times as likely as White borrowers to report being behind on their mortgage payments or having a mortgage in forbearance. It is critical that the CFPB provides strong oversight of mortgage servicers to ensure they proactively work with all borrowers, providing affordable loan modifications to avoid unnecessary foreclosures.
Furthermore, the COVID-19 crisis highlighted the predatory behavior of debt collectors as thousands of people struggled to make ends meet and keep up with rent. A legal aid attorney from Texas testified that debt collectors made record profits by aggressively pursuing default judgments and, in some cases, seizing stimulus payments and unemployment benefits deposited into bank accounts.
And let’s not forget the role of the CFPB in promoting responsible innovation. With the rise of financial technology, the CFPB must take action to ensure that consumers have more control over their own data and are protected from discrimination and predatory products or services. Last week, you issued orders for information from big tech firms operating digital payment systems to learn, among other things, how they are handling sensitive consumer data and to what extent they are following the consumer protection laws.
So, Director Chopra, I look forward to your testimony and your leadership at a revitalized CFPB that can be the strong watchdog Congress always intended to protect consumers, especially those who have experienced historical discrimination such as people of color, women, and low wage workers, among others.