Avoiding another housing crisis is a major priority for the candidate for the leadership of the Office of Consumer Financial Protection. Rohit Chopra, President Joe Biden choose for the job, said the Senate Banking Committee during a confirmation hearing on Tuesday, the agency responsible for ensuring that financial institutions treat customers fairly must be prepared for the collapse of the housing due to the coronavirus pandemic.
“My intuition is that we need to be prepared for the potential problems that are approaching when it comes to tolerances that could turn into forced executions,” Chopra said. “I don’t want to see another foreclosure crisis in this country. And we need to do everything we can to make sure the laws are followed and that homeowners can navigate their options.”
The agency released a report on Monday warning that more than 11 million families are at risk of losing their homes amid the coronavirus pandemic. The report says 8.8 million families were left behind on rent and another 2.1 million families fell at least three months after their mortgages last year, an increase of 250 percent. Homeowners owe nearly $ 90 billion in missed payments, a level not seen since the height of the Great Recession. A federal ban on seizures will last until June, but it is unclear what will happen when it ends.
“Many families will fight. They have lost income, they may not be able to resume and we should make sure that they can stay in their homes when they have the ability to do so and not be deceived about their options, “Chopra said. who is currently a commissioner at the Federal Trade Commission and was announced as the president’s candidate for CFPB director in January. “No one should be fired during a quarantine, especially if he has been lied to.”
He said that unlike 2007, the CFPB, which was created in response to the housing crisis, was tasked with monitoring mortgage markets, working with regulators at all levels and having tools to help avoid risk. .
While millions are facing growing housing concerns in the United States, another growing challenge is the student loan crisis. Chopra noted in his earlier time in the CFPB during the Obama administration, the agency announced that the student loan debt exceeded the $ 1 trillion threshold. The Federal Reserve estimates that Americans now have debts of more than $ 1.7 trillion in student loans.
“It is one of the largest consumer credit markets in our country after mortgages and we need to make sure the law is followed,” he said.
Chopra also said that if confirmed, it will focus on data collection and how that data is used.
“I think there are real questions about transparency,” Chopra said, acknowledging concerns about discrimination. “Looking at how big the data is, especially the big platforms that have detailed behavioral data about all of us, is something we need to look at carefully, because it will fundamentally change financial services.”
Chopra is looking to run an agency that has been heavily criticized since its inception under President Barack Obama. During the hearing, Republicans questioned his authority, including enforcement capabilities, and its structure.
“It was created by our fellow Democrats under the Dodd-Frank Act as arguably the most irresponsible agency in the history of the federal government,” said Pat Toomey of Pennsylvania, a member of the rankings during the opening statements. “It’s a one-director agency that until recently the president of the United States has not been able to remove.”
That changed after The Supreme Court considered it unconstitutional in a 5-4 decision in 2020. Toomey argued that he is not yet accountable to Congress through the lending process.
Meanwhile, Democrats have been questioning the agency’s leadership for the past four years under the Trump administration. Senator Elizabeth Warren accused the nominees of acting as if they were working for big banks and destroying enforcement powers.
Chopra indicated that there will be increased application in the new administration.