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US consumer watchdog eyeing Big Tech, lending competition as recovery unfolds: Testimony

US consumer watchdog eyeing Big Tech, lending competition as recovery unfolds: Testimony

Signage is seen at the Consumer Financial Protection Bureau (CFPB) headquarters in Washington, DC, on Aug 29, 2020. (Photo: REUTERS/Andrew Kelly)

WASHINGTON: Chief consumer finance watchdog Rohit Chopra will tell lawmakers on Wednesday his agency wants to minimise foreclosures on struggling American homeowners and make consumer lending more competitive, according to prepared testimony from his inaugural address.

The US Consumer Financial Protection Bureau (CFPB) will also scrutinise the efforts of technology giants or "Big Tech" to gain greater control over the flow of money in the economy by offering real-time consumer payments systems, and the huge amounts of data they consequently control.

And, it will sharpen its enforcement focus on companies that repeatedly violate consumer finance laws.

Chopra, a longtime consumer advocate tapped by Democratic President Joe Biden to help address inequities in lending, will outline an ambitious agenda amid the continuing economic fallout from the coronavirus in his first hearing as CFPB director before members of the House Financial Services Committee at 10am EDT.

"In many parts of the country and in many individual neighbourhoods, conditions remain fragile," Chopra will tell the panel, according to the testimony. "Many families continue to struggle to afford their mortgage and rent payments. Many small businesses are facing severe challenges to make ends meet."

Chopra's appearance is likely to reinvigorate the CFPB's status as a political lightning rod. Republicans have sought to handcuff the agency since its creation, calling it overpowerful and unaccountable.

Sworn in as the CFPB's full-time director earlier this month, Chopra built his name as a fierce consumer advocate at the Federal Trade Commission, and previously helped Senator Elizabeth Warren set up the CFPB after it was created in 2010.

Chopra's record as a corporate critic and experience at the agency will likely make him a potent director, say analysts.

"This hearing should serve as a reminder of both the bureau’s broad authority and Director Chopra’s capacity to effectively use the bureau’s toolbox," said Isaac Boltansky, director of policy research for financial firm BTIG.

Just a few weeks into the job, Chopra made his mark when the CFPB ordered Amazon.com, Apple and Facebook to hand over information about how they gather and use consumer payment data.

His testimony said the agency will keep a close eye on practices that might impede competition by taking note of "the obstacles small local financial institutions face when seeking to challenge dominant incumbents, including in Big Tech."

That push for clarity is part of a growing interest among regulators and lawmakers about the rapid adoption of technology in various financial products, ranging from cryptocurrency to new "buy now, pay later" lending products.

Chopra's expansive agenda at the CFPB will also include revisiting several major rule easings ushered through under Republican leadership, particularly around debt collection and payday lending.

Advocates are eager to see Chopra erase industry-friendly changes ushered in under Republican leadership and impose tough new rules on the marketplace.

"We hope he will explain how he plans to supercharge the CFPB's efforts to protect consumers from credit reporting mistakes, forced arbitration, overdraft fees and predatory loans," said Michael Litt, a director at Washington-based US PIRG, a consumer advocacy group.

Source: Reuters

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