Chopra appointed to head the Consumer Financial Protection Bureau, Gensler to chair the Securities and Exchange Commission.
President-elect Joe Biden is expected to appoint Rohit Chopra as director of the Consumer Financial Protection Bureau, counting on a progressive ally of Democratic Senator Elizabeth Warren to head the agency she created.
Chopra, commissioner of the Federal Trade Commission, helped launch the CFPB after the 2008 financial crisis and served as deputy director, where the alarm went up about skyrocketing levels of student loan debt.
The choice came at a time when Democrats are looking for ways to provide relief to millions of Americans on student loans as part of a COVID-19 relief package.
Biden announced the move on Monday, along with his intention to nominate Gary Gensler, former chairman of the Commodity Futures Trading Commission, as the next chairman of the Securities and Exchange Commission.
Gensler, a former Goldman Sachs banker, has increased supervision at the CFTC of the complex financial transactions that helped cause the Great Recession.
Gary Gensler, chairman of the Commodity Futures Trading Commission, was chosen to chair the Securities and Exchange Commission [J. Scott Applewhite/AP Photo]
Gensler’s choice for Biden to lead the SEC signals a goal of turning the Wall Street watchdog into an activist role after a period of deregulation during the Trump administration.
Now a professor of economics and management at MIT’s Sloan School of Management, Gensler was assistant secretary of the Treasury in the Clinton administration and later headed the Commodities Futures Trading Commission during Barack Obama’s term.
With nearly 20 years of experience working at the powerful Goldman Sachs on Wall Street, Gensler surprised many by being a strict regulator of large banks as president of the CFTC.
Fluent in the nexus between politics and economic policy, Gensler was chief financial officer of Hillary Clinton’s 2016 presidential campaign against Donald Trump and economic advisor to Barack Obama in his 2008 presidential candidacy.
Gensler was a leader and consultant on the Biden transition team responsible for the Federal Reserve, banking issues and securities regulation.
Gensler replaces Jay Clayton, a former Wall Street lawyer who headed the SEC during the Trump administration. When he took office, Trump promised to soften the rules that affect Wall Street and the financial markets, and Clayton presided over a deregulation action.
The rules were loosened under the historic Dodd-Frank reform law of 2010 Wall Street, which tightened the reins of banks and investment firms in the wake of the 2008-09 financial crisis and the Great Recession.
The CFPB was created at Warren’s request as an independent agency under the Dodd-Frank Act. Its director had ample freedom to act alone, without obtaining the agreement of the agency’s board members.
While enforcing consumer protection laws, the CFPB has also been empowered to review the practices of virtually any company that sells financial products and services: credit card companies, payment lenders, mortgage agents, debt collectors, colleges car lenders and money. transfer agents.
Chopra was deputy to its first director, Richard Cordray, while the agency took coercive action against a number of companies large and small and returned tens of billions of dollars to consumers harmed by illegal practices.
The CFPB became the target of conservative Republicans. President Donald Trump appointed then-White House budget director Mick Mulvaney as acting director of the CFPB when Cordray left in November 2017.
Mulvaney was a vocal critic of the consumer protection agency and made profound changes to it, easing regulations on payday loans and withdrawing enforcement efforts. The agency has been led by Kathy Kraninger, appointed by Trump, since December 2018.
As one of two Democratic commissioners on the five-member Federal Trade Commission, Chopra has openly criticized the practices of large companies, especially the tech giant Facebook.
He expressed strong disagreements over the FTC’s actions against the company for breaches of privacy and alleged anti-competitive conduct, saying they did not go far enough.