Postponing another housing crisis is one of the top priorities of the nominee to head the Department of Consumer Financial Protection. Rohit Chopra, by President Joe Biden choice for work, told the Senate Banking Committee during a confirmation hearing on Tuesday that the agency charged with ensuring that financial institutions treat customers fairly needs to be ready for the consequences of housing due to the coronavirus pandemic.
“My intuition is that we have to be ready for potentially imminent problems when it comes to tolerances that can result in foreclosures,” said Chopra. “I don’t want to see another foreclosure crisis in this country. And we need to do everything in our power to ensure that laws are followed and 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 that 8.8 million families are behind on rent and another 2.1 million families were at least three months behind on their mortgages last year, an increase of 250%. Homeowners owe nearly $ 90 billion in missed payments, a level never seen since the height of the Great Recession. The federal ban on foreclosures runs until June, but it is unclear what will happen when it ends.
“Many families are going to have to fight. They have lost income, they may not be able to resume and we must ensure that they can stay in their homes when they have the ability to do so and make no mistake about what their options are, “said Chopra, who is currently a Commissioner for the Federal Commission. of Commerce and was announced as the president’s candidate for director of the CFPB in January. “Nobody should be expelled during a quarantine, especially if they lied to them.”
He said that, unlike 2007, the CFPB, which was created in response to the housing crisis, has been tasked with monitoring mortgage markets, working with regulators at all levels and has tools to help prevent risk.
While millions of people face growing housing concerns in the United States, another growing challenge is the student loan crisis. Chopra noted, during his previous time at the CFPB during the Obama administration, that the agency announced that student loan debt exceeded the $ 1 trillion limit. The Federal Reserve estimates that Americans now owe more than $ 1.7 trillion in student loans.
“It is one of the largest consumer credit markets in our country after mortgages and we have to make sure that the law is being enforced,” he said.
Chopra also said that if confirmed, he will focus on collecting data and how that data is being used.
“I think there are real issues about transparency,” said Chopra, acknowledging concerns about discrimination. “Watching how big data, particularly across large platforms that have detailed behavioral data about all of us, is something we must watch carefully because it will fundamentally change financial services.”
Chopra is trying to lead an agency that has been highly criticized since its creation under President Barack Obama. During the hearing, Republicans questioned its authority, including enforcement capabilities, as well as 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,” Pat Toomey, a ranking member from Pennsylvania, said during the opening speech. “It is an agency with a single director that until recently not even the president of the United States was able to remove.”
That changed after the The Supreme Court found this unconstitutional in a 5-4 decision in 2020. Toomey argued that he is not yet accountable to Congress through the appropriation process.
Meanwhile, Democrats have questioned the agency’s leadership over the past four years under the Trump administration. Senator Elizabeth Warren accused the nominees of acting as if they worked for big banks and destroying enforcement powers.
Chopra indicated that there would be more oversight under the new administration.