Rohit Chopra CFPB Approach: Increased Enforcement and a Shift in Direction

Massachusetts Senator Elizabeth Warren proposed and created the CFPB under President Obama in 2010. Rohit Chopra of the CFPB supports Senator Warren, which means he is likely to take the agency in a different direction than former CFPB director Kathy Kraninger.

Kraninger, currently a lobbyist for a cryptocurrency company, preferred to go after small firms. Also, she was far less aggressive in pursuing enforcement activities than the previous administration.

Senator Patrick Toomey said that with Chopra in charge, the CFPB would once again be an agency that established rules using force. According to Toomey, Rohit Chopra of the CFPB sent out tweets about credit union accusations. Toomey said that the CFPB retracted Chopra’s tweets, which was a signal that Chopra would be the kind of leader who would “shoot first and ask questions later.”

The Future Under Rohit Chopra CFPB

Other financial industry experts predict that Chopra will direct the CFPB the same way the agency’s first director, Richard Cordray, did. He oversaw the CFPB from 2012 to 2017. When Cordray was the director, the agency recovered an estimated $12 billion in fines from financial organizations like Bank of America, Wells Fargo, and JPMorgan Chase.

The chair of the Senate Banking Committee, Ohio Democratic Senator Sherrod Brown, expressed support for nominating Rohit Chopra to the CFPB. Motioning toward the lobbyists standing outside the Senate chambers, several members advised the mortgage industry to “brace themselves.”

Brown said, “The people that Chopra will be paid to protect don’t have lobbyists, or a political action committee, and certainly not a SuperPAC.”

This new appointment will be Chopra’s second time working for the CFPD. In 2011, Chopra received the appointment to be the agency’s student loan ombudsman. In 2018, the Senate unanimously confirmed his current position with the Federal Trade Commission. In this position, he has pressed for more hardline solutions against significant technology companies, such as Facebook, in his opposing opinions.

Final Thoughts

In January, President Joe Biden recommended Rohit Chopra to the CFPB. However, Chopra’s confirmation hearing in March concluded in a draw, which caused the nomination to be sent to the Senate for a vote. The confirmation hearing happened after Chopra met with the Senate Banking Committee and told them that the CFPB should inspect impending problems in forbearances.

When Rohit Chopra of the CFPD addressed the committee, he said, “I don’t want to see another foreclosure crisis in this country.” He also said, “We need to do everything we can to ensure the laws are being followed and homeowners can navigate their options.”

In his opening comments to the committee, Chopra said, “In the mortgage market, fair and effective oversight can promote a resilient and competitive financial sector and address the systemic inequities faced by families of color.” He said, “Perhaps most importantly, administration of consumer protection laws can help families navigate their options to save their homes.”

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The Role of Federal Agencies and Accessibility of HMDA Data

The Department of Housing and Urban Development, Federal Reserve, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency HMDA data, and National Credit Union Administration process the information on behalf of the CFPB. Together, these agencies form the Federal Financial Institutions Examination Council (FFIEC). After processing, they make it available to the public through various tools, including an online database browser and a mapping system.

To make the data easier for non-statisticians or analysts, the CFPB created a document called the Beginner’s Guide to Access and Using Home Mortgage Disclosure Act Data. It functions as a set of guidelines for accessing and using HMDA information. This document, created by the CFPB Compliance division, also aims to ensure CFPB compliance among lending institutions.

Reporting Requirements and Data Points for CFPB Compliance

The HMDA requires financial institutions to follow CFPB compliance rules, including maintaining, reporting, and disclosing loan-level information on every mortgage. Journalists, activists, and other interested parties can use it to check whether lenders are serving the needs of community members seeking mortgage loans. Investors use the information to make decisions, and community leaders and organizations use the information to determine if lenders are making decisions with CFPB compliance in mind. Government agencies also use the HMDA data to create community housing policies.

Most mortgage lenders must report data through the HMDA. This includes banks and non-bank mortgage lenders. The CFPB Compliance division does offer a few exceptions. If an institution does not have a home or branch office in a metropolitan statistical area (MSA) by December 31, it does not have to comply with the HMDA reporting requirements. If it did have a branch or home office in an MSA, it must have received, purchased, or created at least five reportable loans for property within that same MSA to be accountable to HMDA reporting requirements.

Available data points include the purpose and type of the loan, the borrower or borrowers’ demographic information, the location and appraised value of the property, the action taken by the financial institution for the application, the total loan amount, the loan’s interest rate and points and fees associated with the loan. Not all data points apply to each loan type. For example, if the lender denied the loan, there would be no points or fees. When data isn’t required for a particular field, the data browser shows it as “not applicable.”

To Conclude

Before the CFPB releases the data, it modifies it slightly to protect the privacy of mortgage loan applicants and borrowers. Since Congress passed HMDA in 1975, its requirements have been modified. Most of those changes focused on what data lenders must report under the HMDA to maintain compliance with the law. Anyone can access the data by visiting https://ffiec.cfpb.gov/ and selecting the browser or the mapping tool.

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