In late March 2015, just one month after 15 graduates of the for-profit Corinthian Colleges announced the first-ever student debt strike, a group of those activists traveled to Washington, D.C., to meet with federal regulators.
They’d been invited by Rohit Chopra, the student loan ombudsperson of the Consumer Financial Protection Bureau, a federal agency that had opened its doors just four years prior. The strike was against the Department of Education, but the CFPB had been investigating Corinthian for its predatory lending, and Chopra wrote that he’d like to discuss ways to address the activists’ burden.
At the CFPB’s offices across the street from the White House, Astra Taylor, co-founder of the Debt Collective—a national debtors union founded in the wake of Occupy Wall Street—remembers watching Treasury and Education Department officials shift uncomfortably in their seats, while Chopra remained friendly and curious. It was unusual, she said, to have someone in his position treat pressure from the grassroots as “not a threat but as a legitimate force with essential leverage.”
Chopra ended up leaving the agency a few months later, spending the last year of the Obama administration at the Education Department, an agency he had publicly critiqued for belittling the harms of the student loan crisis, followed by a post under Donald Trump at the Federal Trade Commission. But with a Democrat back in the White House, the CFPB needs fixing after a ruinous four years, and President Joe Biden tasked Chopra to return to his old agency. He’s been leading the CFPB since the Senate confirmed him as director in late September.
Chopra, who turned 40 at the end of January, served as student body president while an undergraduate at Harvard, where he earned a reputation for taking on campus administrators. “Chopra is not afraid to be combative with those in power … [and] has made the often overlooked council a force to be reckoned with,” reported The Harvard Crimson in 2003. “There’s no advantage to being a pushover,” Chopra told the student paper back then. He followed his Wharton MBA with a Fulbright in South Korea and a stint working for McKinsey. But by his late twenties he had switched to government, working at the Treasury Department to help launch the CFPB before it was an official agency. And along the way, he became a close ally of Elizabeth Warren, whose views he’s expected to revive at a CFPB that became captured by the GOP’s pro-bank dogma under Trump.
Born out of a 2007 essay published in Democracy, the CFPB’s mission, conceived by then-professor Warren and later enshrined in the Dodd-Frank Act after the Great Recession, is to regulate tricks and traps in the credit industry and make finance safer for regular people. “Financial products should be subject to the same routine safety screening that now governs the sale of every toaster, washing machine, and child’s car seat sold on the American market,” Warren wrote at the time.
In its first decade of operation, the CFPB emerged as one of the most admired and hated divisions in government. In 2017, President Trump called it a “total disaster,” and a week later Politico dubbed it “the most powerful and consequential new federal agency since the Environmental Protection Agency opened its doors nearly half a century ago.” The EPA comparison is a bit overstated, but since its founding the consumer watchdog has gone after all sorts of predatory actors, from large financial institutions to debt collectors. Under its first director, Richard Cordray, the CFPB returned almost $12 billion to tens of millions of Americans, extracting from companies a combination of consumer refunds and canceled debts.
That changed after Cordray’s resignation. During the Trump years, employee attrition spiked—with nearly 11 percent of staff leaving in 2018—and there was also a marked decline in investigations into potential lawbreakers. The New York Times Magazine ran a feature in 2019 exploring how Trump’s picks to lead the CFPB—first Mick Mulvaney, followed by federal budget official Kathy Kraninger—had quietly crippled its operations. “Where Mulvaney or his successor have allowed cases to go forward, lenders have often settled with lowered fines or none at all,” the magazine reported. Instead of a watchdog, Trump’s CFPB became a welcoming home for bank lobbyists. In 2020, a divided U.S. Supreme Court ruled that the president could fire the CFPB’s director without cause, a victory for its conservative critics who claimed the director’s independent five-year term was too unaccountable. While initially a win for Republicans, that same decision allowed Biden to immediately oust Kraninger.
Chopra returned to his old employer last fall, just as Covid-19 relief programs were winding down. By the end of June 2021, Americans owed $15 trillion in debt—roughly $800 billion more than at the end of 2019. “In many parts of the country and in many individual neighborhoods, conditions remain fragile,” Chopra acknowledged before the U.S. Senate Banking Committee in late October.
Those are the conditions out in the world. Inside the agency itself, he is taking over a department that has been rocked by staff protest, including charges dating back to the Obama years of racial discrimination and promotions based on favoritism. The president of the National Treasury Employees Union, Tony Reardon, offered cautious support, saying his union is “pleased that CFPB’s new leadership is working with us to use this opportunity to close the pay gaps for employees of color.”
Three weeks after he was confirmed as director, Chopra ordered tech titans such as Apple, Amazon, and Google to disclose details of their proprietary payment systems, to better understand what kinds of data they collect and what protections consumers have. It was an extension of the Big Tech inquiries he was fond of in his last job as a Democratic representative at the FTC. He followed up shortly after by announcing that the CFPB would potentially seek consumer protections for the $131 billion stablecoin market, a largely unregulated cryptocurrency that’s grown quickly in the last year.
“We are focusing on large market actors that are causing the most widespread harm, especially companies that exploit their dominant market position to take advantage of consumers and their law-abiding competitors,” Chopra told The New Republic. “You can also expect a sharper focus on repeat offenders.… Stopping that is going to require real deterrents, not just fines that are absorbed as a cost of doing business.” Asked what is meant by “real deterrents,” an agency spokesperson pointed to a 2018 memo Chopra wrote at the FTC, recommending measures like holding individual executives accountable and issuing bans on adjacent business practices. “He’s not someone who is going to be content with tinkering around the edges, and he can look down the road to see where things are headed,” said Lauren Saunders, the associate director at the National Consumer Law Center.
Since its founding, the CFPB has faced pressure to crack down on the payday lending industry—the businesses that offer cash-strapped individuals small loans with high interest rates and fees. The CFPB started collecting borrower complaints in 2013, reporting by 2014 that 80 percent of payday loans get rolled over or renewed within two weeks, a clear signal of a debt trap. In the last year of the Obama administration, the CFPB proposed a rule requiring payday lenders to verify that borrowers were financially capable of paying back their loans on time. It was finalized in October 2017, before Cordray resigned.
But it was blocked by litigation and the Trump White House. His administration’s alternate version—issued in 2020—had no such requirement. In effect, little has yet changed for payday loans. Chopra will not only have to wade back into this debate but also have to contend with the ways these small loans have continued to evolve.
Over the past decade, a suite of new companies cropped up to allow workers to get advances on their paychecks, in exchange for a fee. Under Trump, officials recommended that these so-called earned wage access products not be regulated as credit, but consumer and labor groups have urged Chopra to revoke this guidance, which they say creates dangerous payday loan loopholes. Chopra told me the CFPB will “be looking closely” at it, and that more broadly he’s concerned about the rise of employer-driven debt, such as workers taking out loans for training, equipment, or leads. “This is a troubling trend,” he said, “and as the distinction between consumers and workers blurs, we are going to be increasingly active in this space.”
Thanks to his early days at the CFPB, Chopra has spent years as a close ally of Elizabeth Warren. “I have no doubt you are the right person to lead the bureau at this moment,” the senator said at his confirmation hearing last year. Thanks to that friendship, progressive advocates have been optimistic about the direction Chopra will take the agency. “He’s extraordinarily progressive, but was also one of the very few registered Democrats to get confirmed through the McConnell gauntlet in the Trump years,” noted Felicia Wong, president of the Roosevelt Institute, a think tank where Chopra worked briefly as a fellow.
Still, as the payday lending jockeying illustrates, enacting reforms that can actually last will not be easy, which may partly explain why Chopra’s early actions have been focused on shinier Big Tech issues like Apple Pay or cryptocurrency. National consumer groups have granted trust to the CFPB’s new director, thanks to his background, but that goodwill may have also led to muddled silence on the agency’s new debt collection rule, which was issued in the final stretch of the Trump administration and took effect in November.
Advocates blasted the rule, which clarifies how debt collectors can communicate with borrowers, when the Trump CFPB finalized it in late 2020. They noted that it could open the floodgates to more daily harassment and revive obligations for payments individuals were no longer on the hook for. Yet when it became clear the Biden administration would not withdraw or delay it, advocates went generally silent.
Chopra didn’t directly answer why the CFPB was moving forward with the rule, but told me he agreed that it “didn’t solve most problems in the debt collection market,” and that debt collection “continues to be one of the top topics for consumer complaints.” According to an agency spokesperson, the CFPB received an average 80,000 consumer complaints each month in 2021, up a stunning 75 percent from 2020.
How long the CFPB’s new grace period will last among its more sympathetic allies remains to be seen, especially with credit card debt going back up and foreclosures looming. The CFPB at least embarks on its next chapter with more aggressive regulators heading up other critical agencies, including Lina Khan at the FTC and Gary Gensler at the Securities and Exchange Commission. And thanks to his job at the CFPB, Chopra serves as a board member at the Federal Deposit Insurance Corporation. In December, Chopra and his fellow Democratic board members battled FDIC Chair Jelena McWilliams, a Trump appointee who refused the board members’ decision to ask for public comment about bank mergers. “This approach to governance is unsafe and unsound. It is also an attack on the rule of law,” Chopra said in a statement at the time. On New Year’s Eve, McWilliams abruptly announced that she’d be resigning, giving Biden the opportunity to appoint yet another consumer-minded regulator.
Democrats in Congress are also leaning more aggressively into strengthening consumer protections, proposing to crack down on things like bank overdraft fees and exorbitant interest rates, which could give Chopra more room to act politically, even without new statutory powers. Not to mention the student loan landscape has changed dramatically since Chopra’s old days at the CFPB. The Education Department has canceled billions of dollars in loans since the Corinthian graduates first went on strike, and activists are ramping up pressure on Biden now to cancel student debt entirely. In late December, the White House announced it would push back the return of mandatory student loan repayments, originally to resume in February, until May.
The seeds at the CFPB, at least, are ripe. Maybe the agency’s next decade will leave a more lasting mark than its first.
This article appeared in the March 2022 print edition with the headline “Wall Street’s New Foe.”