President Biden’s nominee to head the Consumer Financial Protection Bureau has raised concerns among Republicans for a 2018 report in which he argued for the creation of a regulatory “super-agency” that critics say could target conservative advocacy groups.
Chopra, currently a member of the Federal Trade Commission, helped Sen. Elizabeth Warren organize the agency after the 2008 financial crisis. He worked at the agency until joining the FTC in 2018.
The paper — co-written by Chopra and Julie Margetta Morgan, who now works as a senior adviser in the Department of Education — calls for a new agency that consolidates the “overlapping mandates” of inspectors general and the Government Accountability Office “into a single agency with real powers to enforce and police corruption.” It was published by the Roosevelt Institute, a left-leaning think tank.
The proposed Public Integrity Protection Agency, like the CFPB, would not receive its funding from congressional appropriation and would have the power “to bring civil and criminal enforcement actions in federal court, along with issuing civil money penalties,” in addition to having the authority “to inspect and investigate individuals and companies seeking to influence federal officials.”
Chopra suggested that in order to preserve the agency’s independence, the agency could be run by a director selected by the president “from among a list of candidates prepared by the United States Supreme Court or the United States Court of Appeals” to serve for up to 10 years.
“The new PIPA wouldn’t just be responsible for policing the bureaucracy. It would also have jurisdiction over think tanks, advocacy groups and other organizations that seek to influence the political process,” the report reads. “The PIPA could propose and enforce new rules on funding disclosure, making clear to lawmakers, regulators and the public when organizations are speaking on behalf of particular donors.”
The report also called on the PIPA to address the “revolving door” of outgoing government officials profiting from their time in government and incoming officials crafting policies that benefit former employers.
Such policies would, in theory, have real implications for the Biden administration. Treasury Secretary Janet Yellen received upward of $800,000 from Citadel, one of the hedge funds embroiled in January’s GameStop stock mania. That firm’s CEO, Ken Griffin, will appear before the House Financial Services Committee this week, following a meeting Yellen convened earlier this month with heads of the Securities and Exchange Commission, the Federal Reserve Board, and the Commodity Futures Trading Commission to discuss market volatility surrounding GameStop trades.
The CFPB has long been a cause of Republican displeasure. The 2016 Republican platform, which was also used as the party’s 2020 platform, called the CFPB a deliberately “rogue agency” that “answer to neither Congress nor the executive.” The platform claims that the agency uses its “dictatorial powers” to harass local and regional banks and called for it to be abolished.
Former Republican congressman Mick Mulvaney, whom former President Donald Trump tapped to lead the CFPB in 2017, called the agency “a joke, in a sick, sad kind of way.” After reintroducing a bill to repeal the CFPB, Sen. Ted Cruz said that “there has never been a greater farce and waste of government resources than the Consumer Financial Protection Bureau.”
Republicans are concerned that Chopra’s “aggressive style” in the student loan division, coupled with the report’s emphasis on broad federal regulatory authority, indicates a return to tactics used by the CFPB in the past to overstep its authority.
“It’s a window into what Chopra’s approach would be at the CFPB,” one Republican aide familiar with the situation told the Washington Examiner. “The CFPB is notorious for an aggressive posture where the law is seen as an impediment to their job, and from his writings, it seems that he comes at this from the perspective that business is evil, consumers are rubes, and an all-knowing, all-powerful bureaucrat will protect them.”
The aide suggested that under Chopra, the CFPB could revisit auto lending guidance that was repealed in 2018 and the dialed-back payday loan rule that was adjusted under Mulvaney’s directorship.
Attempts to contact Chopra were unsuccessful.