The CFPB Returns to the Spotlight
If you were hoping for four more years of relatively docile consumer protection, President Biden’s nomination of Rohit Chopra to lead the Consumer Financial Protection Bureau should be understood as clear indication that your hopes will be dashed. Assuming his Senate approval, Chopra will remake the CFPB as the muscular uber-regulator envisioned by its architect Elizabeth Warren.
Chopra is very much a known quantity. He helped launch the CFPB with Warren a decade ago and he served as the Bureau’s student loan ombudsman until 2018, when he left for the FTC. During that time he frustrated private student loan lenders by applying public pressure to obtain concessions. Lenders quickly found themselves fighting public relations and regulatory battles simultaneously. Chopra has continued this approach – part regulator, part social media scold – as a Commissioner at FTC. A cursory review of his official FTC Twitter feed over the last several days reveals a surprising level of rank activism across multiple industries, including criticisms of credit reporting firms, healthcare insurers, facial recognition technology, mobile app stores and landlords.
A model of consistency, we should expect the same combination of vigorous oversight and very public excoriation as Chopra takes the helm at the CFPB. Of course, this is no cause for panic, but it is a good time to remember that we work in a financial services industry under the inquisitive gaze of the apex regulator. Best to stay on the right side of all the Do Not Cross lines.
What does all this mean for Collateral Protection Insurance? Most insurance products, CPI included, are outside the CFPB mandate. Insurance companies, agencies and products are creatures of state insurance department regulation. The CFPB has no direct authority over a CPI program, but it can challenge the manner in which a finance company uses CPI if the Bureau deems it unfair, deceptive or abusive. As a result, your CPI program may end up in the regulatory crosshairs if you’re not careful. Over the next several weeks we will be sharing our thoughts on the how to keep your CPI program technically compliant and clear of Mr. Chopra’s Twitter feed.
Standby.
