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**JUNE 29, 2022**
Kuttner on TAP
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**** The Regulator Bankers Love to
Hate
Rohit Chopra's efforts to protect consumers and defend the financial
rights of African Americans bring on the wrath of the business lobbies.
After the sadistic police murder of George Floyd in May 2020, several of
America's largest banks were shamed into committing serious money
to combat systemic racism and its legacy, the racial wealth gap. Bank of
America
(the nation's second-largest bank) and PNC
(seventh-largest) and Citi
(fourth-largest) each committed $1 billion to various groups and credit
streams.
However, the financial industry, whose actions led to the subprime
collapse targeted at African Americans, remains notorious for overt and
subtle forms of discrimination. So this past March, Rohit Chopra,
director of the Consumer Financial Protection Bureau, announced plans to
intensify the scrutiny of banks
for discriminatory practices, including an updated bank examination
manual. Chopra was using his authority under both the Equal Credit
Opportunity Act and the Consumer Financial Protection Act, which grants
CFPB broad authority to investigate "unfair, deceptive, or abusive acts
or practices [UDAAPs]."
The banker response was apoplectic. Several industry groups claimed
yesterday
that Chopra was overstepping the CFPB's authority to investigate them
for discrimination on things like opening accounts, arguing that fair
lending laws extend only to the provision of credit. This neglects the
UDAAP statutory language that Chopra is using. I guess it's one thing
for banks to extend charitable help to nonwhite groups; it's another
to have their own core business practices of making profits off the same
groups scrutinized by a public-minded regulator.
In addition, yesterday, acting on behalf of the bankers, the U.S.
Chamber of Commerce announced a massive campaign
to take down Chopra, mincing no words about either its intentions or its
tactics. The Chamber attacked Chopra's "ideologically driven agenda to
radically change the nature of America's financial services industry.
If allowed to proceed, his agenda would harm consumer choice and
innovation."
The Chamber announced a "new six figure digital ad campaign" against
Chopra and specifically faulted several of his actions. According to the
Chamber's outraged release, Chopra
* Described "repeat offenses" as "par for the course for many dominant
firms."
* Stated that financial regulators were "... clueless and often corrupt
lawyers and economists ... often seen as auditioning for a future job
..."
* Coined the term "junk fees" as "exploitive income streams" in a
heavy-handed attempt to vilify legal products that have well-disclosed
terms.
Sounds pretty good to me. With enemies like these, Chopra must be doing
something right. He might say, as FDR famously said of bankers, "They
hate me and I welcome their hatred."
~ ROBERT KUTTNER
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