Looking Back at what Rohit Chopra Has Said About ARM Industry, Enforcement

Yesterday, President-elect Joe Biden officially announced the nomination of Rohit Chopra to be the next director of the Consumer Financial Protection Bureau. Chopra has spent the past two-and-a-half years as a commissioner with the Federal Trade Commission, which, like the CFPB, has enforcement authority over the accounts receivable management industry. To give the industry a sense of the direction that the CFPB might take under Chopra, here are some comments and excerpts from public remarks that he has made while at the FTC.

Comment on CFPB’s Proposed Debt Collection Rule (September 2019)

Chopra outlined his comments about the CFPB’s proposed debt collection rule in the context of how it would impact student loan borrowers in the United States.

“During my time at the CFPB, the agency identified serious deficiencies in the federal student loan collections industry.”

“… As the student loan industry’s primary regulator, the CFPB must do more to safeguard our economy and protect borrowers from abuse.”

Written Testimony Before House Financial Services Committee Hearing on “Examining Legislation to Protect Consumers and Small Business Owners from Abusive Debt Collection Practices” (September 2019)

“If we still believe that going to college and working hard can help an individual climb the economic ladder, we have to wake up to the realities of our broken student loan debt collection system and fix it. If we do not, we will kill the dreams of too many Americans seeking to own a home, start a small business, and raise a family.”

“Outside of student lending, I believe the Federal Trade Commission also needs to act on abusive debt collection and lending practices, especially where the CFPB cannot. There is $1.2 trillion in outstanding auto loan debt, as millions of families finance their primary means of getting to work, school, the doctor, and more. Technology has made it easier for lenders and debt collectors to seize cars without warning, and according to some reports, without justification. This is just one of the many issues that need government attention in this large and critical market. Yet despite receiving authority in 2010 to put commonsense rules into place to combat abuses in this market, the FTC has yet to make a proposal.”

Statement on 10th Anniversary of Dodd-Frank Wall Street Reform and Consumer Protection Act (July 2020)

“If we want a marketplace that works, the public must ensure that regulators use every tool available to rein in firms that abuse their power and break the law. We learned the hard way that the cost of inaction is too high.”

Statement in Matter of Midwest Recovery Systems (November 2020)

“In cases like these where there are almost no funds to distribute, I would prefer that the FTC closely cooperate with the debt collection industry’s primary federal regulator, the Consumer Financial Protection Bureau (CFPB), to obtain a civil penalty, even if the penalty were only $1. Under the Consumer Financial Protection Act, victims might then qualify for monetary redress under the CFPB’s Civil Penalty Fund. For the victims of illegal debt collection schemes, any recovery could make a big difference in their lives.”

“Several years ago, when the CFPB launched a rulemaking on third-party debt collection, the agency indicated that it planned to address first-party debt collection on a separate track. Despite support for this approach, it never did. Commonsense rules for ensuring accuracy in the collection and sale of debt would cut off at the source abuses like those seen in this case.”

“When it comes to ‘debt parking,’ a systemic fix likely requires changes in business practices by Equifax, Experian, Trans Union, and other credit reporting agencies. These companies can prevent illegal parking by heeding clear warning signs, such as by cutting off furnishers with unusually high deletion rates. The CFPB can address this problem by using its authority to define unfair, deceptive, and abusive practices by credit reporting agencies. It is critical that bad actors not be allowed to weaponize the credit reporting system against consumers.”

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