Biden chooses Rohit Chopra for consumer watch, Gary Gensler as SEC head

WASHINGTON – President-elect Joe Biden has chosen Rohit Chopra to be the director of the Consumer Financial Protection Bureau, bringing in a progressive ally of Senator Elizabeth Warren to lead the agency she championed for creation.

Chopra, now a commissioner at the Federal Trade Commission, helped launch the consumer agency after the 2008-09 financial crisis and served as deputy director, where he sounded the alarm bells about soaring levels student debt. The choice comes as Democrats consider ways to provide student loan relief to millions of Americans under a COVID-19 aid package.

Biden announced the move on Monday, along with plans to appoint Gary Gensler, former chairman of the Commodity Futures Trading Commission, as the next chairman of the Securities and Exchange Commission. Gensler, a former Goldman Sachs banker, stepped up oversight of the complex financial transactions that helped trigger the Great Recession.

Biden’s choice of an expert with experience as a powerful market regulator during the financial crisis to lead the SEC signals the goal of turning the Wall Street watchdog into an activist role after a period of deregulation during the Trump administration.

Consumer and investor groups have praised Gensler and Chopra’s selections. Both must be confirmed by the Senate, which will be controlled by the Democrats.

Gensler, now a professor of economics and management at MIT’s Sloan School of Management, was Assistant Secretary of the Treasury in the Clinton administration and then headed the CFTC during Barack Obama’s tenure. Having worked for nearly 20 years for Wall Street powerhouse Goldman Sachs, Gensler surprised many by being a tough regulator of big banks as chairman of the CFTC.

Fluent in the connection between politics and economic policy, Gensler served as CFO of Hillary Clinton’s 2016 presidential campaign against Donald Trump and Obama’s economic adviser during her 2008 presidential bid.

Gensler was a leader and advisor to Biden’s transition team responsible for the Federal Reserve, banking matters and securities regulation.

Jay Clayton, a former Wall Street lawyer who led the SEC during the Trump administration, chaired a deregulation campaign to ease rules affecting Wall Street and financial markets, as Trump promised when he took office . The rules of the Dodd-Frank Act that tightened the reins of banks and Wall Street in the aftermath of the financial crisis and the Great Recession have been stifled.

“Gensler will urge the SEC not to make fundraising easier for companies and to protect unsuspecting investors,” said Erik Gordon, assistant professor of commerce at the University of Michigan. “His history in the Obama administration leaves him few friends on the Republican side – and he probably doesn’t care. “

The top Republican on the House Financial Services Committee, Rep. Patrick McHenry of North Carolina, said Gensler’s receptivity to new financial technologies and cryptocurrency is positive. But he added: “I’m afraid the Democrats want to take the (SEC) away from bipartisan middle ground in an attempt to achieve their most partisan goals.”

Sen. Sherrod Brown of Ohio, the top Democrat on the Senate Banking Committee who is expected to become its chairman, said Gensler’s track record as a regulator “shows he will hold bad actors accountable and push interests working families first “.

Brown said Chopra will return the Consumer Financial Protection Bureau to its core mission of consumer protection and “will also ensure that the agency plays a leading role in addressing racial inequalities in our financial system.”

The CFPB was created at Warren’s request as an independent agency by the Dodd-Frank Act. Its director had a wide latitude to act alone, without obtaining the agreement of the members of a board of directors.

While enforcing consumer protection laws, the CFPB has also gained the power to review the practices of virtually all businesses selling financial products and services: credit card companies, payday lenders, mortgage agents, mortgage agents, collections, for-profit colleges, auto lenders, money-transfer agents. Chopra was deputy to its first director, Richard Cordray, as the agency took enforcement action against a range of businesses, large and small, and returned tens of billions of dollars to consumers harmed by illegal practices.

The CFPB has become a prime target of conservative Republicans. Trump appointed Mick Mulvaney, then White House budget manager, as interim CFPB director when Cordray left in November 2017.

Mulvaney had sharply criticized the consumer agency and dramatically changed it, loosening regulations on payday loans, for example, and withdrawing enforcement efforts. The agency has been headed by Trump-appointed Kathy Kraninger since December 2018.

As one of the two Democratic commissioners of the five-member Federal Trade Commission, Chopra has strongly criticized the practices of large corporations, especially tech giant Facebook. He filed strong dissent over the FTC’s actions against the company for breach of privacy and alleged anti-competitive behavior, saying they did not go far enough.

-Marcy Gordon and Zeke Miller

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