Rohit Chopra, director of the Consumer Financial Protection Bureau (CFPB), center, is expected to resign over the next two months and conclude a tenure of increased regulatory scrutiny for financial services firms and fintechs.
The Consumer Financial Protection Bureau (CFPB), a federal agency championed by Massachusetts Senator Elizabeth Warren in 2011 to protect consumers against predatory financial services, has ramped up enforcement actions against fintech and financial services companies under President Biden. In 2023, it ordered $3.1 billion in fines and refunds for consumer relief, the largest sum it had ordered since 2015. Just yesterday, it finalized a rule saying that some big tech firms like Apple that offer payment apps will be subject to CFPB supervisory exams, like banks. But with the advent of a Republican-controlled Congress and a second Donald Trump administration, dramatic changes are coming to the agency.
Penny Lee, who leads Washington, D.C.-based lobbying group the Financial Technology Association, expects CFPB Director Rohit Chopra to resign over the next couple of months. Other policy experts agree, since federal agency heads typically leave at the time of an administration change. Yesterday, for example, Securities and Exchange Commission Chair Gary Gensler announced he’ll step down on January 20, 2025, Trump’s inauguration day.
Many also predict lighter regulation and oversight during Donald Trump’s second term. Fintech companies will have “a little more room to innovate–to try new products and services without fear of regulatory or enforcement reprisal,” says one financial services policy expert. The number of CFPB regulatory advisories and enforcement actions will likely shrink.
At the top of D.C. insiders’ list for the next CFPB director is Brian Johnson, the former deputy director of the CFPB during Trump’s first administration. He’s currently a managing partner at financial services consultancy Patomak Global Partners. Jonathan McKernan, a board member at the Federal Deposit Insurance Corporation (FDIC), the federal agency that insures consumer........