- The Senate confirmed Rohit Chopra as head of the Consumer Financial Protection Bureau.
- Chopra helped set up the office with Elizabeth Warren and cracked down on the student loan industry.
- He joins other Warren allies in Biden’s ranks fighting over student loan borrowers.
Another ally of Massachusetts Senator Elizabeth Warren – one of Congress’ biggest advocates of student loan borrowers – joined President Joe Biden on Thursday.
Before leaving for the holidays, the Senate confirmed that Rohit Chopra would head the Consumer Financial Protection Bureau (CFPB), the government agency for consumer protection and surveillance. Chopra previously served at CFPB as the first student loans ombudsman, and he was with Warren when she created the agency in 2011 to make sure people across the country are protected financially. Now he is joining CFPB as student loan companies face tighter regulations leading to a restart of payments in February after a hiatus of more than a year. In recent weeks, three providers have announced their shutdowns, leaving 16 million borrowers to transition to new businesses.
After Chopra’s appointment was announced in January, Warren wrote on Twitter that she had worked closely with him “to create the CFPB and fight for American children.”
“It’s great that President-elect Biden has chosen Rohit to lead the @CFPB“Warren wrote.” He has been a fearless champion for consumers at the Federal Trade Commission (FTC) and will be a fearless champion at the helm of the consumer agency. “
—Elizabeth Warren (@SenWarren) January 18, 2021
Chopra left the CFPB in 2015 and was sworn in as a federal trade commissioner in 2018, during which he worked to protect consumers from unfair trade practices. But his work at the agency suggests that the student loan industry will now face much stricter scrutiny.
As the agency’s first student loan watchdog, he mainly focused on uncovering the problems with student loan companies and ensuring that millions of borrowers across the country were not not mistreated. Chopra helped President Barack Obama establish the Student Aid Bill of Rights, which improves the way businesses interact with borrowers, and in 2013 he led the office to find that more than $ 7 million borrowers were in default.
Since then, the CFPB has revealed a number of findings of student loan abuse and, in some cases, has taken legal action against the companies. For example, the agency sued Navient, one of the largest student loan service companies in the United States, in 2017 for “unlawfully defaulting borrowers at every stage of repayment”, including forcing them into debt. more than they could afford.
Now that Chopra is confirmed as head of the agency, he will likely continue to apply for fair student loans. During his confirmation hearing in March, Chopra said he would focus on protecting Americans in debt and he acknowledged the challenges that will arise in February when the student loan payment hiatus is lifted.
“We are at a critical time when so many borrowers are going to have to restart their payments,” Chopra said at the hearing. He added that he will ensure that the restart “takes place legally so that we can avoid an avalanche of defaults when any moratorium may come to an end.”
Three student loan companies have already announced plans to shut down their services at the end of this year, adding further administrative hurdles to the already heavy burden on the Education Department with the resumption of collection of payments for $ 43 million. borrowers.
And Richard Cordray, head of the Federal Student Aid Bureau and another Warren ally, suggested at a conference earlier this month that these closures are happening because these companies don’t want to be held to standards of higher liability under Biden.
Insider reported in July of student loan advocates joining Biden’s ranks, and with Chopra as the head of the government consumer watchdog, further reforms to the student loan industry are likely to occur.