The Biden Transition has announced that President-elect Biden has nominated Rohit Chopra to serve as CFPB Director.

Mr. Chopra currently serves as an FTC Commissioner, having been appointed by President Trump in 2018 to fill one of the Democratic seats on the FTC.

The nomination of Mr. Chopra as Director will return him to the CFPB, where he served as an Assistant Director from the time the CFPB was stood up in 2010 until his departure in 2015.  In 2011, he was appointed by the Treasury Secretary to serve as the CFPB’s Private Education Loan Ombudsman.  After leaving the CFPB and before becoming an FTC Commissioner, Mr. Chopra served as a senior fellow at the Consumer Federation of America.

As Ombudsman, Mr. Chopra was highly critical of private student loan servicing practices.  Given the pandemic’s impact on many student loan borrowers and Mr. Chopra’s focus on the treatment of distressed borrowers while serving as Ombudsman, Mr. Chopra can be expected to renew his focus on student loan servicing when he returns to the CFPB as Director.

In addition, statements issued by Mr. Chopra through his tenure as FTC Commissioner signal that he will take a more aggressive approach than Director Kraninger in using the CFPB’s authorities to obtain monetary relief in enforcement actions and will pursue greater cooperation with the FTC in enforcement actions.  Most recently, in connection with the FTC’s November 2020 settlement with Zoom Video Communications, Inc. to resolve allegations that Zoom had engaged in unfair and deceptive acts with regard to its video conferencing services, Mr. Chopra issued a dissenting statement in which he criticized the consent order for failing to provide any remediation for Zoom users or payment of any civil penalties by Zoom.

Also in November 2020, in connection with the FTC’s settlement of its first enforcement action targeting the practice of “debt parking,” Mr. Chopra criticized the FTC’s “go-it-alone debt collection enforcement strategy,” asserting that it “frequently leads to outcomes where victims receive only a miniscule percentage of their losses—or even nothing at all.”  He urged the FTC to cooperate more closely with the CFPB in debt collection enforcement actions, noting that the CFPB’s authority to obtain civil monetary penalties would allow victims to qualify for monetary redress from the CFPB’s Civil Penalty Fund, even if the penalty in a case were only $1.  (There will be a strong incentive for greater cooperation between the CFPB and FTC in enforcement actions should the U.S. Supreme Court rule that the FTC’s authority to seek injunctive relief under Section 13(b) of the FTC Act does not include the authority to seek monetary relief such as restitution.  That issue is currently before the Supreme Court in AMG Capital Management, LLC v. FTC.  Last week, the Supreme Court heard oral argument in the case and even Justices Breyer and Kagan expressed skepticism regarding the FTC’s position that Section 13(b) provides authority for monetary relief.)

President-elect Biden is expected to name someone to serve as Acting CFPB Director pending Mr. Chopra’s confirmation by the Senate.  Under the Federal Vacancies Reform Act (5 U.S.C. 3345(a)), Mr. Biden can appoint a current CFPB employee to serve as Acting Director if “during the 365-day period preceding [Director Kraninger’s expected resignation]” the individual was employed by the CFPB “for not less than 90 days” and was paid at a rate “equal to or greater than the minimum rate of pay payable for a position at GS–15 of the General Schedule.”