Rohit Chopra is laser-focused on helping homeowners who have been hit hard by the COVID-19 pandemic. Student loan debt is in his crosshairs, too. In his confirmation hearing Tuesday before the Senate Banking Committee, Chopra, President Joe Biden’s choice for director of the Consumer Financial Protection Bureau, emphasized that the CFPB has to be ready for housing market fallout due to the pandemic.
“My intuition is we have to be ready for potentially looming problems when it comes to forbearances that might flip to foreclosures,” Chopra said. “I don’t want to see another foreclosure crisis in this country. And we need to do everything we can to make sure the laws are being followed and homeowners can navigate their options.”
According to the most recent numbers reported by the Mortgage Bankers Association, the U.S. housing market currently has about 2.6 million borrowers with mortgages in forbearance plans. In February, the Federal Housing Finance Agency extended forbearance protection for another six months, bringing the total to 18 months. It also extended moratoriums on single-family foreclosures and real estate owned evictions through June 30, 2021.
“In the mortgage market, fair and effective oversight can promote a resilient and competitive financial sector, and address the systemic inequities faced by families of color,” Chopra said in his opening statement. “Perhaps most importantly, administration of consumer protection laws can help families navigate their options to save their homes.”
In answering questions, Chopra said he had an open mind regarding how the CFPB’s Qualified Mortgage rules should be revised. He also said he plans to use consumer complaints and supervision to guide enforcement activity.
Christopher Willis, co-leader of Ballard Spahr‘s Consumer Financial Services Group, noted that “Mr. Chopra’s responses to several questions reinforce our expectation that the CFPB will significantly ramp up its enforcement activity under his leadership.”
Chopra is a CFPB veteran, having previously served as assistant director, where he was the bureau’s top student loan watchdog. The Federal Reserve estimates Americans now owe more than $1.7 trillion in student loans, and student loans have been an obstacle for first-time homebuyers in the housing market.
“It’s one of the biggest consumer credit markets in our country after mortgages and we have to make sure that the law is being followed,” he said.
In 2011, the Secretary of the Treasury appointed Chopra to serve as the CFPB’s student loan ombudsman, a new position established in the financial reform law. As one of Sen. Elizabeth Warren’s (D-Mass.) first hires as she constructed the CFPB, Chopra was on the ground floor as the bureau was built.
“Commissioner Chopra has long fought for financial markets that are fair for consumers, including student loan borrowers,” said Ashley Harrington, Center for Responsible Lending federal agency director and senior council.