HFSC GOP Sets Table for Rocky CFPB Relationship
Despite early warm goodbyes to outgoing Chairwoman Waters (D-CA), GOP members wasted no time trading blows at a fiery HFSC session today with CFPB Director Chopra. As anticipated, incoming Chair McHenry (R-NC) and committee Republicans focused their efforts on what they call “regulation by guidance,” accusing the Director of trying to influence the behavior of firms through nonbinding releases and avoiding the public rulemaking process. In his testimony and answers to members, Director Chopra said that the Bureau is watching voluntary industry action on Zelle fraud before taking action and is more broadly focused on payment-system standards that ensure neutrality and strict data-privacy. Republican members also highlighted how the Bureau’s proposed small-business reports (see FSM Report SMBUS27) put undue regulatory burden on small banks. Additionally, Rep. Loudermilk (R-GA) inquired about the appropriateness of making banks liable for P2P fraud. Democrats refrained from questioning the Bureau’s actions, instead asking about its bigtech inquiry, the resurgence of ARMs, and blackbox algorithms. Reps. Cleaver (D-OH) and Vargas (D-CA) also continued their attacks on crypto from yesterday’s hearing, calling it dangerous and useless.