Nichols op-ed: CFPB is ‘regulator going rogue’

Shortly before CFPB Director Rohit Chopra began the first of two days of oversight hearings on Capitol Hill, ABA President and CEO Rob Nichols challenged Chopra’s controversial practices and “power grab” in a hard-hitting American Banker op-ed.

Nichols specifically tackled the bureau’s national media campaign to brand “almost any fee associated with banking—even those closely regulated by the CFPB—as ‘junk fees.’” He challenged the misleading way Chopra lumps resort fees and ticket fees—over which the bureau has no jurisdiction—in with bank fees, and he noted that the federal government itself charges a wide variety of costly fees for service and penalties for late payment.

Also addressed in the op-ed: the bureau’s stealthy update of its exam manual to expand the use of disparate impact analysis to a wide range of products for which this form of analysis is not authorized by statute—and that Chopra unilaterally revised the bureau’s enforcement process to move more decision-making into the director’s office, possibly depriving participants of due process in enforcement proceedings based on this more expansive exam manual.

“I have had the honor of representing banks of all sizes before four CFPB directors. While we have often disagreed on policy, sometimes significantly so, I found that prior Bureau leaders worked to understand markets in an open manner and sought feedback from all stakeholders,” Nichols wrote. “That is no longer happening at the CFPB, and I suspect many Americans will be troubled to learn that an unelected federal regulator is making major policy changes without public input, even if he claims to be doing so in consumers’ best interest.”