Republican lawmakers in the U.S. House of Representatives Financial Services Committee took aim at Rohit Chopra, the director of the Consumer Financial Protection Bureau (CFPB), in a hearing held on Wednesday that served as the House version of the CFPB’s semi-annual report.
A series of contentious exchanges between lawmakers and Chopra led to the CFPB director being accused of being an “extortionist” and practicing “McCarthyism,” a reference to Sen. Joseph McCarthy’s (R-Wis.) campaign in which he engaged in the persecution of political opponents, giving rise to the second “Red Scare” in the 1950s.
The tone was set at the start of the proceedings, which was called into order by Rep. Andy Barr (R-Ky.) in place of Chairman Rep. Patrick McHenry (R-N.C.).
“First, your agency identifies consumer harm in one instance for a specific product,” Barr said. “From there, you extrapolate that harm occurred everywhere and everyone should be under suspicion. In fact, every act is presumed abusive until the CFPB or a court decides maybe they aren’t. You use compliance bulletins, circulars, and advisory opinions to sow doubt and confusion in the marketplace.”
Barr said Chopra and the CFPB “vilify entire industries simply because they are politically unsavory in your opinion.”
“The practice of ‘name and shame’ first, verify later, isn’t consumer protection, it’s McCarthyism,” Barr said.
The accusations grew more pronounced as the hearing progressed, with Rep. Blaine Luetkemeyer (R-Mo.) saying it was concerning that Chopra does not engage more heavily with the industries the CFPB oversees, and that Chopra and the CFPB engage in “legislation by regulation.”
“Director, you’ve clearly chosen to regulate by press release guidance and threat of enforcement action instead of through rulemaking governed by the Administrative Procedures Act,” Luetkemeyer said.
“This is very concerning to me, because you turn around and you threaten different entities all the time. You’ve become the greatest extortionist in [the] history of this country,” Luetkemeyer later added.
Democratic lawmakers in the minority on the committee aimed to come to the defense of the CFPB and Chopra, asking less pointed questions and offering options for Chopra to address the accusations on the record.
At one point during the hearing, Rep. Juan Vargas (D-Calif.) offered Chopra the chance to respond to Rep. Luetkemeyer’s “extortionist” statement.
“Obviously, it’s offensive,” Chopra said. “But I just want to say that we and our staff try to discharge our public service obligations faithfully and to the best of our ability, as we swear an oath to our Constitution and to our country.”
Other contentious issues addressed by the Republican lawmakers included the CFPB’s recent campaign against what it called “junk fees” charged by banks and other lenders, and the final small business lending rule the CFPB announced at the end of March.
A resolution previously introduced by House lawmakers to block CFPB small business lending rule was also discussed.