    [Senate Hearing 118-631]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 118-631

                     CONSUMER PROTECTION: PROTECTING WORKERS'
                   MONEY AND FIGHTING FOR THE DIGNITY OF WORK

    =======================================================================

                                    HEARING

                                   before the

                                  COMMITTEE ON
                       BANKING,HOUSING,AND URBAN AFFAIRS
                              UNITED STATES SENATE

                        ONE HUNDRED EIGHTEENTH CONGRESS

                                 SECOND SESSION

                                       ON

         PROTECTING WORKERS' MONEY AND FIGHTING FOR THE DIGNITY OF WORK

                                   __________

                               DECEMBER 11, 2024

                                   __________

      Printed for the use of the Committee on Banking, Housing, and Urban
                                    Affairs

                     [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                    Available at: https: //www.govinfo.gov /

                                   ______

                     U.S. GOVERNMENT PUBLISHING OFFICE

    60-185 PDF                WASHINGTON : 2026

                COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

                           SHERROD BROWN, Ohio, Chair

    JACK REED, Rhode Island              TIM SCOTT, South Carolina
    JON TESTER, Montana                  MIKE CRAPO, Idaho
    MARK R. WARNER, Virginia             MIKE ROUNDS, South Dakota
    ELIZABETH WARREN, Massachusetts      THOM TILLIS, North Carolina
    CHRIS VAN HOLLEN, Maryland           JOHN KENNEDY, Louisiana
    CATHERINE CORTEZ MASTO, Nevada       BILL HAGERTY, Tennessee
    TINA SMITH, Minnesota                CYNTHIA M. LUMMIS, Wyoming
    RAPHAEL G. WARNOCK, Georgia          J.D. VANCE, Ohio
    JOHN FETTERMAN, Pennsylvania         KATIE BOYD BRITT, Alabama
    ADAM B. SCHIFF, California           KEVIN CRAMER, North Dakota
    ANDY KIM, New Jersey                 STEVE DAINES, Montana

                         Laura Swanson, Staff Director

                   Lila Nieves-Lee, Republican Staff Director

                           Elisha Tuku, Chief Counsel

                      Amber Beck, Republican Chief Counsel

                          Cameron Ricker, Chief Clerk

                          Shelvin Simmons, IT Director

                           Pat Lally, Assistant Clerk

                        Sheryl L. Arrington, GPO Detail

                          Jason T. Parker, GPO Detail

                                      (ii)

                                C O N T E N T S

                                  ----------

                          WEDNESDAY, DECEMBER 11, 2024

                                                                       Page

    Opening statement of Chair Brown.................................     1
            Prepared statement.......................................    34

    Opening statements, comments, or prepared statements of:
        Senator Scott................................................     4
            Prepared statement.......................................    35

                                    WITNESS

    Rohit Chopra, Director, Consumer Financial Protection Bureau.....     6
        Prepared statement...........................................    37
        Responses to written questions of:
            Senator Scott............................................    39

                  Additional Material Supplied for the Record

    Semi-Annual Report of the Consumer Financial Protection Bureau--
      Spring 2024....................................................    44
    Letters and statements submitted regarding the CFPB..............   131

                                     (iii)

                     CONSUMER PROTECTION: PROTECTING WORKERS'
                   MONEY AND FIGHTING FOR THE DIGNITY OF WORK

                                  ----------

                          WEDNESDAY, DECEMBER 11, 2024

                                           U.S. Senate,
              Committee on Banking, Housing, and Urban Affairs,
                                                        Washington, DC.
        The Committee met at 9:45 a.m., via Webex and in room 538,
    Dirksen Senate Office Building, Hon. Sherrod Brown, Chair of
    the Committee, presiding.

                OPENING STATEMENT OF CHAIR SHERROD BROWN

        Chair Brown. The Committee on Banking, Housing, and Urban
    Affairs will come to order.
        We'll be marking up later today. Attendance is always a
    problem when there is no bipartisan cooperation on these
    nominees. So we have delayed it until doing it off the floor
    today during the afternoon votes.
        I want to welcome our two new Members. Senator Schiff from
    California is joining this Committee. Adam, welcome, and your
    reputation precedes you of great public service. Senator Kim
    does not seem to be sitting there, but his does too. And I
    welcome both of them to the Committee.
        When I joined this Committee in 2007, my first month in the
    Senate, it had a reputation of a bit of a sleepy Committee.
    Much of Washington seemed to have reached a consensus that Wall
    Street ought to be left largely to its own devices, that big
    banks knew best. This Committee was really referred to as the
    Wall Street Committee, suggesting almost ownership. We know how
    that turned out.
        Less than 2 years later, the economy was in freefall. Banks
    were collapsing at the end of the Bush administration. Layoff
    notices, foreclosure warnings were landing in inboxes and
    mailboxes, ruining lives around the country.
        In the wake of the crisis, we passed Dodd-Frank, the Wall
    Street Reform and Consumer Protection Act. It was the first
    time in 75 years that we've reined in Wall Street in its
    reckless obsession with profits at the expense of everyone and
    everything else.
        That law worked. Nearly 15 years later, our banking system
    is safer. Banks hold more capital and are better prepared to
    handle a crisis.
        Of course, we know Wall Street. Its lobbyists don't give up
    easy. After we passed Dodd-Frank, one prominent industry
    lobbyist said, now it's halftime, and they never give up.
        Wall Street was true to its word. They immediately went to
    work trying to roll back and dilute as many of the protections
    we put in place as possible. When I took over as Chair of this
    Committee 4 years ago, Washington still called it the Senate
    Banking Committee or the Wall Street Committee until then,
    still pretty much a Committee dedicated to protecting Wall
    Street and the financial industry and fulfilling their lobbyist
    wish list and particularly tearing down safeguards that protect
    Americans' money and that protect taxpayers from ever having to
    bail out Wall Street again.
        We changed that. We put the focus on the Committee back
    where it should be, the people who make this country work. The
    stock market doesn't drive the economy, workers do. And on the
    Senate Banking, Housing, and Urban Affairs Committee, we made
    it our mission to serve them.
        That's why we improve public transit around the country for
    the millions of workers who depend on the bus or the train to
    go to work. Cleveland is finally replacing railcars that date
    back to the Reagan administration. Akron Metro got a new
    maintenance facility. Ohioans in Bryan, Ohio, will have a new
    Amtrak station.
        That's why we came together bipartisanly to crack down on
    traffickers of deadly fentanyl which devastates working
    families and their communities in Ohio and across the country.
    Our law goes after the entire fentanyl supply chain to the
    chemical suppliers in China to the cartels that traffic the
    drug from Mexico.
        It's why we confirm dedicated talented public servants who
    can reflect the vibrant diversity of our country and who serve
    the public. The public, not the financial industry.
        That's why we stood up to corporate special interests,
    whether it's big banks or payday lenders or shady debt
    collectors.
        We had the first ever legislative win against the payday
    lending lobby, protecting people from exorbitant interest rates
    that trap Americans far too often in a cycle of debt. We
    successfully pushed to remove medical debt from people's credit
    reports, saving them money and protecting them from higher
    interest rates. Again and again, we stopped corporate interests
    to try to prevent the CFPB, Director Chopra's bureau, from
    protecting the public.
        We began calling the CEOs of the country's largest Wall
    Street banks to testify before this Committee and before the
    American people. Never been done. And we brought the leaders of
    the biggest financial institution. They hold tremendous power
    over our economy and over people's lives. Too often that power
    isn't used wisely.
        As important, as effective as Wall Street reform was,
    surely it was incomplete. We still have an economy where hard
    work doesn't pay off like it should. For decades, Wall Street
    has rewarded the companies that squeeze their workers the
    hardest. When companies raise prices, when they lay people off,
    when they move jobs overseas, when they bust unions, when they
    subcontract work to lower-paying companies with fewer benefits,
    Wall Street analysts, pretty much one chorus, yell, buy, buy,
    buy.
        And look at the result: for almost half a century,
    productivity has gone up. The stock market has gone up.
    Executive compensation has exploded. Profits are up. But
    workers' wages have been largely flat. It's not always been
    like that.
        When I was growing up, CEO-to-worker pay was about 20 to 1.
    That was still good money for management, as it should have
    been. That ratio, not 20 to 1, not 100 to 1, not 200 to 1, that
    ratio today, 344 to 1, CEOs to pay--average pay.
        When the economy fundamentally doesn't reward work while
    Wall Street continues to rake in profits, not just instead of
    workers but at the expense of workers, our work is far from
    over. Some of the most crucial work happening today to hold
    corporate special interests accountable and level the playing
    field for the rest of America is with the Consumer Financial
    Protection Bureau.
        The consumer bureau has been among the most successful
    parts of Wall Street reform. Since 2011, CFPB has returned $21
    billion to 205 million Americans. These are real checks that
    land in people's mailboxes. Dollars that might mean a little
    extra breathing room to buy groceries or fill up a tank of gas.
        The CFPB has returned more than $363 million to service men
    and women and to veterans. That's money that companies took
    straight from the pockets of people who serve us. And over the
    next 4 years, the CFPB will be more crucial than ever.
        Last time President Trump was in office, his cabinet looked
    like a Goldman Sachs retreat. He tried to put the CFPB to work
    for corporations instead of the public. And from what we've
    seen from his nominees, corporate special interests won't just
    have a seat at the table this time around, they'll be given
    free rein and encouraged to rip off workers and consumers. He's
    opening up our Government to the highest corporate bidders,
    embodied in billionaire after billionaire after billionaire
    he's nominated.
        It'll be up to you in this room to preserve the CFPB as one
    place where Americans can go that fight for them. Most people
    don't have fancy lawyers. They don't have high priced
    lobbyists. The CFPB is their advocate and their voice. The
    public servants there fight for the people who make this
    country work and so must all of us.
        This Committee must ready itself for the fights and
    challenges ahead, rising housing costs, private equity
    infiltrating more and more of our economy, insurance costs
    going up, risk building up in the private credit market, new
    technology that's increasingly being used in our financial
    system.
        All these risks have one thing in common: they have the
    potential to take money--even more money away from working
    Americans and funnel it to the same corporate elite that
    creates more and more and more and more billionaires in this
    country. Those guys have enough advocates in this town. Our
    charge, whether in the Senate or out of it, is to look out for
    workers and put them at the center of everything.
        I'm proud of the work we've done together on this
    Committee.
        I want to thank Senator Scott and Senator Crapo, who was my
    partner, and Senator Toomey, my partner in the past, and all
    the Members of this Committee on both sides.
        I want to thank especially my talented Committee staff,
    Homer and Beth and Phil and Megan, Elisha and Laura have been
    with me the entire 10 years I've been Chair or Ranking Member.
    Sarah, Jeremy, and Katie in my personal office have also worked
    diligently for this Committee over the last decade.
        And Jeff and Ann and Sunny and John, Mohammad and Shannon
    and Emily and Ben and Min and Erika and Jonathan, Shanna, Will,
    Serena, and Sean have made significant contributions during
    their time on this staff. I want to thank the nondesignated
    staff, Pat, Lena, and Shelvin and Jason and Sheryl, led by
    Cameron Ricker, for making this Committee run so smoothly.
        I trust Senator Warren to carry on our mission of standing
    up for working Americans, standing up to corporate interests
    that hold far too much influence in this town. And they're
    about to hold a lot more.
        That work continues.
        Senator Scott.

                 OPENING STATEMENT OF SENATOR TIM SCOTT

        Senator Scott. Thank you, Mr. Chairman.
        Thank you for your service on this Committee since 2007 and
    the last several years as the Chair of the Committee. I'll say
    the cancellation to today's markup really is disappointing and
    frankly sours the tone. It's another example of the dysfunction
    and the lack of transparency that is a last gasp of a lame-duck
    Administration.
        But now we turn our attention to Director of the CFPB who
    also doesn't seem to accept the results of the November
    election.
        As I mentioned earlier, after the November election, a
    historic win for Republicans and President Trump, which
    delivered a mandate for this Committee and for this Congress. I
    sent a letter to each and every Federal agency under the
    Committee's jurisdiction calling on them to cease all
    rulemaking.
        It is paramount that President Trump can begin his
    Administration on January 20th with a fresh slate to implement
    the economic agenda that the American people resoundingly voted
    for.
        And this is not unreasonable. Last month, the prudential
    regulators, the OCC, the FDIC, the NCAU, and the Federal
    Reserve agreed with me and committed to pausing rulemaking
    before the inauguration.
        Yet, as we've seen time and time again with Director
    Chopra, he has ignored these calls and pressed forward with a
    unilateral partisan agenda.
        Many of you have heard my Republican colleagues and I argue
    that the changes at the CFPB are absolutely necessary, that the
    agency is unaccountable to Congress.
        And Director Chopra seems intent on proving this to be
    true.
        Despite voters' clear message on Election Day, Director
    Chopra has advanced his agenda at a breakneck speed.
        He has issued a final rule expanding the CFPB's own
    jurisdiction, issued a proposal seeking to upend the fraud
    prevention industry, has published multiple studies and reports
    to further his political agenda, and just this week published
    another rulemaking effort.
        The Director has spent years at the CFPB pushing the Biden-
    Harris administration's partisan messaging on junk fees and
    seeking a boogieman around every corner for the failed economy
    policies of the Biden administration.
        Let me be clear: protecting consumers and building an
    economy that serves all Americans are principles that guide my
    work in the Senate. But we can do both without weaponizing our
    Federal regulators.
        Speaking of regulators abusing their authority, the
    longstanding issue of debanking and Operation Chokepoint have
    recently resurfaced.
        I have focused on this issue for years and the patent
    inequality it represents for our legal businesses.
        I've consistently called out our banking agencies for
    weaponizing their power and private institutions for bending to
    the powerful here in Washington.
        No legal business should ever be debanked.
        This message is something that Director Chopra has latched
    on to since the election, including direct reference to
    debanking in his last two rulemakings.
        But make no mistake. The Director is not our ally in this
    fight, and the career bureaucrats of the CFPB are not either.
        The Director's recent actions are little more than an
    attempt to expand the CFPB's jurisdiction and grant the agency
    more authority to pick winners and losers in the financial
    services system.
        Unelected bureaucrats in Washington, DC, should not be
    deciding which businesses survive or fail based on their
    political agendas. All legal businesses should have the
    opportunity to success in America just like every single
    American.
        Washington should be focused on promoting the two greatest
    tools which can arm all Americans, choice and opportunity.
        These were the tools that allowed me as a poor kid in South
    Carolina to grow up and own my own business and now lead the
    Republican side of the Senate Banking Committee.
        America must continue to be the bedrock of opportunity, and
    our regulators must work to ensure this every single day.
    Regulations should provide guardrails, not roadblocks.
        I look forward to working with the next Director of the
    CFPB to increase accountability at the Bureau.
        Director Chopra, I look forward to hearing that you will be
    resigning effective January 20th.
        It is unacceptable to have an agency with a budget of
    almost a billion dollars outside of the appropriations process.
    And we must find a way to address this issue.
        I will end with this, a message of hope. I am hopeful that
    the next Congress will allow this Committee to return to
    regular order and pass legislation to increase opportunity for
    American families and small businesses across our country.
        Chair Brown. Thank you, Senator Scott. There are no
    election deniers in my party. We accept election results even
    though President Trump got less than 50 percent of the vote.
    Hardly a mandate. And as I leave office in 3 weeks, I just hope
    both parties will stand up to the special interests who too
    often run this city.
        Honorable Rohit Chopra has served as Director of CFPB since
    October 2021. He worked at the CFPB in its early days serving
    as Assistant Director and student loan ombudsman shortly after
    the agency opened its doors. He's also been an FTC
    Commissioner.
        Director Chopra, welcome.

        STATEMENT OF ROHIT CHOPRA, DIRECTOR, CONSUMER FINANCIAL
                           PROTECTION BUREAU

        Mr. Chopra. Thank you, Chairman Brown, Ranking Member
    Scott, and Members of the Committee. Thank you for inviting me
    to this hearing regarding the CFPB Semiannual Report to
    Congress.
        This is my 27th time testifying before Congress as an
    Executive branch official and my 10th time before the Senate
    Banking Committee. And off camera, in my meetings with each of
    you on both sides of the aisle, I continue to find more and
    more areas of agreement on how we need to tackle concerns
    Americans are facing. Let me touch on a few of these.
        First is credit card debt. Americans owe roughly $1.2
    trillion in credit card debt and in 2022 alone paid $130
    billion in interest and fees. The CFPB's research has revealed
    that the credit card market is quite concentrated with a few
    big players dominating the market. These large behemoths have
    been able to push up interest rate margins considerably, even
    when adjusting for broader market interest rate changes. And
    this increase in margin and lack of competition means that
    Americans are paying an extra $25 billion a year compared to 10
    years ago. Many borrowers are paying over 30 percent, squeezing
    their monthly budgets, and small credit unions and community
    banks offering lower rates find it tougher to compete against
    the big guys. Further consolidation amongst the biggest
    players, including one pending mega merger, threatens to jack
    up rates even further.
        The CFPB is taking action to crack down on credit card
    companies exploiting regulatory loopholes, to make it easier to
    switch to a new card to ensure consumers can obtain and
    actually redeem their promised rewards, and more.
        But many in Congress are rightfully concerned that the
    market will not correct on its own. And there is growing
    bipartisan support for taking action. And in particular, there
    are proposals to limit annual percentage rates on credit cards
    on both sides of the aisle. And the incoming Administration has
    expressed support for an interest rate cap. It will be
    important for this Committee to ensure that credit cards are a
    source of credit priced at competitive rates rather than what
    we see in today's market.
        Second is digital surveillance and data privacy at home, at
    work, and everywhere Americans go. We are exposed every day to
    stalkers, scammers, and spies due to unchecked digital
    surveillance across the economy. There is growing bipartisan
    consensus that we need to do something about all of this
    intrusive surveillance, and it's critical that this work moves
    forward.
        The CFPB recently proposed a rule on data brokers that
    would curb access to sensitive financial data by foreign
    adversaries and others seeking to exploit Americans by spying
    on their personal information.
        Third, account closures and debanking, America's banking
    and payment system serves as essential infrastructure for our
    economy and society and an account for a family with a bank,
    credit union, or digital wallet provider is a necessity. But
    unfortunately, we have seen too many account closures on
    questionable grounds.
        Over the last few years, the CFPB has been working to make
    sure that banks and big tech firms are not inappropriately
    denying households with access to banking and payments. We're
    especially concerned when funds are frozen or when accounts are
    closed for reasons not contemplated by Federal law. We are
    currently engaged in litigation against big Wall Street special
    interests to defend the agency's authority to investigate when
    companies unfairly debank customers based on characteristics
    like religious affiliation.
        In addition, we finalized the rule to more closely examine
    digital payment apps to ensure they're following the law. The
    CFPB has also proposed a rule that would help to reduce account
    closures driven by overdraft churning. And we've proposed rules
    to update Fair Credit Reporting Act regulations to make sure
    that identity verification algorithms are not leading to
    improper account closures. We're scrutinizing reputation-based
    algorithms and artificial intelligence so they are not
    weaponized in ways that block people from banking. We will
    continue to defend consumers' rights and to hold companies
    accountable, and it will be critical for Congress to support
    that work.
        Thank you so much, and I look forward to your questions.
        Senator Scott. Thank you, Director.
        We'll begin the questioning with Senator Smith of
    Minnesota.
        Senator Smith. Thank you, Mr. Chair, and thank you, Ranking
    Member Scott.
        Mr. Chair, I just want to take a moment to thank you for
    your leadership on this Committee. You have never lost focus on
    the importance of this Committee on issues that often haven't
    gotten a lot of attention.
        And particularly, I want to mention the importance of
    housing as part of the mandate of this Committee. You have
    brought that back. I believe that focusing on housing,
    addressing housing supply issues, housing affordability is so
    important to the future of this country. It also, I believe, is
    a nonpartisan issue. Certainly, it is in my home State of
    Minnesota.
        And I believe incoming Chair Scott that, as we move into
    2025, there should be many opportunities for us to work
    together on issues of housing. I know that I'm really proud of
    the bipartisan work that I've been able to do with Senator
    Rounds and Senator Lummis. And I have high hopes that we can
    find ways cooperating with one another as we look at continuing
    that, what I consider to be the legacy of Senator Brown.
        Director Chopra, I am just really glad to have you here.
    And as you know, I have used my time on this Committee really
    focused on how to help regular Americans afford their rent and
    afford to buy a home. And I, again, as I've just said, don't
    see this as a partisan issue. It certainly isn't in Minnesota.
    So I want to thank you and the CFPB for your responsiveness to
    my concerns around predatory land contracts or contracts for
    deed.
        Colleagues, this is happening all over the country. It's
    happening in my home State when unscrupulous home sellers pitch
    these complex contracts to people who just want to realize the
    dream of home ownership. And too often these contracts are just
    frankly designed to fail.
        Director Chopra, you heard about this when you visited
    Minnesota this summer. You heard about the consequences to
    people, families who think that they are on the path to owning
    their own home when, in fact, they are on a path to financial
    disaster. Where one missed payment can mean forfeiting all the
    money that they put into buying a home as well as the place--
    losing the place they thought was their home.
        And we know that these unscrupulous sellers have exploited
    people based on their religious beliefs. In Minnesota, they've
    marketed land contracts as an interest-free alternative to a
    traditional mortgage. And that has clearly exploited the many
    Somali Muslim immigrants in my home State who are limited from
    paying interest under the tenets of their faith.
        So Director Chopra, I'm hoping that you can talk to me and
    the rest of the Committee about the actions that the CFPB has
    taken to stop these abusive practices and what recourse you're
    seeing for homeowners if they find themselves trapped in one of
    these predatory contracts.
        Mr. Chopra. Well, let me say that home ownership is
    supposed to be a part of the American dream, not something that
    is supposed to turn into a nightmare. And for many of these
    predatory land contracts and other types of bizarre
    arrangements, they are setting people up to fail. In other
    words, they are getting people to put down big sums of money
    only to put them in an arrangement where they can claw all of
    that for themselves, destroying that person's financial life,
    their family's future, and their neighborhood and community.
        We're doing our best to make sure that we can use the
    existing law to combat all of these predatory practices. But
    it's not just these land contracts. We're seeing all sorts of
    set up to fail loans when it comes to housing.
        And people are sick and tired of the high costs of housing
    and being treated the way they're treated. And we really
    appreciate you for helping us see and learn more about this.
    And it will continue to be a focus.
        Senator Smith. Well, I appreciate that. And I hope that it
    will continue to be a focus at the CFPB as we move forward.
    This is an example of how regular people need somebody in their
    corner when they are going up against some really powerful
    institutions that do not have their best interest at heart. So
    I appreciate that.
        I want to just--I just have a couple of minutes--couple of
    seconds left. I want to just highlight a little bit about what
    I think the CFPB has done for consumers in this country over
    the last several years. In your relatively short existence, you
    have recouped more than $21 million to the benefit of over----
        Mr. Chopra. Billion.
        Senator Smith. Billion, sorry. I misspoke, $21 billion to
    the benefit of over 205 million consumer accounts. Just last
    week, you returned 1.8 billion to consumers that have been
    scammed by credit repair companies. And that's 50,000
    Minnesotans. So these are folks that see an ad on television
    saying that they can clean up their credit score, and then they
    end up dialing that 800 number.
        And before you know it, they're actually worse off than
    they were before they pursued that. So I want to just thank the
    CFPB for your work for Minnesotans. Colleagues, that has been--
    each Minnesotan has got back, I understand, over $400 each on
    average thanks to the good work of the CFPB.
        So there's not a question in there. I'm out of time. But I
    wanted to just highlight that success. And thank you very much
    for your work.
        Chair Brown. Thanks, Senator Smith. Senator Scott.
        Senator Scott. Thank you, sir. Director Chopra, do you have
    any plans to resign from the CFPB on January 20th?
        Mr. Chopra. Well, as you know, we serve and are confirmed
    for a 5-year term. The President can remove us at any time, any
    day. And we obviously completely respect that right.
        Senator Scott. In November, the American people voted for a
    new direction for our country and our economy. The election was
    a clear mandate rejecting the policies of the Biden
    administration and calling for a new approach under President
    Trump.
        And one of the reasons why I think that is true is if you
    look at your opening statement, there's $1.3 trillion of credit
    cards around the country. Eighty-three million households have
    lost on average a little bit over $1,075 of spending power
    under the Biden economy. It's $83 billion of spending power
    lost every month by an average American family leading to the
    largest credit card balance in history of our Nation.
        That is why when I sent a letter on November the 17th
    demanding that the CFPB cease all rulemaking activity, the
    prudential regulators agreed. But you have pressed forward with
    a final rule and two new proposals since receiving that letter.
    Can you explain why you're ignoring both my request and the
    clear mandate of the American people?
        Mr. Chopra. Well, I don't think it makes sense for the CFPB
    to be a dead fish. People between Election Day and
    inauguration, they are still getting scammed. They're still
    being subjected to questionable account closures.
        They're still being the victims of so much wrongdoing. Some
    of the things that we have proposed recently, including this
    week initiating a rulemaking process to help survivors of
    domestic violence and elder abuse is an area where we received
    bipartisan letters from Congress even urging us to take action.
    That process will play through, and I hope you can see that
    consumer protection is really not something that should be
    something we fight about but something that we guard against
    together to make sure that people can have a fair marketplace.
        Senator Scott. I believe that we should do everything in
    our power to protect the consumers. I think there are a number
    of agencies at the OCC and others who already have the mandate
    authority to do so. I certainly look forward to having an
    opportunity to look at the overall structure of the CFPB and to
    see how we can make sure that the mission--the primary mission,
    not the expanding authority, will be fulfilled.
        You recently issued a final rule to expand the CFPB's
    authority to new industry participants. You also repeatedly
    attempted to change policy through your seat on the FDIC board.
    As much as you claim to be doing all of this in support of your
    mission to protect consumers, it seems to be failing.
        I've spoken many times about the harmful effects of many of
    the CFPB's proposals. But recently, we have confirmed that the
    CFPB is not even doing the basic jobs it was created to do as
    part of Dodd-Frank which created CFPB. When a bank transitions
    in assets above a certain threshold, the CFPB legally becomes
    responsible for direct supervision of compliance with consumer
    financial activities.
        But a report issued just last week about the CFPB's own
    inspector general reveals that the agency did not complete most
    of those transitions timely or effectively. So the specific
    objectives under the current construct of law focused the
    attention of the CFPB. And within that jurisdiction, there
    seems to be a breakdown.
        A very basic question arises from this report. How can the
    CFPB continue to claim that it needs more jurisdiction if it's
    failing to do its current job?
        Mr. Chopra. Well, that report was initiated by me. I was
    concerned about how those transitions occurred. Let me share
    with you that we've shifted our supervision away from many of
    the banks and toward the biggest nonbanks who touch almost
    every wallet in our country.
        The rule that we put in place does not expand our
    jurisdiction. We already have enforcement powers. But when it
    comes to some of these big tech companies and giants who have
    more power over our digital wallets, we want to make sure that
    they're following the same laws that apply to small banks and
    level the playing field.
        That is exactly what Congress wanted. And if you're
    suggesting that we should put more of our resources against
    smaller banks, I would just forcefully disagree with that.
        Senator Scott. Obviously, you did mishear what I said. I'm
    certainly not making that kind of a statement or suggestion.
    But it is without question that the CFPB's authority continues
    to expand under your jurisdiction. I believe it has led to----
        Mr. Chopra. We are not allowed to expand our authority.
    Only Congress is able to do that.
        Senator Scott. I wish that was true. We know that's true,
    but it does not appear that you can follow those rules. Thank
    you for being here.
        Chair Brown. Director, every time, as you know, workers and
    consumers are forgotten in financial regulation, hardworking
    Americans are the ones who pay the price every single time. We
    saw during the Great Recession where so many Americans lost
    their homes and their jobs and their savings. Has Wall Street
    learned its lesson?
        Mr. Chopra. In some ways, no, and that's the point. We know
    that they're always going to be driven by pumping up profits
    and their own bonuses. And that's why we have to make sure that
    there's some basic rules that protect the entire economy from
    some of those excesses. It's pretty basic to me.
        Chair Brown. Thank you. Let me ask it a different way, a
    similar question. If you were replaced by someone that, in your
    mind and my mind, doesn't have the guts to stand up to the big
    companies, the big banks that re fleecing the public that end
    up resulting in what happened 15 years ago, what happens? I
    mean, should we trust Wall Street in that situation when
    Director Chopra is not there?
        Mr. Chopra. One of the things that I'm really glad the law
    puts in place is a ban on officials like me from going to sell
    ourselves to the companies we regulate. We should not have
    anyone leading regulatory agencies who's there to kiss up to
    those they're supposed to oversee. We need to make sure that
    they are enforcing the law and not looking the other way as
    people across the country are cheated.
        Chair Brown. Well, that revolving door is far to common in
    this country as you know, and this Government and this city
    with Members of Congress and with staff, Committee staff,
    personal staff, agencies like yours. Let me shift to medical
    debt for a minute.
        We've had the credit--we did a couple things--several
    things, but two notably that I'm particularly proud of. We've
    started a tradition here where we bring the bank CEOs, six,
    seven, eight of the largest--CEOs of the largest banks
    regularly here to answer--to hold them accountable.
        We also have done that with credit rating companies as you
    know. Understanding and focused on medical debt. Medical debt
    can happen to anyone. It doesn't matter if you do everything
    right. Anyone can get sick. Anyone can get in a car accident.
    It has nothing to do with your credit worthiness or at least it
    shouldn't.
        People should not have to deal with damaged credit scores
    and harassment from debt collectors on top of massive medical
    bills and navigating a far too complicated health care system.
    So Director, are medical bills generally accurate?
        Mr. Chopra. We have found systemic problems with the
    accuracy of medical bills, particularly ones that are reported
    on credit reports. There's problems with coding. There is a
    ping-ponging going on between the insurance company and the
    provider. Sometimes multiple co-pays or deductibles are being
    charged. And it is why those items tend to not be predictive of
    your performance on loans like credit cards and mortgages.
        Chair Brown. So assuming that and you've proven that's the
    case, what impact do inaccurate medical bills have on consumer
    credit scores?
        Mr. Chopra. Well, we've seen scores go down artificially,
    pushing up the price to borrow for a home. And in some cases,
    blocking a person from maybe even getting an apartment or a
    job.
        Chair Brown. And one of the reasons I hear--my colleagues
    and I see Wall Street fighting hard against your agency and
    you're fighting for consumers, not corporate America, is a
    result--it has a lot to do with medical debt. So talk to us in
    the last minute or so about the rule which would erase medical
    debt burden for millions of Americans in terms of credit
    scores.
        Mr. Chopra. Well, we proposed a rule that would block the
    reporting of certain medical bills on credit reports to better
    protect health privacy. Our proposed rule also blocks creditors
    from securing loans with wheelchairs, prosthetic limbs, and
    other medical devices. We think that a lot of the rule has
    already been implemented voluntarily. The three big credit
    reporting conglomerates have already eliminated much of it and
    States across the country have also banned it as well.
        Chair Brown. So why the opposition from my Republican
    colleagues to this rule and from some of corporate America? Why
    do they think it's a bad idea?
        Mr. Chopra. I don't want to paint with a broad brush, and
    many behind closed doors really support it. But I think that
    there is too many debt collectors who weaponize this data in
    order to coerce people into paying. I do not know, and we have
    looked at every single concern.
        We want to protect our rural hospitals. We want to protect
    access to health care and credit. But we think this is a very
    wise path forward as we continue to look to finalize it.
        Chair Brown. Thank you. Senator Rounds, before I recognize
    you, thank you for your work with Senator Smith on housing. I
    wish we could've convinced some others in the Committee to move
    forward with a number of pieces of legislation that you did
    with people on our side that would've expanded the housing
    supply in rural America and elsewhere. So thank you, Senator
    Rounds.
        Senator Rounds. Thank you, Mr. Chairman. And I understand
    that this is probably the last time that we're going to be
    together on the dais. And I will just say that I have enjoyed
    the banter, and I have enjoyed our opportunity to visit with
    one another.
        And although we probably disagree on a number of different
    areas, we've also found some areas of agreement with regard--
    along with Senator Smith with regard to improving options for
    home ownership and particularly with regards to areas on Native
    American reservations and also with regard to rural areas of
    our country that really do need to have an upgrade in how we
    provide mortgage services to them.
        Chair Brown. Thank you, Senator Rounds. Thank you.
        Senator Rounds. So I appreciate that. Thank you. And Mr.
    Chopra, I would suspect that you and I probably disagree on the
    vast majority of our philosophical approaches to the regulatory
    approach that we should have in this country regarding the
    availability of credit and so forth.
        But also, I wish you the best in your next endeavor. And I
    think there's no question, but you and I both know that you
    probably won't be here after the 20th of--or the 21st of
    January. But I wish you well in your next endeavor.
        Let me begin by just working my way through some things
    that I really do have a concern about. I recently sent you a
    letter with my colleagues, Senators Hagerty and Daines,
    regarding your proposed mortgage servicing rules. The stated
    intent of the proposed changes is to assist borrowers who are
    experiencing difficulty in meeting their financial obligations.
        Unfortunately, the proposal will actually, I believe, make
    this process more cumbersome and confusing by offering a
    variety of options at different times during the loss
    mitigation review cycle. Confusion causes delay. It also causes
    mistakes and inefficiency.
        The intent of this rule is meant to be good. But as
    proposed, I believe it will be ineffective. And I think it will
    actually be harmful. Regarding this proposal, did the CFPB's
    actions in this area, did they stem primarily from consumer
    complaints? Or is this an initiative driven by internal agency
    priorities?
        Mr. Chopra. No, this was actually based on discussions with
    the mortgage industry. We did a look back during the COVID-19
    pandemic at various different ways to create flexibilities in
    the loan modification process and maybe reduce some of the
    procedural hurdles to give servicers the ability to modify
    loans, lower costs to do so, but at the same time, preserve
    consumer protections.
        So what we have proposed is really inspired by the
    learnings from the industry and others about COVID-19 loan
    mods. I agree with you that you--and I will share with you that
    your letter with Senator Hagerty and others highlighted some
    important issues. It is a very complex way that our mortgage
    servicing ecosystem----
        Senator Rounds. Well, here's my concern.
        Mr. Chopra. ----and we do need to find ways to streamline
    it.
        Senator Rounds. Look, here's where I'm getting at is I
    really think that when you do this type of a critical
    rulemaking, I'm really questioning whether or not you had the
    opportunity or you took the opportunity to really engage with a
    lot of the stakeholders on this rulemaking. And I'm concerned
    that a number of them who have been in contact with our offices
    really don't believe that they were adequately listened to, for
    lack of a better term, with regard to what the impacts will be.
        So I bring it up only because I think this is going to be
    critical in the next couple of weeks as we look at
    congressional resolutions of disapproval and so forth. And this
    is an area where I think there could've been some common
    ground. But I'm not sure that you are able to do so.
        I also want to just touch base. I know there's been a lot
    of discussion here about medical debt. Six months ago, CFPB
    proposed a rule prohibiting credit reporting agencies from
    including medical debt on consumer credit reports.
        And although consumers with unpaid medical expenses may see
    an improved short term credit score, financial institutions
    will not be able to accurately conduct underwriting practices,
    something that may create barriers to accessing credit. In
    particular, what I was concerned with was the folks who are
    actually making a billing--and it's doctors and so forth, were
    you able to actually get feedback from them in terms of how
    they're going to be looking at providing services if they
    believe that they're not going to get paid in the first place
    and whether or not those reports are going to be made available
    to them? Did you get feedback on that? And what was the sense
    that you got from these physicians?
        Mr. Chopra. We did. And in fact, when we looked broadly at
    different practices within the industry, we actually find that
    many providers, many facilities do not even engage in credit
    reporting. I think the question sometimes becomes where
    inasmuch the debt is sold or reassigned, there may be firms
    that are putting information on credit reports that is badly
    inaccurate.
        So I think we have serious concerns that people are paying
    debt that they may not even owe in the first place. And there's
    a broad recognition that medical bills are very different than
    the application process you go through when it comes to a
    mortgage, a credit card. Yeah.
        Senator Rounds. My time is expired. But I just want to say,
    first of all, thank you, Mr. Chairman, for your service on the
    Committee. And I would just say I think that while the intent
    of this was right, I think the implementation of this may be
    doing some harm.
        And I'm hoping that we'll be able to review this and
    perhaps make some modifications because while we don't want
    that debt to ever be misinformed because of the time it takes
    for insurance companies to pay back and forth and to pick up
    debt and so forth. I really am concerned that this may do more
    harm than it does good for some of those individuals that are
    perhaps looking to get services that physicians may actually
    decline to provide or suggest they go elsewhere. But with that,
    Mr. Chairman, thank you.
        Chair Brown. Senator Reed, you're now recognized.
        Senator Reed. Well, thank you very much, Mr. Chairman. Let
    me begin by commending you and saluting you for your great
    leadership here. We all understand you're the Chairman of this
    Committee because of the generosity of a senior member. That's
    a joke. You're the Chairman of this Committee because you care
    deeply about the issues that affect working men and women.
        Chair Brown. Because I have two grandchildren in Rhode
    Island, I will visit your State even more and to thank you for
    doing that.
        Senator Reed. Well, you're welcome. But let me say thank
    you very much.
        Director Chopra, we passed on a bipartisan basis in 2006
    the Military Lending Act to protect our men and women in
    uniform. And everyone on this dais and on Capitol Hill takes
    pride in everything we do to protect service men and women.
    What is the role of CFPB in supervision and enforcement,
    particularly supervision?
        Mr. Chopra. Well, we are responsible for making sure that
    law is faithfully administered. Not only do we enforce it, but
    we also take a look at how banks and nonbank companies are
    honoring the rights of servicemembers. We know that they must
    follow for a set of loans a cap--an APR cap. And where we find
    any violations, including if they insert illegal arbitration
    clauses in contracts, we can take those companies to court. And
    we have done so repeatedly.
        Senator Reed. And approximately how many enforcement
    actions and how much money is returned to service men and
    women?
        Mr. Chopra. I believe it's been hundreds of millions of
    dollars. I need to get the exact numbers. In many cases, we
    have taken action against repeat offenders, those who have
    routinely violated the law. And these consist of firms who have
    violated this are largely outside of the chartered banking and
    credit union industry.
        Senator Reed. And how integral is supervision to
    enforcement? Can you----
        Mr. Chopra. Yeah, I think it's--that examination of
    companies is really what prevents the problems from spreading.
    When it comes to the Servicemember Civil Relief Act, the
    Military Lending Act, companies really should be looking to see
    if they are serving an active duty servicemember and not
    breaching the law. And I think that supervisory process helps
    people prevent a lot of the rip offs that may have even happen
    unintentionally.
        Senator Reed. There's another issue that we've talked about
    previously. That's the buy now, pay it later loans which are
    increasingly popular. And particularly in the holiday shopping
    season when people looking toward gifts and stretch their
    spending as much as possible, can you give us an update on what
    your agency is doing to ensure that these buy now, pay later
    loans are consistent with all the rules?
        Mr. Chopra. Yeah, we don't want--we want to see new types
    of products and services. But we don't want to see companies
    exploit loopholes or arbitrage around congressional mandates.
    So one of the things that we did is we put forth an
    interpretive rule that will help those buy now/pay later
    companies understand how the existing law applies to them.
    We've gotten some very good cooperation and many are looking to
    be transparent and really serve consumers fairly.
        Senator Reed. Over the next few weeks, is it possible to
    publish updated data that shows what you've been able to do to
    help improve the buy now/pay later process and also available
    to support additional rulemaking if necessary?
        Mr. Chopra. Well, unlike banks, the buy now, pay later
    companies don't put forth regular data. But we are in constant
    communication with States who license many of them. So I'll
    look to see what we can do on that front.
        Senator Reed. Thank you very much. And I want to thank you
    also, Director. You've done a superb job. Thank you very much.
        Mr. Chopra. Thank you so much.
        Senator Reed. Thank you, Mr. Chairman.
        Chair Brown. Thank you, Senator Reed. Senator Tillis of
    North Carolina.
        Senator Tillis. Thank you, Mr. Chairman and Mr. Chopra.
    Thank you for coming before the Committee. Mr. Chair, I'd like
    to seek unanimous consent, that I had some letters expressing
    in front of the banking industry, Consumer Bankers Association
    and others, about some of the concerns with the regulatory
    overreach of Mr. Chopra in his current capacity.
        Chair Brown. No objection. So ordered.
        Senator Tillis. Thank you. Mr. Chair, before I get started,
    I also want to thank you for the time that we've spent together
    on the Committee. The Chair and I enjoy a good personal
    relationship. That includes a couple of jabs from time to time
    or the weekend. I know that you're moving out of the Senate,
    but I hope we can keep those missives going. And I also want to
    welcome Senator Schiff to the Committee.
        Mr. Chopra, I want to get right to--I was trying to figure
    out how I could ask this question. To what extent do you feel
    comfortable with the cost-benefit assessment on the dozens of
    regulations that your agency is putting out and imposing on
    industry and ultimately consumers?
        Mr. Chopra. Well, what we do is we take very seriously the
    requirements. And it's subject to quite a bit of scrutiny----
        Senator Tillis. But at the end of the day--let me----
        Mr. Chopra. ----about the--if I could finish. I think----
        Senator Tillis. No, let me use my time. And we'll let the
    Chair if he wants to let you expand later on. I'm thinking more
    in terms of if I took your cost-benefit analysis and I brought
    it to a staff that used to work at Pricewaterhouse and take a
    look at how extensive that.
        Let's say that your cost benefit analysis was not something
    you're reporting to members on this panel and to Congress but
    something that would be subjected to the scrutiny of a C-Suite
    board of directors. I just don't see the cost-benefit analysis
    rising to a level of quality that I would expect out of a
    first-year staff at Pricewaterhouse. I don't want you to
    respond to it here.
        But it'd be great if you could submit for the record why
    you believe that you've produced an analysis of the impact of
    the cost of these regulations that ultimately are borne by
    consumers so that we have a better understanding of just want
    your regulatory overreach was. I know you do a good job of
    filibustering. So I'm just asking you to get some of that for
    the record so that I can move on.
        But I'd particularly like to get an understanding. Let's
    just use your cost-benefit analysis. Can you give me an idea
    over--since you've been leading the agency since 2021, I'd like
    to get an idea of what in your assessment is the underlying
    cost of the regs that you've been responsible for putting in
    place since 2021 for the purposes of the record.
        Mr. Chopra, tell me about why I should reject the notion
    that you may be one of the most polarizing partisan figures to
    actually assume your role. And I'm going back to McWilliams. I
    want to go back to the coup.
        I want to go back to what I think is you may get the MVP
    for making financial regulators outside of the Fed the most
    partisan agencies in my time in watching this. Tell me why I'm
    wrong. Tell me why the coup with McWilliams was appropriate.
    And tell me why some of the behaviors in the other financial
    regulators and your role in influencing them was appropriate
    and to what end did it serve the American people.
        Mr. Chopra. Well, all we are doing is trying to discharge
    the duties under the law. You ask about the FDIC. Chairman
    McWilliams resigned amid a DOJ investigation. We were clearly--
    --
        Senator Tillis. And so you had no fingerprints on that?
        Mr. Chopra. Oh, well, certainly, we wanted to make sure
    that the law which specifies how votes should be counted. We
    wanted to make sure it was.
        Senator Tillis. Someday in the future----
        Mr. Chopra. And I think I want to say that----
        Senator Tillis. ----I would love, Mr. Chopra, for you to
    share that table with former Chair McWilliams so that we can
    have a fulsome debate about that because I have a different
    interpretation of the facts.
        Look, Mr. Chopra, I don't like it and I'm told other
    regulators--I get no joy out of going after witnesses in this
    or any other Committee. But as somebody who is trying to work
    across the aisle and as somebody who has taken tough votes that
    have put Republicans out of their comfort zone with me, I take
    exception to people who come before this Committee with some
    sort of a righteous mandate to be absolutely partisan.
        If you can give me one examples of where you've actually
    stepped up and led and made people of your ideology and your
    party nervous because you were doing the right policy thing,
    that would be something. If the Chair will give you time, I'd
    like to hear from you.
        Mr. Chopra. Well, certainly, I took a lot of heat from
    people who share a lot of my views when it comes to banking and
    debanking. A few years ago, we actually led efforts to stop
    people, big tech companies and banks, from purposely closing
    accounts or freezing funds based on people's political speech.
    And that, to me, was totally inappropriate.
        Senator Tillis. Probably going to have to----
        Mr. Chopra. We had----
        Senator Tillis. Well, that's fair. But that's sort of a lob
    at the net. That's----
        Mr. Chopra. No, it's not. I can keep going and going.
        Senator Tillis. No, I'm saying that of course you did that.
    That wasn't a--that's a defensible position that I think any
    reasonable minded Democrat could get behind. But for you to
    suggest that you didn't start issuing policies, de facto
    policies with the FDIC in your post at CFPB is a weak argument
    to me. Thank you, Mr. Chair.
        Chair Brown. Thank you.
        Senator Warner from Virginia is recognized.
        Senator Warner. Well, thank you, Mr. Chairman. Let me first
    of all just say how much I have enjoyed working with you not
    only on this Committee but across the----
        Chair Brown. Thank you.
        Senator Warner. We have not always agreed, but we have been
    able to disagree respectfully, and I think you have done an
    extraordinary job. I think this body will be lesser, and a
    whole lot of folks are going to think back about who stood up
    for folks who don't always get a fair break time and again, and
    it has been a real honor to work with you. We are going to miss
    you, obviously going to miss Senator Tester.
        Chair Brown. Thank you, Mark.
        Senator Warner. And I also just have to say my friend,
    Senator Tillis, we work on a whole lot of stuff together. And,
    you know, Director, you and I have had disagreements, but I
    actually think, you know, the record of the CFPB under your
    tenure, Lord knows it has been attacked a lot. The
    constitutionality has been attacked a number of times. Again, I
    am glad the court stood up for the funding mechanism we have.
        But I think about some of the things that you have done and
    what it is actually doing for Americans and Virginians. You
    know, recently CFPB announced that it was returning about $1.8
    billion to 4 million consumers who have been misled. I can tell
    you that the Bureau is now in the process of distributing $55
    million back to Virginians. That is money back in your pockets.
        I am not sure that those Virginians who are getting those
    refunds are going to say, ``Gosh, that CFPB, that must be some
    over-the-top partisan entity.''
        You know, and something you are working on now that, again,
    I think probably has some opportunity for broad bipartisan, the
    proposed rule on data brokers. This is something that, again, I
    don't think there is a Democrat/Republican view.
        We looked recently about the--my head has been exploding
    about the so-called Salt Typhoon and how the telecoms have all
    been penetrated by China. They can get all this information.
    But the truth is, sometimes our adversaries can buy this
    information from data brokers, and particularly when you are
    thinking about even members--I think it was Duke came out with
    a study around getting critical information about our members
    of the Armed Forces.
        Think about, my goodness, their ability to go--also go
    after those who are not undercover in the intelligence
    community. Can you share a little bit about how these data
    brokers--how adversarial countries like China and Russia use
    our existing rule structure? They are not--they don't have to
    hack into us. They can actually just use the existing
    marketplace. And what kind of valuable information is then
    potentially put at risk?
        Mr. Chopra. We used to a long time ago think about data
    breaches, about, you know, hackers getting into your accounts,
    taking your money. But when you look at Equifax, Anthem,
    Marriott, it has all been Chinese Communist Party, Chinese
    People's Liberation Army, other State and non-State actors
    designing a way to collect information about us for their
    purposes.
        But now you don't even need to hack in sometimes. You just
    go and buy it. You can also, if you are a stalker, go buy
    information about the person who is trying to escape you. You
    can also, as a scammer, buy lists of people who are vulnerable,
    maybe suffering from cognitive decline, but it is clear that we
    received a lot of input to make sure that guarding people's
    privacy from data brokers is increasingly a national security
    imperative, too.
        Senator Warner. Well, again, I think this is an area that,
    you know, does fit clearly squarely into consumer financial
    protection, and I know there is a lot of interest bipartisan-
    wise, even on legislation, so I hope we will pursue that.
        I want to raise one last topic, because it is a topic that
    my friend, Senator Kennedy, and I have worked on. As somebody
    who was here and proud to be part of the Dodd-Frank--proud to
    be part of the portions of Dodd-Frank legislation that were
    actually bipartisan, Title I and Title II, you know, one of the
    things that came out of that was FSOC, you know, this notion of
    creating an entity that looks above the silos.
        And, candidly, under both Democrats and Republicans, I
    don't think FSOC has been what I hoped it was going to be. And
    this is as much an appeal to the incoming Administration, but
    Senator Kennedy and I have got a bill. If there was ever a
    topic that seemed to be made for an FSOC type review, it would
    be AI and the ability to have AI manipulate the public markets.
        I know you don't have much time, but if you could just
    touch on the importance of FSOC and also this still overhang we
    have with AI and financial market manipulation.
        Mr. Chopra. Yeah. I agree. I think what you and Senator
    Kennedy have put forward, I really worry about disruptions to
    our treasury markets, which could really dislocate us and have
    serious effects on our economy.
        I think it is true that the Financial Stability Oversight
    Council, it is good at writing reports, but it has not really
    been fully exercising how to make sure that these systemic,
    potentially dangerous systemic events are avoided. So I think
    we will want to keep working with you and Senator Kennedy and
    others to make sure that that--those are not just initials but
    it is actually doing something to protect our financial system.
        Senator Warner. And, again, thank you, Mr. Chairman. And I
    know you are good at, like, cutting off when I try to steal
    that extra 30 seconds, so----
        Chair Brown. Today I would let you go as long as you want,
    Mark.
        Senator Warner. Thank you, Sherrod.
        Chair Brown. Senator Kennedy from Louisiana is recognized.
        Senator Kennedy. Thank you, Mr. Chairman. Just a point of
    personal privilege. Sherrod, I have enjoyed working with you,
    and I wish you well.
        Chair Brown. Thank you, John.
        Senator Kennedy. And I mean that.
        Chair Brown. Thank you.
        Senator Kennedy. I still remember one of our earliest
    hearings. I was brand new, green as a gourd, and you and Tillis
    and I got into a Meat Loaf lyrics discussion.
        [Laughter.]
        Senator Kennedy. It was one of the highlights of my life.
        [Laughter.]
        Senator Kennedy. Mr. Chopra, can the President of the
    United States fire you?
        Mr. Chopra. Yes. Of course.
        Senator Kennedy. OK. Have you had any discussions with the
    new Administration?
        Mr. Chopra. That is really for you to discuss with them.
    But, no, we serve at the pleasure of the President.
        Senator Kennedy. OK. Here is one of the things that I have
    always wondered. Why haven't you taken a look at what our
    universities have been doing, in terms of tuition?
        I was reading a study the other day put out by the New York
    Fed. It is a little dated. Things have probably gotten worse.
    But 60 cents of every dollar that our kids borrow has been
    diverted into higher tuition payments. And universities have
    gotten more and more and more expensive, so kids borrow more
    and more and more money, so universities can hire more and more
    people and raise tuition to pay for it. And that doesn't seem
    fair to me.
        Why haven't you asked your people--or maybe you have and I
    don't know about it--to take a look at what, if any, nexus
    there is between this?
        Mr. Chopra. Yeah. Well, we have found some nexus. When I
    was a regulator at the CFPB 10 years ago, we actually went
    after some of these schools. What they were doing, they were
    jacking----
        Senator Kennedy. You went out to the for-profit schools. I
    am talking about some of our more prominent universities that
    clearly keep raising their tuition as kids borrow more money. I
    am----
        Mr. Chopra. I agree with you.
        Senator Kennedy. ----not talking about for-profit, but I am
    talking about the not-for-profit universities.
        Mr. Chopra. I agree. I agree that there are serious
    problems with how some universities can steer people into loans
    to borrow more and more and more.
        And I think as we think about fixing our student loan
    system, I don't know if the existing one is one we want to
    keep, because not only is it burdening a lot of people but it
    may be creating the incentives for some universities to really
    be pushing up the costs, and that is actually a bad cycle. And
    we have seen it. We have seen it a lot with some of the for-
    profit schools but also some of the nonprofits as well.
        Senator Kennedy. We had a former president at LSU who was
    asking for yet another tuition increase from our legislature. I
    am paraphrasing now. And a legislator asked him, he said, ``How
    do you determine how much to increase tuition?''
        And in a rare moment of candor he said, ``I just go out in
    the parking lot, student parking lot, and count the BMWs.''
        He is no longer president, by the way, nor should he be.
        I just--I mean, I understand President Biden's approach has
    been to forgive the debt, but it seems to me that at least a
    partial root of the problem is universities have gotten greedy,
    and they are--it is costing more. Kids are spending more to
    learn less.
        And the rubber is about to meet the road because kids are
    just saying now it is not worth going to college. The numbers
    are declining. At some point, I mean, demand is not completely
    inelastic. And I sure would like you folks to take a look at
    that.
        Mr. Chopra. Well, we will keep doing that, and I will
    follow up with you directly. I will share with you that we have
    got to do something for the 40 million people who have student
    debt, but we also have to make sure there is not another 40
    million who are really going to get into too much debt because
    of this cycle that you have mentioned as well.
        Senator Kennedy. Let me ask you one last question in my 8
    seconds. You are on the FDIC Board?
        Mr. Chopra. Yes, sir.
        Senator Kennedy. How many people from Silicon Valley Bank
    and Signature Bank went to jail? How many executives did you
    all put in jail?
        Mr. Chopra. Well, I can't comment on any investigations,
    but we are trying our best to----
        Senator Kennedy. No. I am asking how many--it has been a
    couple of years. How many of them went to jail?
        Mr. Chopra. If you are worried that there is not enough
    accountability, I share that worry and we have got to make----
        Senator Kennedy. They stole money. How many of them went to
    jail? How many did the FDIC----
        Mr. Chopra. The FDIC can't put them in jail, but the
    Justice Department has put zero in jail so far.
        Senator Kennedy. Zero.
        Mr. Chopra. So we are going to make sure that--I can't
    disclose everything, but it needs to be fully investigated, the
    role that every individual played.
        Senator Kennedy. Well, you had better hurry, because I
    think it is unconscionable.
        Thank you, Mr. Chairman.
        Chair Brown. Thank you, Senator Kennedy. You know, and you
    worked on our RECOUP Act, which we had a strong vote here and
    couldn't get it moved on the floor because of industry
    opposition, as you know, by Senator----
        Mr. Chopra. Mr. Chairman, can I just make one comment?
        Chair Brown. Sure.
        Mr. Chopra. I will share that it is pretty upsetting when
    there are large banks or CEOs who are able to get off scot-free
    even when there is emergency measures. So I just share what
    many of you have shared with me, that there has to be some
    basic level of accountability, including for those at the top.
    And that is--and that is something that I have put as a
    priority at the CFPB of looking at the individuals, especially
    when it comes to these repeat offenders, and many of them need
    to be banned from the industry altogether.
        Chair Brown. Senator Warren from Massachusetts is
    recognized.
        Senator Warren. Thank you, Mr. Chairman. Mr. Chairman, you
    have led this Committee as a fierce fighter for consumers, and
    someone who has pressed all of America to recognize the dignity
    of work. And I speak for myself and for millions of people
    across this country to say we are grateful for your leadership.
    Thank you.
        So President Trump spoke to the concerns of millions when
    he said he would put a 10 percent cap on credit card interest
    rates. That is the kind of big structural change that will make
    a big difference to families across America.
        Over the last decade, giant credit card companies have
    jacked up interest rates to historic levels. Average interest
    rates have nearly doubled from 13 percent back in 2013 to 23
    percent in 2024, now the highest on record. Much of that
    increase has been driven by credit card companies tacking on
    just a few extra percentage points of interest to pad their
    profits, to the tune of an average of about $250 extra straight
    out of the pockets of every credit card holder in America in
    just last year alone.
        Director Chopra, thank you for being with us today. Just
    give us a quick summary about what the CFPB has been doing to
    help Americans struggling under the weight of credit card debt?
        Mr. Chopra. Well, we have put into place some rules that
    will stop credit card exploitation of loopholes to the tune of
    billions of dollars a year in penalty fees, making it--we are
    going to make it easier to switch. We are going to ensure that
    people can actually get those rewards they were promised, and
    so much more.
        Senator Warren. Good. So, Director Chopra, let me ask you,
    would President-elect Trump's plan to lower interest rates to
    10 percent do more to help unrig the credit card market? And if
    such a cap were enacted, does the CFPB have the expertise and
    the capacity to enforce that cap?
        Mr. Chopra. Well, we certainly have the capacity to enforce
    it. We enforce other types of interest rate caps. And, by the
    way, Federal law already has an interest rate cap on credit
    cards offered by credit unions, and that seems to work just
    fine.
        Senator Warren. All right. And let me just ask, because I
    had the rest of this, and that is, would a 10 percent cap on
    credit card interest rates, as the President-elect as proposed,
    would that help unrig the credit card system and help consumers
    across the country?
        Mr. Chopra. Yes.
        Senator Warren. Good. That is a short answer. Do you want
    to add any more?
        Mr. Chopra. Well, I think there is room for debate on where
    to set the number, but certainly we have found that other rate
    caps have allowed the market to function. But as the market has
    grown more and more concentrated, and that there is even more
    mega mergers potentially on the horizon, we need to make sure
    that those credit card companies aren't coordinating even
    subtly to jack up rates even higher.
        Senator Warren. OK. And that concentration means less
    competition----
        Mr. Chopra. That is right.
        Senator Warren. ----for customers.
        Mr. Chopra. And that is part of--I think that has
    contributed to these fat margins. We have found that Americans
    are paying an extra $25 billion a year compared to 10 years
    ago, even when controlling for market interest rates.
        Senator Warren. Wow, $25 billion. So let me ask, when the
    President-elect takes on the big credit card companies and
    lowers credit card interest rates to 10 percent, will he have a
    strong partner at the CFPB?
        Mr. Chopra. Well, the CFPB will enforce the law as written,
    and that is exactly what we would do.
        Senator Warren. OK. So I understand that some people on
    Team Trump are trying to undermine the President-elect.
    Billionaires who profit off cheating people are begging him to
    delete the agency. They are asking President-elect Trump to go
    back on his promise of a 10 percent cap on interest rates and
    instead put billionaires' profits ahead of the needs of working
    people.
        The CFPB has been in the trenches fighting for working
    families for over a decade, and so far it has forced Wall
    Street banks to return over $20 billion directly to families
    they cheated. Now, with a single move, President-elect Trump
    can smash that record, saving American families tens of
    billions of dollars in interest payments. And, when he does
    that, he will have a strong partner at the CFPB.
        So I just want to say thank you, Director Chopra, for your
    extraordinary record of service to people all across this
    country. Thank you for all you have done.
        Thank you, Mr. Chairman.
        Chair Brown. Thank you.
        Senator Cortez Masto from Nevada is recognized.
        Senator Cortez Masto. Thank you, Mr. Chairman. I want to
    welcome our new Senators, Senator Schiff and Senator Kim, to
    the Committee. Welcome. Look forward to working with you.
        Chairman Brown, I, too, I have to just say a few words
    about you, my friend. I want to thank you for your years of
    leadership, your commitment, not only to this Committee but the
    work that you have done, but most importantly of everything,
    what you constantly talk about and believe in, which is the
    dignity of work. I can't stress how much I truly believe in
    these words.
        You said it, and you say it always, that the dignity of
    work is the belief that hard work should pay off for everyone,
    no matter who you are, where you live, or what kind of work you
    do, whether you punch a clock or swipe a badge, earn a salary
    or make tips, or raising children or caring for an aging
    parent, you deserve financial stability. And I couldn't agree
    more.
        Since I joined the Banking Committee, I have been inspired
    by your fight for the people not just of Ohio but across this
    country. I am grateful for your leadership, and I have to thank
    you for everything that you have done. You are leaving an
    incredibly enduring legacy, and I thank you for that.
        Director Chopra, I, too, want to thank you for being here
    today. We have had many conversations. I have to say, also,
    just thank you for standing up for Nevadans, you and your
    entire team. Thank you for defending them against junk fees,
    high-cost financial products, illegal debt collection, all of
    the above. Thank you.
        I do want to talk to you a little bit about the data broker
    proposed rule. And last week, as you well know, the Consumer
    Bureau requested comments from the public for the proposed rule
    to prevent data brokers from selling sensitive personal data to
    scammers, stalkers, and spies, and I think we can all agree
    that it is an important first step here.
        Can you talk a little bit, however--I have been hearing
    from law enforcement in my State and across the country--what
    responses from law enforcement have you heard as part of the
    public comment? And how do we find that balance, that what you
    are trying to do is protect the data and the privacy of
    individuals today but also give law enforcement still the tools
    they need to go after the bad guys, those scammers?
        Mr. Chopra. Yeah. We want to make sure that law enforcement
    can locate witnesses, suspects, and ultimately discharge their
    duties to stop crime and fraud. We think many of the things we
    are doing as part of this will also increase accuracy of these
    data bases, which will help fight crime even better.
        We have not--the notice has not yet been published in the
    Federal Register. It is coming soon. But as part of that
    process, we are going to hear from all parts of the public, and
    the law enforcement community will need to share more with us.
        We have also heard, though, Senator Cortez Masto, from law
    enforcement who are concerned that currently data brokers are
    used to dox, police officers.
        We had one tragic situation in New Jersey where the child
    of a judge was murdered after information was obtained about
    them through a data broker. We know that these data brokers are
    also vectors of how crime can be committed, so we want to make
    sure that we are also preserving those legal pathways for
    legitimate uses by law enforcement.
        Senator Cortez Masto. Thank you. And for purposes of the
    law enforcement who have reached out to me, you are open to
    talking with them, hearing from them, working with them, as you
    move forward with----
        Mr. Chopra. This is an important issue.
        Senator Cortez Masto. I agree as well. The other thing I
    have to thank you about is the work that the CFPB does to
    really protect our servicemembers. In your report, you note
    that the Bureau secured $363 million in monetary relief from 45
    public enforcement actions that involved harm to servicemembers
    and veterans.
        You and I have talked about this. I have been working for a
    long time with the CFPB. I have seen it in action at Nellis Air
    Force Base----
        Mr. Chopra. Yeah.
        Senator Cortez Masto. ----talking to our servicemembers,
    figuring out how we get them the information to protect them. I
    can't thank you enough for the work that you do.
        And I have to stress, it is important because without the
    CFPB doing this, who else is doing it? AGs. But who else,
    right? And so I would love for you to talk a little bit about
    how the Bureau's work holding financial institutions
    accountable for illegal fees, high interest loans, false
    advertising, and other violations of the Military Lending Act
    affect our servicemembers and veterans and what the CFPB does
    to be there as that enforcement.
        Mr. Chopra. Yeah. During the George W. Bush administration,
    there was an important report about how financial readiness
    really contributes to force readiness, and how many people were
    separating from active duty service because of issues related
    to debt, how debt collectors were calling commanding officers.
        So it is not just the Military Lending Act. It is also
    other key laws, and we saw how in the financial crisis, the
    mortgage crisis, those servicemembers who were ordered to move
    had some of the biggest challenges, and they were the canary in
    the coal mine for the rest of the population.
        Senator Cortez Masto. Yeah. Thank you. Thank you, again,
    for everything that you have done, to you and your staff.
        Mr. Chopra. Thank you.
        Chair Brown. Senator Britt of Alabama is recognized.
        Senator Britt. Thank you, Mr. Chairman. Thank you so much
    for taking time to be here today.
        I want to start by just underscoring the need for serious
    reform at the CFPB. It is something that I have obviously
    discussed with you, I have been willing to put in writing, and
    so I just want to take this last hearing to really cement that.
        What we have seen over the last 4 years is just I feel a
    blatant misuse and a politicization of the agencies in ways
    that I believe it wasn't intended. The CFPB has transformed
    into a regulatory nightmare for the exact people and businesses
    that it is supposed to look out for.
        When you look at the way it is structured, you have one
    director, you have no board, you have no votes, and, really,
    outside of our opportunity to ask you questions in this
    setting, no real congressional oversight. And when you have
    just one solo director with nearly unlimited leeway to push his
    or her own agenda, you know, that is where I have a real issue.
        We have seen over the last several years, and we are seeing
    even, you know, now after the election, that despite a clear
    repudiation of this Administration's policies from the American
    people, that the CFPB is the only financial agency that has
    continued to push out last-second rulemaking. In my opinion, it
    is unacceptable, and reforming the CFPB should be an
    immediate--immediate priority for the next Congress.
        I also want to note again my serious concern with some of
    the regulations that have been promulgated under your
    direction, your efforts to eliminate medical debt from credit
    reports, for instance. I know we had a conversation about this,
    and we talked about the accuracy of those. And I want to make
    sure that those are accurate.
        But we also talked about what this could do to rural
    hospitals in my State and in States all across the country that
    are hanging on by a thread. And so taking these things into
    consideration, not just conversation but really understanding
    the cumulative impact of the things we are doing, and
    understanding that the people that you are trying to help this
    may actually hurt.
        Looking at things in a more comprehensive way I think is
    imperative. And in this instance, in particular, if more of our
    rural hospitals close their doors, it is going to leave
    thousands of people without medical care within hours of their
    home. Or, if you look at your 1071 rule that you and I had a
    good back and forth on at a previous hearing, the compliance
    costs alone are literally putting at risk community banks in a
    multitude of ways.
        And so when we look at, you know, how these things affect
    the big guy, I always talk about, what is the trickle-down
    effect to Main Street? What is the trickle-down effect to the
    community bank, the relationship banking that they get to do?
        And so I want to make sure that the agency continues to
    look at those cumulative impacts and how rules like this
    immediately hurt truly the most vulnerable.
        Meanwhile, we have financial fraud issues that are running
    rampant. Americans are being scammed out of almost $9 billion
    per year, and I believe our own Consumer Protection Agency
    seems to be nowhere to be found. And so I want to talk to you
    about that and give you an opportunity to maybe show me where
    you have been doing something.
        So when were you confirmed at the CFPB?
        Mr. Chopra. I believe it was September 30, 2021.
        Senator Britt. I love that you have got the exact date
    right there. So, per my review of the CFPB's website since that
    date, you have published 78 of your speeches as director. Do
    you know how many of those speeches focused on financial frauds
    and scam education?
        Mr. Chopra. Scam education?
        Senator Britt. Yes.
        Mr. Chopra. Well, I don't know how many of them, but
    certainly we have done so much when it comes to cracking down
    and combatting fraud. Just last week, Senator Britt, we sent
    $38 million to 93,000 Alabamans----
        Senator Britt. I appreciate that.
        Mr. Chopra. ----who were involved in a very harmful scam.
    And we are also looking upstream at where these scammers can
    really get some of the key data to perpetrate their crime.
        Senator Cortez Masto just asked me about data brokers,
    where we know people can buy data about older Americans and
    others who are vulnerable.
        Senator Britt. And so one of the things that I am concerned
    about is when I looked at your speeches I found just one that
    actually addressed that. And then, when I went back and looked
    at your blogpost, which we know is extremely controversial
    depending on who you ask--and kind of regulation by blogposts,
    which I think is inappropriate--I also only found one when it
    came down to this.
        And when I look at the core functions on your website that
    say, ``What is the CFPB about?'' one of your core functions
    says it is to enhance, you know, financial education. And when
    I looked at your budget that you put out, it looked that you
    requested, in addition to the 700 million, about 142 million,
    so about over $840 million to be used at your discretion.
        But when I looked at the actual investments that were made
    in--and I know I am out of time, so--but in actual education,
    it looked that it was only about 5.7 million. And so as the
    agency moves forward, I feel like actual education of consumers
    that are being scammed and harmed has to be of the utmost
    priority.
        Mr. Chopra. Well, if I could just respond for a bit, one of
    the things we have also tried to do is cut a lot of waste and
    drive efficiencies. So, for example, when it comes to
    disasters, our materials and information are bundled with
    information that FEMA provides. I think we don't want to
    inundate people with different pieces of paper from different
    agencies, but study specifically where are people consuming
    information, and how can we get them at the right moment?
        So I don't want the CFPB to be judged by the number of
    brochures it passes out. We should be judged on how we can arm
    people with the ability to spot scams and to crack down when
    it--when it takes place. But thank you.
        Chair Brown. Thank you, Senator Britt. And the work you
    have done, especially for veterans, to both warn them and
    educate them and recover money for veterans that are cheated is
    particularly impressive.
        Senator Van Hollen from Maryland is recognized.
        Senator Van Hollen. Thank you, Mr. Chairman. I do want to
    start by thanking you for your leadership on this Committee and
    all the work you have done in the U.S. Senate on behalf of
    working people.
        On this Committee specifically, of course, it is the
    Banking, Housing, and Urban Affairs Committee. Thank you for
    putting the housing and urban affairs piece back into the
    conduct of this Committee, including all of the affordable
    housing issues and the transit issues. So I want to thank you.
        I know our colleague, Senator Tester, is not here, but we
    are going to miss his voice as well.
        And welcome to Senators Schiff and Kim as new members of
    the Committee.
        Director Chopra, I just want to thank you and the CFPB for
    what you have done on behalf of consumers, including a lot of
    Maryland consumers. I looked at the distributions out of the
    civil penalty fund. These are funds that you collect from
    organizations engaged in fraudulent activity, cheating people
    out of their money. And I see that it has been over $3.3
    billion, including $71 million to over 144,000 Marylanders.
        So thank you for your efforts to get that money back
    because a lot of the powerful organizations that cheat them out
    of the money, you know, they have the ability to have some of
    their own lawyers. You are the people's sort of watchdog and
    lawyer on this, so I want to--I appreciate that.
        And thank you for mentioning the most recent efforts. I
    think it was going after credit--so-called credit repair
    organizations, which really, as you know, prey on those who
    really are struggling. These are people who are trying to fix
    their credit, and there is some organization out there
    representing that they are going to be able to do that and
    return their credit to a good place, only to cheat them out of
    more money. So thank you for those efforts as well.
        There is a lot to cover. You have been very effective when
    it comes to the student loan issue. We need to do more on that.
        On the medical debt piece, I think the evidence is pretty
    clear that people who get sick and all of a sudden have a big
    bill to pay should not be--have their credit ratings negatively
    influenced because of that one-time need. We should be finding
    ways to reduce the burden of medical debt. And thank you for
    your work on veterans and folks in the military.
        I wanted to just zero in in my final minutes here on the
    important work that you do with respect to the nonbank
    platforms, because, as you indicated in an earlier exchange in
    this Committee, we have--we have small banks that are governed
    by all sorts of regulations, but then you have these massive
    platforms that lend to millions and millions of Americans who
    do not have the same kind of oversight.
        And that is a major role of the Bureau. And if you could
    just elaborate a little bit more on why that piece is so
    important going forward.
        Mr. Chopra. Well, we saw in the lead-up to the financial
    crisis that it wasn't just issues with the banks. It was also
    these nonbank mortgage companies that were engaged in subprime
    lending that set people up to fail.
        And just recently we finalized a rule to make sure that
    those digital payment apps that tens of millions of people are
    using and whose use exploded during the pandemic, that they,
    too, are not engaging in illegal privacy intrusions, that they
    are making sure that fraud and errors are minimized, and that
    they are not improperly freezing people's funds or closing
    their accounts.
        We need to understand that these big firms, some of them
    touch millions of people across the country, and they, too,
    should hold up their end of the bargain.
        Senator Van Hollen. I appreciate that. If you could also
    just recap quickly where things stand on some of your student
    loan efforts.
        Mr. Chopra. Well, we have taken a major law enforcement
    action against Navient, formerly known as Sally Mae. Our order
    bans Navient from ever again re entering the Federal student
    loan servicing world. We need to make sure that loan servicers
    actually provide service, and that is going to continue to be a
    place where we know that people, when they cannot get an
    affordable repayment plan that they are entitled to, if they
    are steered into a more expensive option, it is not just bad
    for them. It is bad for our whole economy.
        Senator Van Hollen. Well, thank you.
        And thank you, Mr. Chairman, for holding this hearing. And,
    again, I can tell you that my Maryland constituents appreciate
    the fact that at the Federal level there is someone looking out
    to better protect them and provide redress when they get
    cheated out of their money. Thank you.
        Chair Brown. Thank you, Senator Van Hollen.
        Senator Warnock of Georgia is recognized.
        Senator Warnock. Thank you so very much, Chair Brown, and
    it has been a real honor serving with you on this Committee.
    Thank you for recommending me to serve, and I feel like we have
    done a lot of great work together over the past 4 years. You
    are an incredible example of public service.
        I want to echo what Senator Van Hollen has said. Thank you
    for putting the housing and the urban affairs back in this
    Committee. And I can't say enough about your leadership, and I
    am grateful for your friendship.
        Thank you so very much, Director Chopra. As always, good to
    see you. Thank you for all of the actions that you have taken
    to improve the financial lives of all Americans. You really
    have been an advocate and champion for the people. Under your
    leadership, the CFPB has returned more than $6 billion to
    harmed consumers--6 billion.
        You have been focused on reducing excessive junk fees,
    ensuring student loan companies are not taking advantage of
    borrowers, and putting money back in the pockets of hardworking
    Americans. I see the impact of this work up close, not only as
    a Senator but as a pastor. And as someone who had to depend on
    these student loans to get through my own education, I know the
    importance of the work that you do.
        I especially commend your extensive work to protect
    consumers in rural communities and underserved communities. And
    this is critical work that must continue during the next
    Administration.
        I also look forward to working with our incoming chair,
    Senator Scott, on issues we both care about, like ensuring
    access to affordable housing and expanding economic opportunity
    for working families. I look forward to working with Chairman
    Scott.
        Director Chopra, when you appeared before this Committee in
    June, we discussed the consequences of medical debt, especially
    for those who are living in rural communities. A medical
    emergency can literally just change people's lives in deeply
    consequential ways, and that is why yesterday Chair Brown and I
    sent you a letter emphasizing the importance of finalizing the
    CFPB's proposed rule to block medical debt from appearing on
    most Americans' credit reports.
        I think this is so critical and so important. It is an
    issue that you and I have worked closely on. Medical debt is
    often unanticipated, it is unplanned, and it can be high even
    if someone is insured, where it is something that could happen
    to any one of us. It could happen to anybody.
        Medical debt also disproportionately affects those living
    in States like Georgia where Medicaid has not yet been
    expanded.
        Director Chopra, how would the CFPB's proposed medical debt
    rule protect Americans from the unfair consequences of medical
    debt on their credit report? And why is this rule so important?
        Mr. Chopra. Well, when I think especially about you
    mentioned rural areas in Georgia, you may know that there are
    people who have a serious emergency and sometimes need to have
    an air ambulance. And that air ambulance, they don't get to
    shop around. They get the one that is available. Or even just a
    regular ambulance, it is not something that you search online
    and choose.
        And what happens is, is they sometimes are in situations
    where their insurance company--and there is in network, out of
    network--they get enormous amounts of debt, and medical issues
    are a huge driver of bankruptcy, including in rural areas.
        We do not want our health care system leading to people
    being financially ruined. And I think our efforts and our
    proposed rule to restrict how some of that information gets on
    credit reports, we don't want there being further impacts on
    higher rates on loans, not passing an employment verification
    check, not being able to get an apartment. We shouldn't be
    kicking people when they are down, and we shouldn't let debt
    collectors weaponize that credit reporting system.
        Senator Warnock. Thank you so much. There is so much more I
    could say about this, but I want to quickly get to another
    topic.
        In July of last year, I held a hearing in my Consumer
    Protection Subcommittee on unfair overdraft fees charged by
    some banks, shedding light on how these unnecessary fees harm
    Americans, while last week the CFPB announced it would begin to
    send refund checks to Americans who were charged illegal junk
    fees by a group of credit repair companies.
        How much money will this put back in Americans' pockets?
        Mr. Chopra. Just that one action I believe is about $2
    billion, and I think we sent over 240,000 checks just to
    Georgia.
        Senator Warnock. That is right. $2 billion, 240,000 checks
    to Georgia, equalling more than $103 million. This decision
    should be a warning, it seems to me, to any financial services
    company that is illegally charging junk fees to any consumer.
    What lasting change do you think aggressive enforcement like
    this will have?
        Mr. Chopra. Well, we need to make sure that not only are we
    catching it when it is happening, but we are stopping it before
    it takes place. It is why we have done other work to put into
    place stronger safeguards to stop illegal junk fees from
    permeating the American consumer.
        Senator Warnock. Thank you so much for your work. I look
    forward to you finalizing the rulemaking on this issue, and we
    look forward to the work that we will do ahead in protecting
    consumers.
        Mr. Chopra. Thank you so much.
        Chair Brown. Thank you, Senator Warnock.
        Senator Schiff, welcome, and you are--Senator Schiff from
    California. Glad you are here.
        Senator Schiff. Chairman, thank you. I am thrilled to be on
    your Committee, and I want to begin by thanking you for your
    extraordinary service and how you have been just an
    indefatigable champion of working families. You have been the
    Senate's canary in the coal mine, sounding the alarm whenever
    the dignity of work was threatened.
        Chair Brown. Thank you, Senator Schiff.
        Senator Schiff. Truly grateful.
        And, Director, thank you for your very important work. In
    particular, I want to thank you for the efforts you are making
    to combat the sale of Americans' personal, private, sensitive
    data, in particular to foreign adversaries. I appreciate your
    using whatever authority you have to combat that. And whatever
    authority you don't have, we need to act by statute to make
    sure that we are protecting the privacy of the American people.
        I want to concentrate my few minutes, though, on, really,
    the top challenge that Californians are facing, and that is
    housing. And I want to drill down in particular on one issue we
    discussed a bit earlier, and that is the use of algorithms or
    AI to set rent when large holders of real estate use these new
    tools.
        On the one hand, it has, I am sure, been a historic
    practice to try to figure out what will the market bear on rent
    as any other good or item or necessity? At the same time now,
    with the use of this technology, it feels a little like calling
    around to your big competitors and saying, what rent are you
    going to charge, so that I can charge the same rent or we can
    all charge a higher rent?
        Where does market research cross the line into price
    fixing? And what should we do about it?
        Mr. Chopra. Well, we have seen, Senator Schiff, so much use
    of algorithms and AI in housing. When Chairman Brown started,
    we talked about how technology should help people get housing,
    not actually make it worse. We have seen algorithms actually
    mismatch people, using just their last name and first initial.
    So imagine S. Brown or A. Kim falsely matched with someone and
    blocking them from getting an affordable apartment.
        But those same software companies also offer arrangements
    to help you track rent, and we should not allow that to be a
    vehicle for price fixing. The Department of Justice has sued
    RealPage for algorithmic price fixing. The complaint details
    about how the company set up the algorithm in order to push up
    rents across the country.
        In California and across America, people are dealing with
    rent that is just too damn high, and we need to make sure it is
    not the result of price fixing or gouging enabled by
    technology.
        Senator Schiff. And has that been measurable? That is, can
    you see in markets when they have used these algorithmic tools
    what the rent increases have been compared to other places that
    have not utilized that technology?
        Mr. Chopra. I don't have it off the top of my head, but I
    believe the DOJ's complaint and some other research has showed
    how it can lead to collusive practices. And we need to also
    look at how certain types of owners of real estate, there has
    been concerns about certain private equity funds buying all of
    the rental housing in certain places or buying single-family
    homes, leaving them vacant, waiting to push up rents.
        So this is not just--there is important supply issues, I
    agree, but we have got to look at these business practices as
    well to make sure they are not gouging renters.
        Senator Schiff. And on that issue of corporate ownership of
    housing, which has become more and more prevalent, what kind of
    work are you doing in this area? And where are you seeing--
    where are you seeing the greatest impacts of that new
    investment focus of Wall Street?
        Mr. Chopra. Well, our focus really is on mortgage. We want
    to make sure that people have lots of options to refinance
    their mortgage. But you are right, corporate ownership of real
    estate, after the financial crisis there were so many homes
    foreclosed on, and many got swallowed up by deep-pocketed
    investors. Many thought that this would help the market
    correct, but we haven't seen that. And, in fact, we have seen
    many people facing rental markets that are so tight that rents
    just keep going up and up.
        Senator Schiff. Director, thank you.
        Thank you, Chairman. I yield back.
        Chair Brown. Thank you, Senator Schiff.
        Senator Kim of New Jersey, welcome. Welcome to the
    Committee. Welcome to the Senate. Glad you are here.
        Senator Kim. Yeah. Thank you, Chairman. And it is an honor
    to be able to overlap with you, be able to have a chance to be
    able to serve together, however brief, but just the incredible
    work that you have done over your career, and that certainly
    puts a lot on us to make sure that we are continuing this
    fight.
        And, Director, great to see you. I wanted to just kind of
    get into a few things. One of the biggest things I have tried
    to wrap my head around in this work is this kind of concept of
    what I call customer service governance, you know, just trying
    to make sure that we are being responsive to the people, trying
    to think through all the different ways in which people
    interact with Government, and how do we make those interactions
    as frictionless as possible.
        And one thing that I was intrigued by is the work that your
    organization does direct to, for instance, the people of New
    Jersey. I think you fielded nearly, you know, 100,000
    complaints from people in New Jersey, returned over $60 million
    just in the last year. I guess I want to get a sense from you,
    you know, how that component of CFPB is working. Is there
    something there that can be scaled? Is there more that we can
    be doing to ensure that, you know, people are getting their--
    you know, their returns, getting the resources that they
    deserve?
        Mr. Chopra. I love this question, because we want
    Government to be responsive to real problems, not fake ones.
    And one of the things that we do is we have a consumer response
    center, and it is not just a place where you send an email and
    it goes into a black hole. We, in--since 2021, we have seen
    cases surge to about 200,000 a month, and we require financial
    institutions to respond.
        And that means without the CFPB spending any resources,
    people are getting refunds, their credit report corrected, and
    we have a dashboard that shows where people are complaining and
    about what.
        So, in New Jersey, we know the types of complaints people
    have and the companies who are the subject of those complaints.
    This is all shared with law enforcement, and people tell me
    that when they file a complaint, get a response, sometimes get
    a refund, they think, wow, actually, their Government is doing
    something----
        Senator Kim. That is right.
        Mr. Chopra.--for them. And we want--we have been working
    with other agencies to replicate that.
        Senator Kim. Now one of the biggest complaints that I
    constantly hear, and I hear it not just from my constituents, I
    hear it from my mother and my father, about--you know, about
    scams that are targeting elderly in our countries, targeting
    our seniors. I guess I just wanted a gut check from you. I know
    there are certainly steps that we have been trying to take on
    this, but, like, are we making any progress here? Because it
    feels so overwhelming sometimes just in terms of the sheer
    volume of these attacks, and I imagine they are getting more
    and more sophisticated.
        So I guess I wanted to just ask you, are we at the scale
    that we need? Are we moving in the right direction? Or are we
    still falling behind here?
        Mr. Chopra. Well, it is pretty tragic because a lot of
    older Americans actually get texts and calls that seem so
    authentic. And with generative AI, they can even clone voices
    of their family members. These are so sophisticated that we
    need to look upstream.
        One of the places where a lot of scam texts come from is
    actually in Southeast Asia, and it is actually those who are
    victims of human trafficking that are sending those texts. We
    have to make sure we are sanctioning----
        Senator Kim. The victims of human trafficking----
        Mr. Chopra. Yes.
        Senator Kim. ----that are being forced to do this?
        Mr. Chopra. Yes. They are being forced to scam people in
    America, and we have to make sure that we are sanctioning. The
    Treasury Department has done some of that. We have to make sure
    that our big telecom carriers are blocking some of these scam
    texts, and we also need to make sure that digital payment
    services are really identifying fraud and errors earlier.
        I worry we sometimes are playing a game of whack-a-mole but
    need to go upstream to combat this at scale.
        Senator Kim. I think that that scaling component is what I
    am trying to fixate on, because, you know, no doubt that we are
    taking some steps forward. But, again, just the sheer volume--
    and as you said, with, you know, the advent of AI and other
    technologies that are out there, I guess I just wanted to get a
    sense from you--you know, as you are seeing this across your
    portfolio, where are we heading here in terms of the capacity
    for AI to be used in those nefarious ways?
        I just imagine that, you know, you can see things in terms
    of trajectories that are important for this Committee to hear
    about, to know about, so that as we are trying to make
    decisions, we have a sense of what it is that we are trying
    to--trying to stop down the road.
        Mr. Chopra. Well, I think this Committee played a big role
    in making sure that reports, dossiers about consumers, are not
    being misused or weaponized. It is one of the reasons the CFPB
    is proposing rules to update the Fair Credit Reporting Act
    regulations, to rein in some of the worst data broker abuses
    who often sell this data to scammers who are ripping off older
    Americans.
        Senator Kim. Great. Thank you so much.
        I yield back.
        Chair Brown. Thank you, Senator Kim.
        Director, thank you for joining us. Thanks to the witness.
    Thanks for all of you.
        For Senators who wish to submit questions for the hearing
    record, those questions are due 1 week from today, Wednesday,
    December 18.
        To the witnesses, please submit your responses to questions
    for the record 45 days from the day you receive them.
        Mr. Chopra. And if I could, in addition to welcoming and
    thanking Senator Kim and Senator Schiff, I also want to offer
    my huge gratitude to Senator Tester and especially to you,
    Chairman Brown. I think I have sat before you many, many times
    over the decade, and you have been an enormous champion for
    every single consumer in America. And you have taught me so
    much, and I am forever grateful.
        Chair Brown. Thank you, as you have taught this Committee a
    great deal. In both jobs that I have seen you do, you have done
    spectacularly well.
        Thank you, and the Committee is adjourned.
        [Whereupon, at 11:48 a.m., the hearing was adjourned.]
        [Prepared statements, responses to written questions, and
    additional material supplied for the record follow:]
                   PREPARED STATEMENT OF CHAIR SHERROD BROWN
        This Banking, Housing, and Urban Affairs Committee hearing will
    come to order.
        When I joined this Committee in 2007 it had a reputation as a bit
    of a sleepy Committee.
        Much of Washington seemed to have reached a consensus--Wall Street
    ought to be left largely to its own devices. Big banks knew best.
        We all know how that turned out.
        Less than 2 years later, the economy was in freefall. Banks were
    collapsing. Layoff notices and foreclosure warnings were landing in
    inboxes and mailboxes, ruining lives around the country.
        In the wake of the crisis, we passed the Dodd Frank Wall Street
    Reform and Consumer Protection Act.
        It was the first time in 75 years that we reined in Wall Street and
    its reckless obsession with profits at the expense of everyone and
    everything else.
        That law worked. Nearly 15 years later, our banking system is
    safer, banks hold more capital, and they're better prepared to handle a
    crisis.
        Of course, we know Wall Street and its lobbyists don't give up
    easy.
        After we passed Dodd-Frank, one industry lobbyist said: ``now it's
    halftime.''
        Wall Street was true to its word.
        They immediately went to work trying to roll back and water down as
    many of the protections we put in place as possible.
        When I took over as Chair of this Committee nearly 4 years ago,
    Washington still called it Senate Banking.
        It was still pretty much a Committee dedicated to protecting Wall
    Street and the financial industry, and fulfilling their lobbyists'
    wish-lists--in particular, tearing down the safeguards that protect
    Americans' money, and that protect taxpayers from ever having to bail
    out Wall Street again.
        We changed that.
        We put the focus of this Committee back where it should be--the
    people who make this country work.
        The stock market doesn't drive the economy. Workers do. And on the
    Senate Banking, Housing, and Urban Affairs Committee, we have made it
    our mission to serve them.
        That's why we improved public transit around the country for the
    millions of workers who depend on the bus or the train to get to work.
        Cleveland is finally replacing railcars that date back to the
    Reagan administration. Akron Metro is getting a new maintenance
    facility. Ohioans in Bryan will have a new Amtrak station.
        It's why we came together to crack down on traffickers of deadly
    fentanyl, which is devastating working people and their communities in
    Ohio and all over the country. Our law is going after the entire
    fentanyl supply chain--from the chemical suppliers in China, to the
    cartels that traffic the drug from Mexico.
        It's why we confirmed dedicated, talented public servants who
    reflect the vibrant diversity of our country and who serve the public,
    not the financial industry.
        And it's why we stood up to corporate special interests--whether
    it's the big banks or the payday lenders or the shady debt collectors.
        We had the first ever legislative win against the payday lending
    lobby, protecting people from exorbitant interest rates that trap
    Americans in a cycle of debt.
        We successfully pushed to remove medical debt from people's credit
    reports, saving them money and protecting them from higher interest
    rates.
        Again and again, we stopped all the corporate interests that tried
    to prevent the Consumer Financial Protection Bureau from protecting the
    public.
        And we began calling the CEOs of the country's largest Wall Street
    banks to testify before this Committee and before the American people.
    These CEOs and their banks hold tremendous power over our economy and
    over people's lives.
        Too often, that power isn't used wisely.
        As important and effective as Wall Street reform was, it was
    incomplete. We still have an economy where hard work doesn't pay off
    like it should.
        For decades, Wall Street has rewarded the companies that squeeze
    their workers the hardest.
        When companies raise prices, when they lay people off, when they
    move jobs overseas, when they bust unions, when they subcontract work
    to lower-paying companies with fewer benefits, Wall Street analysts
    yell ``buy . . . buy . . . buy.''
        And look at the result:
        For almost a half century now, productivity has gone up, the stock
    market has soared, executive compensation has exploded.but workers'
    wages are largely flat.
        It hasn't always been like this.
        When I was growing up, the CEO-to-worker pay ratio was 20-to-1.
    That was still good money.
        Today, that ratio is 344-to-1.
        When the economy fundamentally does not reward work, while Wall
    Street continues to rake in profits--not just instead of workers, but
    at the expense of workers--our work is far from over.
        And some of the most crucial work happening today to hold corporate
    special interests accountable, and level the playing field for the rest
    of America, is at the Consumer Financial Protection Bureau.
        The consumer protection bureau has been among the most successful
    parts of Wall Street reform.
        Since 2011, the CFPB has returned nearly $21 billion to more than
    205 million Americans.
        These are real checks that land in people's mailboxes. Dollars that
    might mean a little extra breathing room to buy groceries or fill up a
    tank of gas.
        The CFPB has returned more than $363 million to servicemembers and
    veterans.
        That's money that companies took straight from servicemembers' and
    veterans' pockets.
        And over the next 4 years, the work of the Consumer Financial
    Protection Bureau will be more crucial than ever.
        The last time the President Trump was in office, the cabinet looked
    like a Goldman Sachs retreat. He tried to put the CFPB to work for
    corporations instead of the public.
        And from what we have seen from his nominees thus far, corporate
    special interests won't just have a seat at the table this time
    around--they'll be given free rein to rip off workers and customers.
        He's opening up our Government to the highest corporate bidder.
        It will be up to all of you in this room to preserve the CFPB as
    the one place where ordinary Americans can go that will fight for them.
        Most people don't have fancy lawyers. They don't have high-priced
    lobbyists. The CFPB is their advocate and their voice. The public
    servants there fight for the people who make this country work--and so
    must we.
        This Committee must ready itself for the fights and challenges
    ahead:
        Rising housing costs, private equity infiltrating more and more of
    our economy, insurance costs going up, risks building up in the private
    credit market, new technology that's increasingly being used in our
    financial system--from algorithmic prices to AI to crypto.
        All these risks have one thing in common: they all have the
    potential take even money away from working Americans . . . and funnel
    it to the same corporate elite that always seem to come out ahead.
        Those guys have enough advocates in this town. Our charge, whether
    in the Senate or out of it, is to look out for workers and put them at
    the center of everything we do.
        I'm proud of the work we've done together on this Committee.
        I want to thank Senator Scott, Senator Crapo, with whom I also
    worked closely and successfully as Ranking Member, and all the members
    of this Committee.
        I want to thank my talented Committee staff . . . Homer, Beth,
    Phil, Megan, Elisha and Laura have been with me the entire 10 years I
    have been Chair or Ranking Member. And Sarah, Jeremy, and Katie in my
    personal office have also worked for this Committee over the last
    decade.
        Jeff, Ann, Sunny, John, Mohammad, Shannon, Emily, Ben, Min, Erika,
    Jonathan, Shanna, Will, Serena, and Sean have made significant
    contributions during their time on this staff. I also want to thank the
    nondesignated staff--Pat, Lena, Shelvin Simmons, Jason Parker and
    Sheryl Arrington--led by Cameron Ricker--for making this Committee run.
        I trust Senator Warren to carry on our mission of standing up for
    working Americans, and standing up to all the corporate interests that
    hold far too much influence in this town--and are about to hold a lot
    more.
        The work continues.
                                     ______

                    PREPARED STATEMENT OF SENATOR TIM SCOTT
        Thank you, Mr. Chairman.
        Thank you for your service on this Committee since 2007 and the
    last several years as the Chairman of the Committee. I'll say the
    cancellation of today's markup really is disappointing and frankly
    sours the tone. It is another example of the dysfunction and lack of
    transparency that is a last gasp of a lame-duck Administration.
        But now, we turn our attention to the Director of the CFPB, who
    also doesn't seem to accept the results of the November election.
        As I mentioned earlier, after the November election--a historic win
    for Republicans and President Trump which delivered a mandate for this
    Committee and for this Congress. I sent a letter to each and every
    Federal agency under this Committee's jurisdiction calling on them to
    cease all rulemaking activities.
        It is paramount that President Trump can begin his Administration
    on January 20th with a fresh slate to implement the economic agenda
    that the American people resoundingly voted for.
        And this is not unreasonable. Last month the prudential
    regulators--the OCC, FDIC, NCUA, and Federal Reserve--agreed with me
    and committed to pausing rulemaking before the inauguration.
        Yet, as we have seen time and time again with Director Chopra, he
    has ignored these calls and pressed forward with a unilateral partisan
    agenda.
        Many of you have heard my Republican colleagues and I argue that
    the changes at the CFPB are absolutely necessary, that the agency is
    unaccountable to Congress.
        And Director Chopra seems intent on proving this to be true.
        Despite voter's clear message on election day, Director Chopra has
    advanced his agenda at a break-neck speed.
        He has issued a final rule expanding the CFPB's own jurisdiction,
    issued a proposal seeking to upend the fraud prevention industry, has
    published multiple ``studies'' and ``reports'' to further his political
    agenda, and just this week published another rulemaking effort.
        The Director has spent years at the CFPB pushing the Biden-Harris
    administration's partisan messaging on ``junk fees,'' and seeking a
    boogeyman around every corner for the failed economic policies of the
    Biden administration.
        Let me be clear: protecting consumers and building an economy that
    serves all Americans are principles that guide my work in the Senate,
    but we can do both without weaponizing our Federal regulators.
        Speaking of regulators abusing their authority, the longstanding
    issue of debanking and Operation Chokepoint have recently resurfaced.
        I have focused on this issue for years and the patent inequality it
    represents for our legal businesses.
        I have consistently called out our banking agencies for weaponizing
    their power, and private institutions for bending to the powerful here
    in Washington.
        No legal business should ever be debanked.
        This message is something that Director Chopra has latched onto
    since the election, including direct references to debanking in his
    last two rulemakings.
        But make no mistake, the Director is not our ally in this fight,
    and the career bureaucrats at the CFPB are not either.
        The Director's recent actions are little more than an attempt to
    expand the CFPB's jurisdiction and grant the agency more authority to
    pick winners and losers in the financial services system.
        Unelected bureaucrats in Washington, DC, should not be deciding
    which businesses survive or fail based on their political agendas. All
    legal businesses should have the opportunity to succeed in America,
    just like every single American.
        Washington should be focused on promoting the two greatest tools
    which can arm all Americans--choice and opportunity.
        These were the tools that allowed me as a poor kid in South
    Carolina to grow up and own my own business, and now, lead the
    Republican side of the Senate Banking Committee.
        America must continue to be the bedrock of opportunity, and our
    regulators must work to ensure this every single day. Regulation should
    provide guardrails, not roadblocks.
        I look forward to working with the next Director of the CFPB to
    increase accountability at the Bureau.
        And Director Chopra, I look forward to hearing that you will be
    resigning effective January 20th.
        It is unacceptable to have an agency with a budget of almost a
    billion dollars outside of the appropriations process and we must find
    a way to address this issue.
        I will end with this--a message of hope. I am hopeful that next
    Congress will allow this Committee to return to regular order and pass
    legislation to increase opportunity for American families and small
    businesses across the country.
                                     ______

                       PREPARED STATEMENT OF ROHIT CHOPRA
                 Director, Consumer Financial Protection Bureau
                               December 11, 2024
        Chair Brown, Ranking Member Scott, and Members of the Committee,
    thank you for inviting me to this hearing.
    ---------------------------------------------------------------------------
         Statement Required by 12 U.S.C. 5492; The views expressed herein
    are those of the Director and do not necessarily reflect the views of
    the Board of Governors of the Federal Reserve System or the President.
    ---------------------------------------------------------------------------
        This is my 27th time testifying before Congress as an Executive
    branch official, and my tenth time before this Committee. In my
    meetings with each of you, I continue to find more and more areas of
    agreement on tackling concerns that Americans are facing. I want to
    touch on a few of these.
    Credit Card Debt
        First, credit card debt. Americans owe roughly $1.2 trillion in
    credit card debt, and in 2022 alone, consumers paid $130 billion in
    interest and fees. The Consumer Financial Protection Bureau's (CFPB's)
    research has revealed that the credit card market is quite
    concentrated, with a few big players dominating the market. These large
    players have been able to push up interest rate margins considerably,
    even when adjusting for broader changes in market interest rates. This
    increase in interest rate margins and lack of robust competition means
    that Americans are losing $25 billion a year compared to 10 years ago.
    Many borrowers are paying over 30 percent, squeezing their monthly
    budgets. Further consolidation among big players, including one pending
    credit card merger, threatens to jack up rates even further.
        The CFPB is taking action to crack down on credit card companies
    exploiting loopholes, to make it easier to switch to a new company, to
    ensure consumers can obtain and redeem promised rewards, and more.
        But, many in Congress are rightfully concerned that the market will
    not correct on its own. There is growing bipartisan support for taking
    action. In particular, there are proposals to limit annual percentage
    rates on credit cards on both sides of the aisle, and the incoming
    Administration has expressed support for an interest rate cap. It will
    be important for this Committee to ensure that credit cards are a
    source of credit priced at competitive rates, rather than what we see
    in today's market.
    Digital Surveillance
        Second, digital surveillance and data privacy. Americans are being
    exposed every day to stalkers, scammers, and spies due to unchecked
    digital surveillance across the economy, including in the financial
    services sector. There is growing bipartisan consensus that
    policymakers need to do something about corporate data surveillance and
    data privacy, and it is critical that this work moves forward.
        The CFPB recently proposed a rule on data brokers that would curb
    access to sensitive financial data by foreign adversaries and others
    seeking to exploit Americans by spying on their personal information.
    We have also incorporated privacy and data security provisions into the
    CFPB's open banking rule, which will foster innovation and account
    switching while also protecting consumers' private financial
    information. At the same time, it is critical that Congress also act to
    protect against unchecked surveillance of the most sensitive personal
    data.
    Debanking
        Third, account closures and debanking. America's banking and
    payments systems serve as essential infrastructure for our economy and
    society. An account with a bank, credit union, or digital wallet
    provider is a necessity. Unfortunately, we have seen too many account
    closures on questionable grounds.
        Over the last few years, the CFPB has been working to ensure that
    banks and Big Tech firms are not inappropriately denying households
    access to banking and payment systems. We are especially concerned when
    funds are frozen or when accounts are closed for reasons not
    contemplated by Federal banking laws. We are currently engaged in
    litigation to defend the agency's authority to investigate when
    companies unfairly debank customers based on characteristics like
    religious affiliation.
        In addition, the CFPB recently finalized a rule to more closely
    examine digital payment apps to ensure that they comply with Federal
    laws, where there has been significant concern about debanking. The
    CFPB has also proposed a rule that would help to reduce account
    closures driven by overdraft churning. We have also proposed to update
    rules under the Fair Credit Reporting Act that will make sure that
    inaccurate identity verification algorithms are not leading to improper
    debanking. And we are scrutinizing whether reputation-based algorithms
    and artificial intelligence are being weaponized in ways that block
    people from account access. While the CFPB will continue to defend
    consumers' rights and to hold financial institutions accountable, it
    will be critical for Congress to ensure that all American families have
    access to an account.
        Thank you, and I look forward to your questions.
            RESPONSES TO WRITTEN QUESTIONS OF SENATOR SCOTT
                           FROM ROHIT CHOPRA

    Q.1. When you testified before the Committee in June, I asked
    you to provide the total number of Civil Investigative Demands
    (CIDs) issued by the CFPB during your tenure as Director. At
    that hearing, you indicated that you did not have the exact
    number, and I subsequently submitted the same question to you
    for the record. Your response to that question also did not
    provide the total number. Can you explain why you refuse to
    disclose the aggregate number of CIDs?

    A.1. Consistent with practices across law enforcement agencies,
    the Consumer Financial Protection Bureau (CFPB) does not
    provide lists or publish statistics on the number of civil
    investigative demands (CIDs), given law enforcement
    sensitivities and the fact that the number of CIDs issued may
    not correlate with the number of investigations or even the
    quantity of information sought. At the same time, I have asked
    our staff to answer any questions you might have about the
    process for issuing CIDs.
        Congress directs the CFPB to enforce a substantial set of
    laws for a wide range of market participants. As part of this
    authority, the Consumer Financial Protection Act of 2010
    authorizes the CFPB to issue investigational subpoenas when
    looking into potential violations of law. A CID may demand,
    among other things, documents, emails, reports, answers to
    written questions, and oral testimony on the record through
    investigational hearings. These CIDs are often issued to third
    parties that may have information relevant to an investigation.
    In some instances, cooperating entities have requested the CFPB
    issue a CID before providing information to the CFPB.
        In these information requests, the CFPB seeks to describe
    the types of information that may be needed to assess whether a
    law violation has occurred. Importantly, CFPB procedures
    provide for a process where recipients can work with the CFPB
    on ways to reduce the resource requirements for providing this
    information.
        The CFPB approaches this process in a way that seeks to
    balance the interests of obtaining evidence for a law
    enforcement investigation with the limitations and constraints
    faced by the recipient. Recipients also have a statutory right
    to appeal to the Director. We would be happy to meet with you
    to discuss this further.

    Q.2. Included in the CFPB's final rule entitled, ``Overdraft
    Lending: Very Large Financial Institutions'', the agency
    states, ``To the extent that changes to the regulatory
    framework would result in a reduction in overdraft revenue,
    smaller financial institutions may have greater difficulty in
    absorbing a reduction in overdraft revenue without it having
    some impact on their operations, and this impact could
    negatively affect consumers at smaller financial
    institutions.'' In the accompanying press release to the rule,
    you stated, ``The CFPB is cracking down on these excessive junk
    fees . . . ''.
        Can you explain why you consider overdraft fees to be
    ``junk fees'' when charged by banks over $10 billion, but not
    by banks under $10 billion?

    A.2. Although there has been some overall decline in the
    charging of overdraft fees, a sizeable majority of banks and
    credit unions with over $10 billion in assets (i.e., 68
    percent) continue to charge between $30 and $37 per transaction
    incurring an overdraft fee, and more than half charge $35.
        Even with these changes, consumers still paid more than
    $5.8 billion in 2023 in reported overdraft and NSF fees. The
    CFPB has continued to order many large institutions to return
    illegal overdraft fees to consumers. The CFPB recently brought
    a $95 million enforcement action against Navy Federal Credit
    Union for illegal surprise overdraft fees. The CFPB also took
    action against Wells Fargo, Regions Bank, and Atlantic Union
    for illegal overdraft fees, which resulted in refunds to
    consumers totaling $205 million, $141 million, and $5 million
    in unlawful fees, respectively.
        The CFPB took action to update an outdated overdraft
    exception that exempted many overdraft loans from lending laws.
    The agency's final rule on overdraft fees applies to the banks
    and credit unions with more than $10 billion in assets that
    dominate the U.S. market.
        In the final rule, the CFPB notes its plans to monitor the
    market's response to this rule before determining whether to
    alter the regulatory framework for financial institutions with
    assets less than or equal to $10 billion.

    Q.3. Did the CFPB conduct any analysis on whether this rule
    will influence banks over $10 billion to limit consumers'
    access to overdraft services?

    A.3. Yes. The final rule contains extensive cost-benefit
    analysis, which discusses the rule's impact on both consumers
    and covered institutions.

    Q.4. During the hearing, I asked you why you have refused to
    cease all rulemaking activities since the election, to which
    you responded that you believe the CFPB needs to continue the
    mission of consumer protection at all times. I agree that our
    consumer protection laws need to be enforced at all times, but
    that does not mean you should be deciding new ones on your way
    out the door. Clearly, you are engaged in continued political
    exercises, as exemplified by the seemingly coordinated social
    media post by the outgoing President on your recent overdraft
    fee rule. \1\ The safety and soundness of our banking system is
    also critical to monitor at all times, yet the prudential
    agencies agreed not to move forward with major rulemakings
    until after the inauguration.
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        Do you believe that the CFPB is in some way different than
    the prudential agencies?

    A.4. The CFPB is the primary Federal regulator charged with
    implementing and enforcing Federal consumer financial law and
    ensuring that markets for consumer financial products are fair,
    transparent, and competitive.
        The CFPB has primary enforcement and exclusive supervisory
    authority over very large banks (defined as insured depository
    institutions or credit unions with total assets of more than
    $10 billion) with respect to Federal consumer financial laws.
    The CFPB has exclusive supervisory authority over the following
    nonbanks with respect to Federal consumer financial laws:
    Nonbanks in the mortgage, private educational lending, and
    payday lending markets, and larger participants in the consumer
    reporting, consumer debt collection, student loan servicing,
    international money transfer, automobile financing, and
    general-use digital consumer payment applications markets.
        The CFPB continues to work to implement the law and ensure
    that consumers are protected and treated fairly as they use and
    engage with consumer financial products and services such as
    bank accounts, credit reports, digital wallets and payment
    apps, as well as mortgages, auto loans and credit cards. The
    CFPB has prioritized the implementation of Congressional
    statutory directives.
        Recent actions the CFPB has taken include issuing a final
    rule to protect homeowners on solar panel loans and other home
    improvement loans paid back through property taxes, as directed
    by the ``Economic Growth Regulatory Relief and Consumer
    Protection Act of 2018''; finalizing a rule to supervise the
    largest digital funds transfer and payment wallet apps to
    ensure these companies are following the law, just like large
    banks, credit unions and other financial institutions already
    supervised by the CFPB; proposing a rule to stop data brokers
    from selling sensitive personal data to scammers, stalkers and
    spies to address significant national security and surveillance
    risks; and approving an application from the Financial Data
    Exchange to issues standards for open banking, an important
    action to further implement the Congressional directive related
    to Section 1033 of the Consumer Financial Protection Act; and
    proposing a rule to address the harmful effects of inaccurate
    credit reporting affecting survivors of domestic violence,
    elder abuse, and other forms of financial abuse.

    Q.5. Do you believe that consumer protection laws are more
    important than safety and soundness laws?

    A.5. Both consumer protection and safety and soundness laws are
    important.

    Q.6. In your written responses to my Questions for the Record
    in connection with your testimony before the Committee on June
    12, 2024, you stated, ``Medical debt on a consumer credit
    report is a very different type of debt than a mortgage, an
    auto loan, or a credit card. Sometimes, as is the case with a
    visit to the emergency room, the debt is taken on unexpectedly
    and in a time of crisis.''
        While I do not disagree that medical debt is often taken on
    unexpectedly and in a time of crisis, can you explain why your
    proposal includes non-emergency, elective medical procedures?

    A.6. The CFPB received a number of comments regarding this
    issue. As stated in the final rule, available data implies that
    a substantial fraction of medical debt results from unplanned
    expenditures. The CFPB did not state in its proposal or mean to
    imply that all medical debt is the result of sudden events.
        As noted in the final rule, elective care is inclusive of
    necessary health care for unanticipated health conditions. Many
    of the same issues limiting the informational value of
    information about nonelective care applies to medical debt
    information about elective care.

    Q.7. On December 3, the CFPB issued a new proposal under the
    FCRA to limit the sale of consumer data. I agree that we must
    do more to protect consumer's privacy and data, yet, once again
    the CFPB has gone about this is in all the wrong ways.
        Did the CFPB conduct any analysis on the impact this
    proposal would have on identity verification?

    A.7. The intent of the FCRA rulemaking is to protect consumers
    from the collection and sale of their personal data in
    violation of the Fair Credit Reporting Act, including for
    malicious purposes like identity theft, harassment, and fraud,
    and use by foreign State and non-State actors.
        The proposed rule addresses the ability of entities to use
    consumer reports for identity verification purposes. The CFPB
    takes seriously the need for financial institutions to be able
    to prevent identity theft, fraud, and money laundering and does
    not intend to issue a rule that will prevent financial
    institutions from meeting the requirements of the Bank Secrecy
    Act.

    Q.8. In January 2024, I introduced S. 3592, the Business of
    Insurance Regulatory Reform Act. This bipartisan bill
    rightfully asserts that State insurance regulators have
    regulatory authority over entities engaged in the business of
    insurance, not the Consumer Financial Protection Bureau (CFPB).
    The bill clarifies that if entities engaged in the business of
    insurance offer products or services that are otherwise subject
    to consumer financial protection laws, the CFPB has strictly
    limited authority. We must protect our State-based system of
    insurance regulation, which has successfully resulted in
    competitive, fair markets to the benefit of insurers and
    consumers, from bureaucrats in Washington like those at the
    CFPB.
        Please explain why you feel that the CFPB should step
    outside its congressionally authorized regulatory authority and
    encroach upon our State-based regulatory system of insurance?

    A.8. The CFPB is not seeking to regulate the business of
    insurance.

    Q.9. On November 21, the CFPB issued a final rule to define
    larger participants of a market for general-use digital
    consumer payment applications. Yet, on December 6, the CFPB
    designated Google Payment Corp. for supervision under separate
    authority, based in part on the firms' previous offerings of
    digital consumer payments applications.
        Why did the CFPB conduct the Larger Participants Rulemaking
    if it has the authority to individually designate firms for the
    same reason?

    A.9. You are correct, the CFPB published an order establishing
    supervisory authority over Google Payment Corp. While Google
    Payment Corp. is already subject to CFPB's enforcement
    authority, the CFPB determined that Google Payment Corp. met
    the legal requirements for supervision under a legal provision
    authorizing the examination of nonbank financial companies that
    pose risks to consumers.
        The Larger Participant Final Rule implements the CFPB's
    authority to supervise larger nonbank companies that offer
    ``general-use digital consumer payment applications'' such as
    digital wallets, payment apps and peer-to-peer payment apps. A
    nonbank covered person qualifies as a larger participant if it
    (1) facilitates an annual covered consumer payment transaction
    volume of at least 50 million transactions as defined in the
    rule; and (2) is not a small business concern. All larger
    participants that meet the qualifications will be subject to
    the CFPB's supervisory authority under the Consumer Financial
    Protection Act.
        This final rule will help level the playing field between
    banks and nonbank tech companies and help ensure that they
    follow the law.
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