Rohit Chopra has been removed from his position as the director of the Consumer Financial Protection Bureau (CFPB) by the Trump administration. This decision was anticipated, as it is widely expected that a new leader will be appointed to head the agency, which has come under consistent scrutiny from Republican lawmakers.
Chopra was originally appointed by former President Joe Biden to lead the CFPB in 2021. Although the director’s term spans five years, a Supreme Court ruling in 2020 affirmed the president’s authority to terminate the director at any time.
In a resignation letter shared publicly, Chopra emphasized the crucial role of watchdog agencies like the CFPB in upholding regulations to mitigate the significant influence that large corporations wield over individuals’ financial experiences.
During his tenure, Chopra was known for taking strong action against major financial institutions. Notably, in December, the agency filed lawsuits against Zelle’s operator and leading banks such as Bank of America, JPMorgan Chase, and Wells Fargo for allegedly failing to safeguard consumers against widespread fraudulent practices.
The CFPB, established by the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010, is an independent agency funded directly by the Federal Reserve, bypassing the conventional congressional appropriations process. This agency was created in response to the financial turmoil that led to the 2008 economic crisis, aimed at preventing similar occurrences in the future.
In light of Chopra’s departure, consumer advocacy groups praised his leadership, noting, “Under Chopra, the CFPB has made significant strides in combatting hidden fees, corporate malfeasance, and fostering accountability.” Such efforts have promoted greater transparency and improved financial health for consumers.
While banks acknowledge the CFPB’s ongoing presence, they are advocating for reforms within the agency. The Consumer Bankers Association highlighted the need for prompt changes, including revisiting the CFPB’s regulations concerning overdraft and late credit card fees.
During a Senate Banking Committee hearing last December, Senator Tim Scott criticized Chopra’s tenure, urging for his resignation on the first day of Trump’s administration. He articulated concerns regarding the CFPB’s financial framework, calling for an agency with an operating budget nearing a billion dollars to align with the traditional appropriations process.
