President Donald Trump has fired Rohit Chopra, the director of the Consumer Financial Protection Bureau (CFPB), marking the latest removal of a Biden administration holdover.
Driving the news: As one of the more important regulators from the previous Democratic administration, Chopra was seen as instrumental in pursuing policies designed to make the financial system fairer and more competitive for consumers, such as removing medical debt from credit reports and implementing limits on overdraft penalties.
- During Trump’s first term, he appointed Chopra as a Democratic member of the Federal Trade Commission.
- Prior to his dismissal, Chopra had expressed the CFPB’s readiness to work with the new Trump administration, highlighting the agency’s efforts to develop rules preventing countries like Russia and China from using data brokers to surveil Americans and crafting policies to safeguard individuals’ access to banking services while expressing political or religious views.
The big picture: Tensions arose between Trump’s deregulation promises for businesses and his populist appeals to voters, and Chopra’s approach to consumer protection. Critics in the financial sector urged for Chopra’s removal, citing concerns about the potential ramifications of his policies on the pro-growth agenda.
The backstory: The Consumer Financial Protection Bureau was established after the 2008 financial crisis to regulate mortgages, car loans, and other consumer finance, and has faced opposition from Republicans and financial backers.
- Last year, the Supreme Court upheld the funding structure of the bureau, ruling that it does not violate the Constitution, as it is directly funded by the Federal Reserve, unlike most federal agencies that rely on the annual budget process in Congress.