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Opening Statement of Director Rohit Chopra before the Senate Committee on Banking, Housing, and Urban Affairs

Chairwoman Brown, Ranking Member Toomey, and Members of the Committee, thank you for holding this hearing today.

2021 is far different than 2020. The economy is reopening and growing. Labor demand is strong, and employers have added millions of new jobs. Household spending has rapidly increased, and demand for housing is robust. While these macro indicators are promising, the recovery has been uneven.

In many individual neighborhoods, conditions remain fragile. Many families continue to struggle to afford their mortgage and rent payments. Many small businesses are facing severe challenges to make ends meet. And, many communities, especially those that have been historically disadvantaged, have not felt much of a recovery.

American families owed $15 trillion as of the end of the second quarter of this year, roughly $800 billion more than at the end of 2019. Over the course of a year, mortgage origination hit historic highs at $4.6 trillion.

The CARES Act has kept delinquency rates on mortgages and student loans at low levels. However, many of the borrower forbearance programs have expired, so we lack a complete picture about distress. Many family farmers continue to confront significant challenges. Medical debt in collections continues to grow as a concern for many households.

Congress has tasked the CFPB with monitoring market conditions to spot risks and meet other statutory objectives.

Most importantly, the CFPB is carefully monitoring the mortgage market, including foreclosures. It is critical that families do not experience unnecessary hardship and that disruptions in the mortgage market do not impede the recovery. We are keen on understanding how homeowners from different segments of the population are faring, including communities of color, military-connected families, older Americans, first-time homeowners, and family farmers.

Technological progress holds the potential for enormous benefits to households and the economy, particularly with respect to real-time consumer payments. In recent years, Big Tech has sought to gain greater control over the flow of money in our economy.

Last week, the CFPB issued orders to dominant firms such as Facebook, Google, Apple, and Amazon to shed light on their payment systems. The orders seek information on how firms harvest, track, and monetize data about our spending habits. We are also seeking to understand the specific criteria that firms use to approve and to kick off payment system participants. We will also be studying some of the practices of Chinese tech giants, like WeChat Pay and AliPay. This effort will also inform other initiatives to ensure that our evolving payments landscape is in alignment with our national interest.

More broadly, the CFPB intends to use its tools to promote an equitable and inclusive recovery. Given existing economic conditions and these tools, I expect to have several areas of focus.

First, we must find ways to create more competition in these markets. For example, I am concerned that many Americans could be paying lower rates on their mortgages and credit cards, and earning higher rates on their savings. We plan to listen carefully to local financial institutions and nascent competitors on the obstacles they face when seeking to challenge dominant incumbents, including in Big Tech.

Second, the CFPB will sharpen its focus on repeat offenders. Repeat offenders that violate agency and court orders harm families and law-abiding businesses.

Third, we must work to restore relationship banking in an era of big data. Too many households and businesses have no place to turn to when they need help, especially when they face errors and problems in their financial lives. The inability to cut through red tape and get help in one’s financial life can be a major obstacle when seeking a job or when applying for credit. Preserving relationship banking is critical to our nation’s resilience and recovery, particularly in these times of stress.

Thank you for the opportunity to appear before you today, and I look forward to your questions.