Chopra has been appointed to head the Consumer Financial Protection Bureau, Gensler to chair the Securities and Exchange Commission.
President-elect Joe Biden is set to appoint Rohit Chopra as director of the Consumer Financial Protection Bureau, bringing in a progressive ally of Democratic Senator Elizabeth Warren to lead the agency she championed creation.
Chopra, a commissioner at the Federal Trade Commission, helped launch the CFPB after the 2008 financial crisis and served as deputy director, where he sounded the alarm about skyrocketing student debt levels.
The choice comes as Democrats search for ways to provide student loan relief to millions of Americans as part of a COVID-19 relief program.
Biden announced the move on Monday, along with plans to appoint Gary Gensler, former chairman of the Commodity Futures Trading Commission, as the next chairman of the Securities and Exchange Commission.
Gensler, a former Goldman Sachs banker, has tightened CFTC oversight of the complex financial transactions that helped spark the Great Recession.
Biden’s choice of Gensler to lead the SEC signals a goal of turning the Wall Street watchdog into an activist role after deregulation under the Trump administration.
Now a professor of economics and management at MIT’s Sloan School of Management, Gensler served as Assistant Secretary of the Treasury in the Clinton administration and then headed the Commodities Futures Trading Commission during Barack Obama’s tenure.
After working nearly 20 years at Goldman Sachs, Wall Street’s powerhouse, Gensler surprised many by being a tough regulator of big banks as chairman of the CFTC.
Well-versed in the connection between politics and economic policy, Gensler was CFO of Hillary Clinton’s 2016 presidential campaign against Donald Trump and economic advisor to Barack Obama during his 2008 presidential bid.
Gensler was the leader and advisor to Biden’s transition team responsible for the Federal Reserve, banking matters and securities regulation.
Gensler is replacing Jay Clayton, a former Wall Street lawyer who ran the SEC under the Trump administration. When he took office, Trump had pledged to ease the rules affecting Wall Street and financial markets, and Clayton presided over a surge of deregulation.
The rules were relaxed as part of the landmark Dodd-Frank Wall Street reform law of 2010 which tightened the reins of banks and investment firms following the 2008-09 financial crisis and the Great Recession .
The CFPB was created at Warren’s request as an independent agency by the Dodd-Frank Act. Its director had great latitude to act alone, without obtaining the agreement of the members of the board of directors of an agency.
While enforcing consumer protection laws, the CFPB also gained the power to review the practices of virtually all businesses selling financial products and services: credit card companies, payday lenders, mortgage managers, debt collectors, for-profit colleges, auto and money lenders. transfer agents.
Chopra was deputy to its first director, Richard Cordray, as the agency took enforcement action against a range of businesses, large and small, and returned tens of billions of dollars to consumers harmed by illegal practices.
The CFPB has become the target of conservative Republicans. President Donald Trump appointed Mick Mulvaney, then White House budget director, as interim CFPB director when Cordray left in November 2017.
Mulvaney had sharply criticized the consumer protection agency and made sweeping changes to it, relaxing payday lending regulations and undoing enforcement efforts. The agency has been headed by Trump-appointed Kathy Kraninger since December 2018.
As one of the two Democratic commissioners of the five-member Federal Trade Commission, Chopra has openly criticized the practices of large corporations, especially tech giant Facebook.
He expressed strong dissent over the FTC’s actions against the company for breach of privacy and alleged anti-competitive behavior, saying they did not go far enough.