Industry braces for Consumer Financial Protection Bureau 2.0

The Consumer Financial Protection Bureau (CFPB) has outlined its priorities in a staff memo, including consumers facing hardship due to Covid-19, and racial equity.

Why should we care?
The announcement offers clues as to how a Biden CFPB might oversee the industry, and the agency’s enforcement priorities. The CFPB has reportedly been putting resources into investigating consumer-finance abuse in areas such as lending, debt collection, student loan administration and how relief funds have been distributed. Rohit Chopra, the Biden administration’s nominee to be CFPB director, is still yet to be confirmed by the Senate. The agency is said to be exploring uses of technology – or an internal “fintech capability” – to aid its enforcement and monitoring efforts. The agency is also expected to look at how financial firms protect customer data. On mortgage and consumer lending, the CFPB will likely be keeping an eye on discrimination in mortgage and consumer lending, including the practice of mortgage “redlining.” Analysts say the industry will likely be interested in looking at business practices that cause racial disparities, including discriminatory algorithms.