Breaking News
Investing Pro 0
Free Webinar - Webinar: Simplify Options Trading | Thursday, September 28, 2023 | 08:00PM EDT Enroll Now

US consumer finance chief calls for better risk management at banks, fintechs

Published Mar 28, 2023 07:28PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. FILE PHOTO: U.S. President Joe Biden listens as Rohit Chopra, Director of the Consumer Financial Protection Bureau, speaks from an auditorium on the White House campus in Washington, U.S. October 26, 2022. REUTERS/Jonathan Ernst

By Nupur Anand and Tatiana Bautzer

(Reuters) - The recent failures of mid-size U.S. lenders show the need for more robust risk management at banks and fintechs, along with improved regulation, the head of the top consumer financial watchdog agency said on Tuesday.

Consumer Financial Protection Bureau Director Rohit Chopra told a gathering of retail bankers in Las Vegas that regulators were looking at liquidity, interest-rate risk management, capital frameworks, resolution planning and stress testing.

"It will be good for the industry to have some honest conversations with itself about what is the way for the regulatory framework to not create this type of risk," Chopra said.

As head of the CFPB, Chopra also sits on the board of the Federal Deposit Insurance Corporation, which took over failed Silicon Valley Bank earlier this month. He also serves on the Financial Stability Oversight Council, created in the wake of the 2008 crash.

"It was fast and furious," Chopra said of SVB's implosion. While the scramble by customers to move their funds has subsided, "there's no question it has been a dramatic movement of money," he said.

The fall of SVB is "a clear data point that $100 billion dollar banks can really cause a lot of systemic risk and ultimately contagion across the financial system," he said.

Lawmakers and lobbyists have sparred in recent days over who to blame for the collapse of Silicon Valley Bank. Some blame excessive risk-taking by bank leadership, a failure of regulatory supervision, or a 2018 rollback of key oversight provisions enacted as part of the 2010 Dodd-Frank Wall Street reform legislation.

Chopra, 41, is a protege of Democratic U.S. Senator Elizabeth Warren and a key figure in the Biden administration’s current class of progressive financial and economic regulators.

He is known for his deft policy messaging and firm calls for corporate accountability. In a three-year stint on the Federal Trade Commission, he established himself as an aggressive consumer advocate.

As member of the Democratic minority, he advocated for penalizing individual executives rather than simply collecting more fines.

U.S. President Joe Biden said on Tuesday he has done what is possible to address the banking crisis with available authorities but that it is "not over yet."

Chopra also told bankers he was concerned about the buildup of risk in so-called non-bank financial firms, such as fintechs or crypto companies, many of which are overseen by his agency.

"No one really believes that there is no non-bank that could offer the same type of contagion or same type of systemic effect," said Chopra. "A major disruption or failure of a large mortgage servicer, really gives me a nightmare."

Chopra's presence at the Consumer Bankers Association's annual confab was a rare opportunity for facetime with an industry where some attendees took umbrage with Chopra's style and public remarks, notably concerning the Biden administration's wider campaign against "junk fees."

Brian Johnson, a former CFPB during President Donald Trump's administration, told attendees that Chopra had been using the CFPB as a "bully pulpit" to drive change in industry behavior.

Chopra has tried to accelerate rule changes through public statements, as regulation changes and enforcement actions take longer to bring results, said Yolanda McGill, Zest AI vice president and former CFPB attorney.

Susan Seaman, a partner at Husch Blackwell LLP, clients were reaching out to review their fees. "People are taking proactive measures," she said. "Clients need to be ready to defend their policies."

US consumer finance chief calls for better risk management at banks, fintechs

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your profile, will be public on and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Mark Manley
Mark Manley Mar 28, 2023 7:56PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Chopra is the director of the CFPB, under whose watch this all happened, the lessons of history are clear - the person responsible for the disaster is rarely the one who can fix it
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email