CFPB Nominee Rohit Chopra on Payments, Big Tech, and China

Behavioral ads and consumer finance.

Back in January, I wrote a piece about anti-monopolist Federal Trade Commissioner Rohit Chopra, and how his regulatory approach to big tech and the broader economy could really restructure our social order in useful ways. I wanted him to be appointed chair of the FTC, but instead he was promoted to run the Consumer Financial Protection Bureau. That agency has substantial authority over Wall Street and payments.

Yesterday was Chopra’s nominating hearing in the Senate Banking Committee. He didn’t just go through the standard ‘we must protect consumers from financial predation’ but made a more sophisticated case for the bureau. He argued that behavioral advertising and big tech’s potential entrance into payments were both issues for the bureau, as is the protection of small business. He noted that China’s investment in digital currencies and faster payments is a challenge to America and the West. Most interestingly, he argued that protecting consumers isn’t just useful in and of itself, but “it also ensures that law-abiding businesses, regardless of size, can compete.” In other words, the goal is to reorient market structure, and punishing bad actors is an incidental part of doing so.

Republican Senators were generally skeptical, with the exception of Senator John Kennedy who wants the CFPB to fix credit reports for consumers (which is a big data issue). GOP skepticism towards Chopra is unwarranted. Republicans are inherently suspicious of anything CFPB-related because it was Elizabeth Warren’s creation, and because conservatives have broader skepticism of the administrative state. But based on his work at the FTC, it’s evident Chopra is going to be a useful regulator and he may address some of the problems with big tech and China that the new conservative movement is running into. When Mark Zuckerberg tries to create a Facebook currency, we’re not in Kansas anymore…

The only other notable Senator was Jon Ossoff, the young Georgia populist who asked about Too Big to Fail banks, antitrust, and dominant firms entering financial services. His question and answer session with Chopra is worth watching.