From Watchdog to Attack Dog: Examining the CFPB’s Chopra-era Assault on Disfavored Industries

House Financial Services Subcommittee on Oversight and Investigations

2025-06-26

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Source: Congress.gov

Summary

The Subcommittee on Oversight and Investigations convened to discuss the Consumer Financial Protection Bureau (CFPB), focusing on its conduct under former Director Rohit Chopra and its current state under the Trump administration, sparking a highly partisan debate among members of Congress and witnesses.[ 00:24:02 ]

Allegations of CFPB Overreach and Abuse Under Director Chopra

Several speakers criticized the CFPB under Director Chopra, accusing it of exceeding its authority and acting as an "attack dog" rather than a nonpartisan "watchdog" for consumers.[ 00:24:02 ] Specific concerns included the aggressive use of Civil Investigative Demands (CIDs), which were described as powerful legal tools used to intimidate businesses, especially small ones, and bury them in compliance costs without proven wrongdoing.[ 00:25:25-00:25:51 ]

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 Witnesses argued that the CFPB weaponized its authority, denied all petitions against CIDs, and made the investigation process a punishment in itself, leading to layoffs, customer loss, and business closures.[ 00:25:59 ]

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 Examples were given of the CFPB allegedly targeting entire sectors based on ideological disfavor, inventing new rules through enforcement actions rather than proper rulemaking, and encroaching on the jurisdiction of other federal and state regulators. This approach was seen as an abandonment of the CFPB's core mission to protect consumers through even-handed enforcement of clear rules.[ 00:24:59 ]

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Detrimental Impact on Businesses

Ms. Jennifer Bassett, CEO of a small women-owned financial services company, testified about her firsthand experience with the CFPB's enforcement actions under Director Chopra. She stated that her company was targeted without any specific allegations or consumer complaints, leading to the closure of 35% of her locations, layoffs for a third of her staff, and legal fees approaching half a million dollars due to burdensome CIDs. Bassett described the process as an "intimidation campaign" against her industry, a "fishing expedition" with no clear purpose, and noted that petitions for relief were denied by the same agency that issued the demands, highlighting a lack of neutral arbitration. This regulatory overreach was believed to cause significant reputational damage and business disruption, with the costs ultimately being passed on to consumers.[ 00:53:33 ]

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Defense of CFPB's Consumer Protection Mission

Other speakers strongly defended the CFPB's role and actions, particularly under Director Chopra, emphasizing its critical mission to protect American consumers and ensure market fairness. They highlighted the agency's success in returning $21 billion to over 200 million Americans and imposing over $6 billion in fines on lawbreakers, demonstrating its effectiveness as a regulator. The CFPB was credited with cracking down on illegal conduct by financial institutions, addressing issues like medical debt, junk fees, and holding companies accountable for deceptive practices, which were described as nonpartisan efforts beneficial to all consumers. These speakers argued that the CFPB acts as a necessary "watchdog" to prevent corporate lawlessness and protect vulnerable populations, such as students and older Americans, from scams and financial exploitation.[ 00:50:30 ]

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Politicization and Weakening of the CFPB Under the Current Administration

Democratic speakers accused the Trump administration's CFPB, under Acting Director Russell Vogt, of abandoning consumers and systematically undermining the agency's enforcement functions. Allegations included dismissing or withdrawing more than half of pending cases, rescinding settlements with companies like Toyota, and reducing the agency's workforce by 90%, all seemingly to benefit corporate donors to the President's inauguration fund. This was framed as a deliberate effort to turn the CFPB from a "watchdog" into a "lapdog" for corporations, thereby exposing consumers to increased financial risks and lawlessness. Concerns were raised about the lack of accountability, with the acting director failing to appear before the committee as required by law, further highlighting the administration's disregard for consumer protection.

Calls for Reform and Oversight

There were calls for both past and future reforms regarding the CFPB's operation. Critics of Director Chopra's tenure advocated for meaningful reforms to the Civil Investigative Demand (CID) process, suggesting that CIDs should require judicial oversight to ensure reasonableness and probable cause, thereby protecting businesses from undue burdens. They also emphasized the need for the CFPB to adhere strictly to the Administrative Procedure Act (APA) for rulemaking, avoiding the creation of new compliance requirements through enforcement actions or informal guidance. Conversely, proponents of the CFPB's mission urged Congress to ensure the current administration resumes robust enforcement, arguing that weakening the agency could lead to another financial crisis and noting that existing regulations and other agencies are insufficient to protect consumers adequately.

Tone of the Meeting

The tone of the meeting was highly contentious and deeply partisan, marked by sharp disagreements and mutual accusations between members of Congress from opposing parties.[ 00:24:02-00:24:39 ] Republican members and some witnesses expressed strong disapproval of the CFPB's conduct under Director Chopra, using terms like "attack dog," "tyrannical crusade," and "rogue agency."[ 00:24:02 ] Democrats, conversely, vigorously defended the CFPB's pro-consumer actions and accused the current administration of actively dismantling the agency to favor corporate interests. The exchanges frequently involved heated rhetoric, accusations of political motivations, and emotional appeals regarding the impact on businesses and consumers. This reflected a profound ideological divide on the role and oversight of financial regulation.

Participants

Transcript

Well, good morning.  The Subcommittee on Oversight and Investigations will come to order.  Without objection, the chair is authorized to declare a recess of the committee at any time.  This hearing is entitled From Watchdog to Attack Dog, examining the CFPB's Chopra-era assault on disfavored industries.  Without objection, all members will have five legislative days within which to submit extraneous materials to the chair for inclusion in the record.   I now recognize myself for five minutes to give an opening statement.  Today's hearing is tiled from watchdog to attack dog.  Examining the CFPB's Chopra, one may describe as assault on disfavored industries.  I would like to take a moment to thank the witnesses for being here to discuss the actions of the CFPB under the leadership of former director Rohit Chopra.   The CFPB was created to be a nonpartisan watchdog, an agency tasked with protecting American consumers from deceptive, unfair, and abusive financial practices.  But under Director Chopra, that mission was largely abandoned.  The CFPB ceased to be a pro-consumer agency and instead became an ideological weapon used not to protect the public, but to pressure businesses into aligning with the CFPB's goals through aggressive rules, enforcement, and supervision.   Chopra targeted entire sectors he disfavored, wielding the agency's enforcement powers to intimidate and financially exhaust companies that didn't share his   Ideological progressive vision for the marketplace.  One of the most troubling examples of its overreach was the aggressive use of civil investigative demands, or CIDs.  CIDs are powerful legal tools that allow the CFPB to demand vast amounts of documents, data, and testimony, often with little to no justification or judicial oversight.  Under Chopra, the CFPB issued CIDs to effectively weaponize the agency's authority to bury small firms in compliance costs
and reputational damage before any wrongdoing was even proven.  While a business can petition a CID, the decision on any petition was ultimately at the discretion of the director, sending it back to the organization that issued it in the first place.  Unsurprisingly, Director Chopra denied 100% of the petitions that were received.   Under the first Trump administration, six petitions were granted to overturn CIDs.  For many businesses, especially small ones, the process of responding to a CID is a very challenging task, often leading to layoffs, loss of customers, and in many cases, closures.  One of our witnesses here today will explain just how devastating these CIDs were.  Under Chopra, the process became the punishment, the threat of a CFPB investigation   was less about compliance and more about survival, especially for smaller businesses.  This is not consumer protection.  It is a bureaucratic attempt at intimidation, and it has no place in a system governed by the rule of law.  So I applaud President Trump for ending this campaign of coercion at the CFPB.  Businesses operating legally should not have to fear their own government.   That's why today I've sent a letter to the CFPB's Acting Inspector General requesting a formal investigation into whether Director Chopra consistently exceeded his statutory lawful authority.  Congress must act to ensure that the CFPB cannot be weaponized again.  Under the Trump administration, legally operating ethical businesses no longer live in fear of the CFPB and their punishment.   Chopra's tenure has made one thing clear.  Congress must ensure the CFPB, or any agency for that matter, can ever again be weaponized for ideological purposes.  Of the countless banks and compliance officers, both large and small, that I've spoken to over the last two to three years, I have not heard from one that had anything positive to say about Director Chopra and the CFPB's work.
And I've met with former Director Chopra several times and told him about these concerns and it made no difference and the CFPB continued its crusade.  I look forward to hearing from the witnesses on how Congress can help the CFPB return to its core mission of protecting the American consumers from unfair and abusive practices.  Sadly, the one investigating the abuses became the abuser.   Now I want to recognize my friend and ranking member of the subcommittee, the gentleman from Texas, Mr. Green, for four minutes for an opening statement.  Thank you.
Thank you, Mr. Chairman, and I acknowledge you as a friend as well.  However, notwithstanding the fact that the title of this hearing is From Watchdog to Attackdog,   I believe that a better title for the hearing would be From Watchdog to Lapdog, and how Trump's CFPB has abandoned consumers in favor of corporations.  But it's not just the CFPB that's under attack, and we should not view these things in a silo, because if we do, we'll miss the big picture.  Federal agencies are under attack.   We are currently defunding the Department of Education, defunding HHS, defunding the FEC, defunding HUD, defunding FEMA.  With all of these agencies under attack, we should understand that there's an effort afoot not only to defund the CFPB, which is, of course, being done, but also to literally remove from these agencies dollars, dollars,   so that these dollars can go to the pockets of the very wealthy in this country.  And it's not just from these agencies.   The very essence of a country is the ability for its citizens to have good health care.

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