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The Senate Banking Committee Tuesday heard from Rohit Chopra, President Joe Biden's nominee to lead the CFPB, and his priorities for the bureau should he be confirmed. Chopra discussed the financial impact the coronavirus pandemic is having on consumers and flagged home foreclosures, loan defaults, and errors in credit reporting as some of the issues he's watching.

The committee also heard from Gary Gensler, who's nominated to serve on the Securities and Exchange Commission, during Tuesday's hearing.

During the hearing, Ranking Member Pat Toomey, R-Pa., and Sen. Steve Daines, R-Mont., raised concerns with the bureau's single-director structure and lack of congressional oversight as the bureau is not subject to the appropriations process. NAFCU has long advocated that the bureau's leadership structure should be reformed to a commission-based model to ensure transparency and stability, and has also offered support for bringing it under the congressional appropriations process.

Last year, the Supreme Court found that the bureau's "leadership by a single individual removable only for inefficiency, neglect, or malfeasance violates the separation of powers."

In addition, lawmakers raised several other issues that impact credit unions, including:

• Regulation by enforcement: NAFCU has consistently called for clear regulations from financial institution regulators and cautioned against "regulation by enforcement." Earlier this year, the federal regulators finalized an interagency rule that codifies a statement to clarify the differences between regulations and supervisory guidance. Chopra stated his intent to ensure there are clear rules of the road.
• Small-dollar lending: Chopra acknowledged the importance of short-term, small-dollar loans offered by financial institutions. The CFPB last year finalized its small dollar lending rule, which included some NAFCU-sought provisions but did not extend the safe harbor for credit unions' payday alternative loans (PALs). Financial regulators have also encouraged financial institutions to provide safe small-dollar lending options amid the coronavirus pandemic.
• Military lending: CFPB Acting Director Dave Uejio last month said the bureau will begin supervising lenders related to the Military Lending Act; previous CFPB Director Kathy Kraninger had asked Congress for explicit authority on the issue. Chopra said the bureau has the data to review previous abuses and take action as needed.
• UDAAP: The CFPB last year released a policy statement clarifying the "abusive" prong of the unfair, deceptive, or abusive acts and practices (UDAAP) provision. NAFCU has long urged the bureau to offer clarity, including specific guidance on prohibited practices, and recently included the issue on its list of priorities for the bureau. During the hearing, Chopra acknowledged the importance of clear guidance on the issue.
• Housing market: The CFPB earlier this week released a report on housing insecurity, which found that nearly 10 percent of U.S. households could face eviction and foreclosure when COVID-related relief provisions expire in the coming months. Chopra told lawmakers the bureau will work to protect consumers and not repeat mistakes leading up to the 2008 housing crisis, and clarified the bureau does not have a role in dictating housing finance policy.
• Level playing field: Ensuring a level playing field and proper oversight within the financial services market is a priority for NAFCU. Chopra agreed with this sentiment during the hearing as lawmakers asked him about fintechs, ILC applications, and uneven subsidization between large banks and credit unions and other community financial institutions.

NAFCU works closely with the bureau to ensure credit unions' concerns are considered in its regulatory efforts.