CFPB delays last minute duplicative measure that could crush community banks

Since Trump’s election, the CFPB has proposed, issued and finalized five rules; between December 20 and January 6, the CFPB filed lawsuits against seven companies.

Rohit Chopra, who is both the director of the Consumer Financial Protection Bureau (CFPB) and a board member of the Federal Deposit Insurance Corporation (FDIC), is the latest Biden administration official to make a last-minute regulatory attempt to hamstring the incoming Trump administration and cause chaos in markets.

Chopra is acting in his capacity as an FDIC board member to plan to force BlackRock to reach a so-called passivity agreement with the FDIC, even though the giant asset manager already has a similar agreement with the Federal Reserve Board.

Chopra, who was one of Elizabeth Warren’s first hires when she helped start the CFPB, is also making last-ditch regulatory efforts via the CFPB to target companies like Walmart and Zelle as he heads out the door.

Since Trump’s election, the CFPB has proposed, issued and finalized five rules; between December 20 and January 6, the CFPB filed lawsuits against seven companies.

BlackRock, alongside both former regulators and financial industry experts, argue that Chopra’s latest move — an attempted January 10 deadline for BlackRock to reach the passivity agreement — is a power grab by the FDIC that could disrupt BlackRock’s ability to reduce capital available to small and regional banks.

While Chopra said he won’t resign at the end of the Biden administration, the timing of his moves are raising questions. His latest attempted measure, which sources tell the Reporter was pushed back for approximately a month, came ten days before President Donald Trump takes office again, and many argue that it is unnecessary. The Trump administration is expected to push back on Chopra’s proposal.

BlackRock owns more than 10 percent of dozens of community and regional banks across America, which could be directly affected by the passivity agreement with the FDIC, even though the company argues that the Federal Reserve Board already signed off on its compliance.

The “regulation by letter” that Chopra and others in the Biden administration have conducted since the November election has been condemned by many, including by one of his predecessors as CFPB Director, Mick Mulvaney, as the “government equivalent of a mafia protection racket.”