Scoop: “A stunning demonstration of regulation by enforcement”: Elizabeth Warren acolytes make their final stand via last-minute regulations

Rohit Chopra and Lina Khan are making the most of President Joe Biden's lame duck presidency.

Sen. Elizabeth Warren’s (D., Mass.) longtime acolytes who staff the Biden administration in top roles are using their vast powers to target industries opposed to Joe Biden’s regulatory overreach, before President-elect Donald Trump takes office in January.

Under the cover of the week before Christmas and an explosive budget battle on the Hill, Rohit Chopra, the director of the Consumer Financial Protection Bureau (CFPB), issued multiple actions against corporations, including a lawsuit against Zelle and three of the banks that partially own the peer-to-peer payment service. Chopra was one of Warren’s first hires when President Barack Obama tasked her with setting up the CFPB.

The CFPB’s flurry of last-minute action also included finalized rulemaking on overdraft fees and a policy directive that one banking expert told the Washington Reporter is “effective immediately without going through any rulemaking process” on credit card fees. In its latest round of legal action, Chopra’s CFPB sued Walmart.

Douglas Holtz-Eakin, the former Director of the Congressional Budget Office and current head of the American Action Forum think tank, said that Chopra has rolled out nearly 20 regulations since the election. “Public morality slump in financial services OR damaging, politically-driven agenda?” he asked.

The CFPB’s actions against Zelle are “a stunning demonstration of regulation by enforcement, skirting the required rulemaking process,” Trish Wexler, a JPMorgan Chase spokesperson, told the Reporter. Chopra’s actions amount to “a last-ditch effort in pursuit of [a] political agenda,” she said. “The CFPB is now overreaching its authority by making banks accountable for criminals, even including romance scammers.”

“Rather than going after criminals, the CFPB is jeopardizing the value and free nature of Zelle, a trusted payments service beloved by our customers,” Wexler said.

The Reporter previously covered that Chopra is under fire for personally investing in the same firms he is targeting with the CFPB; his final actions have been criticized by the lawmakers who will be at the forefront of financial policy in the next Congress.

Sen. Tim Scott (R., S.C.), who will chair the Banking Committee next Congress, went so far as to demand that Chopra “resign” due to his “partisan crusade.” Rep. Andy Barr (R., Ky.), one of the leading Republicans on the Financial Services Committee, described Chopra’s actions as a “final kiss on the ring to Elizabeth Warren before his imminent firing.”

“Director Chopra has once again decided to use regulation by enforcement to bully American businesses, harming the very consumers and small businesses they are supposed to protect,” Barr said. “Once President Trump is back in the White House, the CFPB’s unchecked, harmful behavior will come to an end.” Barr is onto something. Elon Musk, one of Trump’s closest allies, recently said that he wants to “delete [the] CFPB.”

Chopra is not the only Warren acolyte who’s remaining active until the very end. Lina Khan, the chair of the Federal Trade Commission (FTC), has worked with Warren for over a decade, and she recently announced a rule banning “junk fees” at hotels or concerts.