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Interview for sheriff's job
Rohit Chopra, President Biden’s pick to head the Consumer Financial Protection Bureau, “said he would seek to protect Americans struggling with debt amid the coronavirus pandemic from potential abuses by lenders” at his Senate confirmation hearing, the Wall Street Journal reported. “Among Mr. Chopra’s priorities, industry officials said: ensuring credit reports are accurate, helping consumers behind on rent or mortgage payments, and ensuring that so-called payday lenders assess their customers’ ability to repay short-term, high-interest loans.
“Mr. Chopra’s supporters say he won’t hesitate to use the tools at the CFPB’s disposal, including civil investigative demands—a form of administrative subpoena—and civil monetary penalties to act against lenders and loan servicers suspected of abuses. The bureau is expected to scrutinize credit reporting, in particular erroneous information that appeared on consumers’ credit reports after they entered into deferment or forbearance programs during the pandemic.”
“The hearing was milder than expected, especially for Mr. Chopra, who would lead an agency that is often demonized by Republicans,” the New York Times said. “Senator Patrick J. Toomey of Pennsylvania, the ranking Republican, repeated his party’s criticisms of the consumer bureau in his opening remarks, calling it ‘arguably the most unaccountable agency in the history of the federal government’ and one that has pursued an ‘activist, anti-business agenda.’’
“But those criticisms were undercut at times by members of his own party. Several times throughout the hearing, Republicans called for stricter oversight of businesses that hurt consumers, especially those that target military service members and the elderly.”
Chopra “vowed the bureau would come to the aid of student loan borrowers, consumers trying to correct inaccurate credit reports and homeowners hit hard by the coronavirus pandemic,” American Banker said.
Wall Street Journal
Contrarian bet
While many real estate companies have been buying up single-family homes and renting them out, Promise Homes Co. is doing the opposite: It “wants its renters to move out and buy their own houses. The company has been acquiring occupied rental houses around Atlanta and northern Florida cast off by other big landlords and promoting homeownership to the tenants it inherits.”
“Promise Homes dangles monthly rent discounts to tenants who boost their credit scores and counsels them on how to do so. It banks emergency rent credit for those who consistently pay on time and will vouch for model tenants when they apply for home loans. The for-profit company works with Operation Hope, a nonprofit founded by John Hope Bryant that seeks to reduce the racial wealth gap with financial literacy and access to credit. Promise Homes pays Operation Hope to provide the counseling to its residents.”
Bottom fishing
Koch Industries, meanwhile, is betting on a rebound in the commercial real estate market. The “sprawling Wichita, Kan.-based conglomerate is emerging as a major real-estate investor during the pandemic, using its robust cash reserves to buy properties at beaten-down prices and betting on a longer-term recovery. The company’s Dallas-based property arm, Koch Real Estate Investments, is among a growing number of investors looking to take advantage of the depressed market. But few others have been as ambitious in their acquisitions.”
“Real estate is a relatively new focus for Koch Industries. The property arm is only four years old and until last year kept a low profile, quietly buying stakes in a number of properties but mostly hiding behind developers and other investors. That changed during the pandemic.”
Light burden
The Treasury Department’s Financial Crimes Enforcement Network “isn’t looking to shoulder banks with additional compliance burdens” as it “implements sweeping new anti-money-laundering reforms,” Director Kenneth Blanco said Tuesday.
Washington Post
Fintech 101
“The field known as fintech was pioneered by startups dreaming of toppling financial giants and democratizing access to credit. But now many of those behemoths have joined in,” including JPMorgan Chase and Walmart.
Bloomberg offers a primer and short history of the financial technology industry, including possible downsides and what regulators are concerned about.
Elsewhere
Back to bitcoin
Goldman Sachs “has restarted its cryptocurrency trading desk and will begin dealing bitcoin futures and non-deliverable forwards for clients starting next week,” Reuters reported. “The desk is part of Goldman’s activities within the fast-growing digital assets sector, which also includes projects involving blockchain technology and central bank digital currencies. As part of this work, the bank is also exploring the potential for a bitcoin exchange traded fund and has issued a request for information to explore digital asset custody.”
“The trading desk reboot comes amid growing interest by institutions in bitcoin, which has soared more than 470% over the past year. Goldman first set up a cryptocurrency desk in 2018, just as bitcoin’s price was falling from record highs, muting investor interest in digital coins. Since then, market infrastructure for bitcoin and other large cryptocurrencies has significantly matured, with many established financial institutions offering products and services.”
Quotable
“We must not forget that the financial lives of millions of Americans lay in ruin. Many have seen their jobs disappear and will not be able to easily resume their [rent and mortgage] payments.” Rohit Chopra, President Biden’s nominee to head the Consumer Financial Protection Bureau, at his Senate confirmation hearing.
