US consumer finance chief calls for better risk management at banks, fintechs

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The recent failures of mid-size US lenders show the need for more robust risk management at banks and fintechs, along with improved regulation, the head of the top consumer financial watchdog agency said

Consumer Financial Protection Bureau Director Rohit Chopra told a gathering of retail bankers in Las Vegas that regulators were looking at liquidity, interest-rate risk management, capital frameworks, resolution planning and stress testing.

"It was fast and furious," Chopra said of SVB's implosion. While the scramble by customers to move their funds has subsided, "there's no question it has been a dramatic movement of money," he said. He is known for his deft policy messaging and firm calls for corporate accountability. In a three-year stint on the Federal Trade Commission, he established himself as anAs member of the Democratic minority, he advocated for penalizing individual executives rather than simply collecting more fines.

Chopra's presence at the Consumer Bankers Association's annual confab was a rare opportunity for facetime with an industry where some attendees took umbrage with Chopra's style and public remarks, notably concerning the Biden administration's wider campaign against "junk fees."

 

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Remember, the threshold for tough regulation included in Dodd-Frank for years was lessened in 2018 by the previous administration. It was $50B or more total assets, banks were subjected to more oversight. SVB lobbied Trump admin to raise to $250B. SVB was at $211B

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