Gensler pressed for aggressive implementation of the post-crisis Dodd-Frank Act and its provisions calling for derivatives market reforms. He won over progressives for insisting on a tough version of the Volcker Rule, which banned proprietary trading by Wall Street firms, over stiff resistance from financial firms including Goldman, JPMorgan Chase & Co. and Citigroup Inc.
Under Gensler, the CFTC, long considered a backwater, became a major Wall Street regulator. At the same time, his hard-charging style left some staff exhausted and ultimately contributed to a push to unionize.
That approach may be a challenge for Gensler at the SEC, which is more than five times the size of the CFTC. One person at the SEC who asked to remain anonymous said that staff there have noted that morale plummeted during his CFTC tenure. A survey of federal employees at the time named the derivatives regulator as one of the worst places to work among small agencies, giving it low marks for work-life balance, pay and quality of leadership.
Still, few dispute the agency’s output while he was in charge. Gensler led the push for tough new restrictions on the over-the-counter derivatives markets. He oversaw a slate of new rules and enforcement actions. Many of the world’s biggest banks paid billions of dollars in fines for rigging a rate used to price everything from complex derivatives to mortgages.
At the CFPB, progressives will be looking to Chopra to reinvigorate a regulator that they say has become a toothless version of the agency that he helped Warren create. In his first stint at the agency, he served as its student loan ombudsman. That experience could come in handy if he is to make good on Biden’s promise to crack down on private lenders that mislead student borrowers.
The Warren-aligned Progressive Change Campaign Committee said the selection of Chopra was “a big win for consumers and a sign that executive power will be used to get tangible results for the American people.”
One reason Chopra was picked, supporters say, is that he could start overturning some of Trump’s policies on Day One, ensuring that the CFPB returns to its focus on helping consumers deal with the complexities of the financial system.
Because he is already a Senate-confirmed official, Chopra could immediately become acting CFPB chief under a federal law for filling temporary vacancies. He would be able to stay at the FTC while keeping the CFPB post for about 300 days.
--With assistance from Robert Schmidt.
This article was provided by Bloomberg News.