Prepared Remarks of CFPB Director Rohit Chopra at the Congressional Black Caucus Foundation's 53rd Annual Legislative Conference

Good morning. Thank you to Acting Secretary Todman and to Congressman Cleaver for hosting this session on one of the biggest challenges we are facing as a country: housing.

For me, housing boils down to two things: health and wealth. You will hear from others today about the enormous impact it has on our physical and mental health.

Without question, housing is more than a physical structure, it is what provides the spiritual space for what we think of as a home, where we can be supported, fulfilled, and reach our highest potential. But my main focus is on the second: wealth. Housing, mortgage lending, and homeownership have been the single most important driver of wealth for so many families. Wealth determines not just whether one can survive but also determines how well one can shape their destiny.

Twenty years ago, subprime-style mortgage lending was ratcheting up across America. Financial regulators largely watched on the sidelines and ignored the warnings until it completely crashed the global economy. In many ways, this was a new type of redlining -reverse redlining - where predatory lenders targeted neighborhoods and set borrowers up to fail, with so many families ending up in foreclosure. While every part of the country was affected by the financial crisis, we should never forget that the Great Recession erased half the wealth of Black households in America, erasing decades of gains and widening the racial wealth gap to new levels.

The agency I lead, the Consumer Financial Protection Bureau, started up after the crisis. And in the past few years, here's just a few things we've been doing to make fixes:

First, we're prosecuting redlining again. People like to think that redlining is a relic of the past, and it's not. Attorney General Merrick Garland, Assistant Attorney General Kristen Clarke, and I have announced actions against mortgage lenders, and, for the first time, against lenders operating outside of the banking system.

It's not just the redlining of the past, it's also digital redlining. People sometimes say that algorithms and artificial intelligence can take the bias out of the equation, but they can't. The bias can be baked into the data. We're making it crystal clear that lenders are responsible for the AI they're deploying, and they're responsible for explaining why their algorithm denied a borrower.

Second, we're doing everything we can to make sure home appraisals are fair and accurate. There are many real estate agents in the audience today. No real estate agent should have to advise a client to hide the photos of their children, the diploma from their minority-serving institution, or other evidence of their race before their home appraisal. An inaccurate appraisal can destroy wealth.

Since the CFPB assumed the chairmanship of the federal appraisal regulator, we are taking a series of steps to root out conflicts of interest and fix our appraisal system. Recent data from the Federal Housing Finance Agency shows that the work across the federal government is bearing fruit, with racial disparities on appraisals declining significantly. We're putting into place new policies to give people the ability to challenge their appraisals, and we've finalized rules that ensure that algorithmic and AI-driven appraisals are fair, too.

Third, we're getting ready to ensure that billions of dollars go back into the pockets of homeowners who refinance. Markets anticipate significant reductions in interest rates, making millions eligible for reductions in their monthly payments. In previous refinancing cycles, we saw that many Black homeowners were left out. We're developing a plan to streamline refinancing so that people can lower their costs and build more wealth. We're also looking at exorbitant closing costs and junk fees that block refinancing for existing homeowners and drain downpayments for aspiring ones.

And there's so much more. Together with other agencies, we're working to clean up the tenant screening industry that uses shoddy practices that block people from housing or falsely claim they have a criminal record. We're scrutinizing fees, like application fees for phantom rental units, and move-out fees that trap people in rent increases.

The bottom line is that we cannot allow housing to drain wealth - it must build wealth. And we need all of your help to make this a reality. Thank you.

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