b'What Were Watching: 2021 Emerging IssuesEnforcement + Regulatory Trendsby extracting large civil money penalties through settlements and administrative actions. One other In 2019, we predicted that federal enforcement actionpotential concern for the consumer financial services would remain down unless or until there was a changeindustry is that investigations by CFPB staff that were in administration. Surprisingly, 2020 saw an uptick innot given final approval to bring enforcement actions federal action, largely attributable to a much more activeduring Director Kraningers tenure could be reopened CFPB. Under the Biden administration, we expect theand reconsidered by Mr. Chopra.upwards trend in federal enforcement actionsbyWith the Democrats seizing control of both the CFPB and other agenciesto continue in 2021. Inhouses of Congress, and a consumer-friendly particular, we expect more frequent enforcement activityBiden administration, we expect that the House of at the federal level targeting large market participants,Representatives and Senate Democrats will continue even where the alleged consumer harm may be indirect,to seek a role in consumer finance oversight and speculative, or difficult to measure.enforcement. Given the Democrats narrow majority Although there was a slight decrease in statein the Senate, they may be foreclosed from pursuing enforcement activity in 2020 as compared to 2019,certain aggressive consumer protection initiatives, at state activity remains significant. We expect stateleast for the time being. activity to remain at or above this level into 2021, andThe global pandemic will also likely to continue to expect California, Massachusetts, and New York todistract from and disrupt Democrats consumer finance remain leaders in this space. In particular, we expectefforts, at least through the first half of 2021. After the enforcement activity by California to increase asfocus has shifted away from managing the effects of the newly-formed DFPI, commonly referred to as aCOVID-19, we expect to see federal and state agencies mini-CFPB, gets up and running in 2021. commence investigations of the industrys compliance The results of the recent presidential election have ledwith pandemic-related consumer protection measures. to speculation regarding what legal changes may beWith the shifting of priorities, we also expect the Biden in store for the consumer financial services industryadministration to advance a number of consumer-and, in particular, the CFPB. In January 2021, Directorfriendly policies, particularly in the areas of payday Kraninger resigned from her position at Presidentlending, indirect auto lending, and student lending Bidens request. President Biden reportedly intends all areas we expect a CFPB led by Rohit Chopra to to replace her with Rohit Chopra. Mr. Chopra (whoseprioritize based on his record and public statements. nomination to the FTC was unanimously confirmed) isAt the state level, we expect California to lead the likely to be confirmed given the Democrats control ofway, given its new mini-CFPB with regulatory and the Senate. Under Mr. Chopras leadership, the CFPBenforcement authority of nearly all financial products is likely to be much more aggressive across the boardoffered to California consumers.in initiating investigations and pursuing enforcement actions. Based on Mr. Chopras public statements and experience, we expect the student loan originationLooking Ahead to 2021The U.S. Supreme and servicing industry to be a prime target of CFPBCourts Docket enforcement activity, followed by the auto lending and payday loan industries. We further expect theThe Supreme Court is set to decide several important actions taken by the CFPB to be more punitiveacases in 2021 that affect the consumer finance industry.return to the Director Cordray-era where one objective of the Bureau was to punish enforcement targets 56'