CFPB Head Warns About Asset Managers Owning Controlling Stakes in Banks

Vanguard recently signed an agreement to remain a ‘passive’ investor in banks supervised by FDIC.

Rohit Chopra, director of the Consumer Financial Protection Bureau (CFPB), speaks during a Senate Banking, Housing, and Urban Affairs Committee hearing in Washington, on June 13, 2023. Michael A. McCoy/Getty Images

Asset managers that acquire an influential stake in banking institutions must be kept in check, according to Rohit Chopra, director of the Consumer Financial Protection Bureau (CFPB).

“Today, very large investment managers, like BlackRock and Vanguard, own significant stakes in commercial enterprises across the economy,” said Chopra in a Dec. 30 statement. “They also own stakes in insured banks,” he said, referring to banks whose deposits are insured by the Federal Deposit Insurance Corporation (FDIC).