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FSC Chairman Questions CFPB’s Data Collection Methods

collaborationCongressman Jeb Hensarling (R-Texas), Chairman of the Financial Services Committee, issued a statement on September 23 regarding the Government Accountability Office (GAO) report to the effect that he believes the Consumer Financial Protection Bureau (CFPB)'s data collection methods are intrusive and therefore not in consumers' best interests.

“It seems the CFPB is trying to out-NSA the NSA when it comes to accumulating information on Americans,” Hensarling said. “This is, without a doubt, an unwarranted and shocking intrusion into the privacy of American citizens.  How exactly does the CFPB’s effort protect consumers?”

Hensarling noted that the GAO report states that CFPB employs 13 massive data collection programs that gather data from 11 million credit reports a month, 195 million mortgages a month, and 700,000 auto sales transactions a month that are linked to consumer credit information. CFPB also makes use of the National Mortgage Database, which Hensarling said was not fully examined by the GAO as part of the report.

The GAO report came as a result of legislation passed by Congress in January that required the GAO to look into CFPB's data collection methods following CFPB's refusal to disclose information about its program to Congress, according to Hensarling.

“It literally took an act of Congress to obtain this information because the unaccountable CFPB would not answer our questions,” Hensarling said. “The American people are rightfully worried about the massive amounts of private information government collects on their personal lives, especially in this age of criminal hackers, data breaches and identity theft. This report reveals troubling deficiencies in the CFPB’s data security procedures and privacy controls, as well as an apparent effort by the CFPB to skirt the consumer privacy protections required by Congress in both the Dodd-Frank Act and the Paperwork Reduction Act.”

In response to the findings of the GAO report, CFPB spokesman Sam Gilford stated: "Data is essential for effective financial regulation. It allows regulators to see how markets are functioning and monitor the impact of rules. As GAO stated in its report, '[p]rior to and during the 2007-09 financial crisis, [GAO] and others noted that the lack of data on consumer financial products and services hindered federal oversight in areas such as mortgages and fair lending.' The GAO’s report recognizes that the Bureau collects data on a scale similar to other regulators and uses that data to carry out its mission to protect consumers. The CFPB agrees with the GAO’s recommendations, which focus primarily on documentation of processes related to data collection.

"As the report notes, the majority of the large datasets maintained by the CFPB are de-identified, and many of the largest datasets maintained by the CFPB use data procured from commercial aggregators, which is also available for purchase by private companies. The CFPB has disclosed details of its market-monitoring on numerous occasions over the past several years, including in Congressional testimony and correspondence, and in public documents such as its Strategic Plan, Budget, and Performance Plan and Report."

About Author: Brian Honea

Brian Honea's writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master's degree from Amberton University in Garland.
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