The director of Dodd-Frank’s chief enforcement agency clashed Tuesday with the ranking Republican on the Senate Banking Committee over the agency’s sweeping collection of Americans’ personal finance records.
Consumer Financial Protection Bureau (CFPB) Director Richard Cordray visited Capitol Hill to testify before the committee as part of a semi-annual report to Congress. But he spent much of that time defending his agency’s massive data collection program against Republican senators, chief among them Idaho’s Mike Crapo.
“How many individual credit card accounts is the Bureau monitoring?” Crapo asked several times during the hearing, prompting the director to repeatedly demur.
“I’ve been asked this question a number of times,” Cordray said, “and I’ve said a number of times that’s not the way we proceed. We are not looking to monitor individual credit card accounts. We have no interest in what individuals — what you and I are spending, what their patterns are.”
But after repeated pressing, Cordray finally confirmed that his agency is collecting data on 80 percent of the credit card market, information on individual transactions for around 900 million credit card accounts.
“That’s roughly correct,” he conceded to Crapo, “but it’s not something new that we’re doing. We’re simply accessing the very same set of information that has been developed by private markets and is used by other regulators.”
Republican lawmakers have been trying to pin down the exact number of accounts monitored since at least July, when the CFPB’s deputy director was unable to answer the question.
Cordray claimed that the expansive data set is vital for his agency to understand — and set rules for — a complicated financial landscape.
“I make no apologies,” the director said. “We need that data and information to do our job, in order to keep up and oversee some of the most powerful financial institutions in the world.”
But despite Cordray’s assurances that personal data is always “anonymized,” some senators expressed privacy and security concerns.
Louisiana Republican Senator David Vitter told Cordray he had information contradicting the director’s claim that no personally identifiable information remains on the private data collected.
Contracts with one third-party data firm indicate that the CFPB intends to maintain the postal code, census identifier and age of birth along with the financial information of 5 to 10 million Americans.
“We’ve had experience in other agencies where phenomenal abuses of this kind of information have been undertaken,” Crapo worried. “And all that is necessary for this massive amount of information being collected to be made available [to hackers] is for someone to find the key.”
Keeping sensitive data secure is a big concern at the CFPB. The Daily Caller News Foundation reported last week that Ashwin Vasan, the agency’s new tech head, has almost no experience in information technology.
And Pennsylvania Republican Sen. Pat Toomey discovered that data security flaws revealed nearly one year ago in a report by the CFPB’s inspector general have yet to be fixed.
“We have been working to adopt their recommendations,” Cordray said, “and we are paying very appropriate, precise, diligent attention to the privacy and security of this data.”
Senator Crapo asked the Government Accountability Office to review the CFPB’s data collection last summer, and the agency agreed to open a probe in July. The investigation remains ongoing.
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