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TAYLOR MILLARD: Republicans Fight Uphill Battle Reining In Off The Rails Agency

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Taylor Millard Contributor
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More than four months after the Consumer Financial Protection Bureau knew that the agency itself had leaked the data of over 250,000 consumers, the Bureau is pushing forward with a rule that would require financial services providers to hand over even more personally identifying information on loan applicants.

Republicans are pushing back — though some of their proposals to rein CFPB in are unlikely to meet with success.

According to Sen. John Kennedy, under a new CFPB rule, “financial institutions would have to collect information about applicants, including the applicant’s census tract, North American Industry Classification System and years in business, among other information. Further, banks are required to report the owner’s race, ethnicity and sex; and whether the business is minority-owned, women-owned or LGBT-owned.” (RELATED: TAYLOR MILLARD: This Agency Wants To Slap A Scarlet Letter On Your Business)

The rule would apply to financial services providers that originated 100 or more small business loans in each of the two preceding calendar years, with a small business “defined as a company with $5 million or less in revenue from the previous fiscal year,” Kennedy said.

The rule comes fresh on the heels of the early 2023 unauthorized leak of personally identifiable data of 256,000 consumers by a now-former CFPB employee that was shrouded in secrecy for approximately two months after the fact. Republicans in Congress had previously understood that CFPB wanted the financial services providers with whom those consumers did business — as opposed to the leaking entity— to notify the consumers of the leak.

While the employee responsible has evidently since been terminated, there is no news of criminal charges having been pursued against him or her by the Bureau. When questioned by Congress earlier this month, CFPB head Rohit Chopra skirted around how long it took for his agency to contact the companies involved in the breach. House Republicans suggest that it took more than 72 hours for companies and consumers to learn about the leak.

In the aftermath, Kennedy is seeking the rollback of the new rule. Meanwhile, Sen. Ted Cruz and Rep. Byron Donalds are seeking complete elimination of the CFPB.

While Cruz has previously introduced legislation that would accomplish this, it is understood that Donalds agreeing to sponsor it in the House was precipitated by the leak and CFPB’s bad handling of it. Cruz and Donalds’ proposal has zero chance of passing this Congress. It is unlikely Kennedy’s bill could withstand Senate Democratic opposition or the filibuster.

A House proposal to put CFPB under the normal appropriations process might stand a better chance, but for now, the best option for reining CFPB in appears to be oversight — and Sen. Tim Scott, ranking member of the Senate Banking Committee, keeping the Bureau in the spotlight particularly as he garners media attention as a 2024 GOP presidential contender.

During a recent oversight hearing at which Chopra testified, Scott called out the data breach, and the irony of CFPB seeking to collect more consumer data given its mishandling of it. Scott said to Chopra, “under your leadership, the CFPB learned of a major data breach, in its own backyard, impacting more than a quarter-million consumers. At the same time, the CFPB was finalizing the rule that requires lenders to collect and report a vast swath of small business lending data on credit products, including personally identifiable information like race, sex, ethnicity to the CFPB. The irony here is just astounding.”

Recently, a spokeswoman for Scott in his capacity as ranking member confirmed that Scott will not be dropping the subject anytime soon, saying that “This is something the Ranking Member will continue to press Director Chopra on – especially as the CFPB, under the Director, pushes new rules seeking even more data from American consumers. If the CFPB cannot protect the data it has now, why should Americans trust it with more data?”

Nationally, Real Clear Politics’ polling average shows Scott with about 3.5% of the GOP primary vote. However, an American Greatness/National Research poll conducted June 12-14, 2023 shows Scott faring better in the “Live Free Or Die,” civil liberties-focused state of New Hampshire, at 7% having gained six points in a month, a bigger increase than any other candidate in the field and contrasted with a six point decline for Florida Gov. Ron DeSantis.

DeSantis may be earning praise from conservatives nationally for his campaign against “woke,” but his entanglements over First Amendment issues may not be selling well with libertarian-minded Granite State voters — whereas Scott’s criticisms of CFPB could.

Virtually all Republicans will of course be hoping that the Supreme Court shortly announces a decision finding the entire CFPB structure unconstitutional — and that could be coming — but if it doesn’t, the data leak should not recede from the spotlight. Scott promises to ensure that won’t happen.

Taylor Millard is a freelance journalist and can be found on Twitter @taylormillard. His work has appeared in The Spectator, Washington Examiner magazine, The Daily Beast, InsideSources, and HotAir.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.

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