According to a recent LexisNexis article titled “Big Brother is Watching…”, the Consumer Finance Protection Bureau (“CFPB”) has been in the process of assembling a massive database of consumer information with the stated purpose of using it to spot trends in consumer spending habits. Herewith, a snippet:
According to CFPB director Richard Cordray, the Bureau hopes to distill this raw data into useful analysis for making “data-driven” decisions at the Bureau. Cordray believes this research will assist CFPB in its regulatory efforts and bring unspecified improvement to the marketplace. While the benefits of the CFPB’s data collection efforts remain illusory, the actual cost of CFPB’s efforts are quite real.
CFPB is purchasing some of this data from private compaines (sic), including Experian–who is being paid up to $8.4 million to (sic) for data on 5 million to 10 million consumers “for use in a wide range of policy research projects.” A significant cost has also been, and will continue to be, born (sic) by banking institutions. By using its broad authority under Dodd-Frank to issue sweeping demands for records related to credit cards and other financial products, CFPB is using industry participants to bankroll the creation of its database-much to the ire of many banking institutions already saddled with burdensome government oversight. The reams of data demanded by CFPB have come in addition to audits and data requests from other branches of the government, and, as per usual, are reported to be unfocused and overly inclusive.
A former regulator at the CFPB explains it thusly in National MortgageNews.com :
“…the bureau needs to know more about the industry than the companies and their trade groups are willing to disclose….”
Hmmm. Snooping in the name of ignorance. I was hoping for a more noble purpose. Hamilton Berger, the perpetually frustrated prosecutor on the Perry Mason television series, used to object to this as conducting a “fishing expedition.”
I’m not Big Bank apologist, but I kinda suspect that the industry’s reticence might have something to do with consumer privacy rights under Gramm-Leach-Blilely and a host of other state and federal laws. Perhaps the Consumer Finance Protection Bureau might brush up on these laws before retrieving consumers’ financial information under the guise of “protecting” them.
