Politics & MoneyMortgage

CFPB reportedly pulling back from Equifax data breach investigation

Reuters reports that bureau is not aggressively pursuing investigation

In another signal that Mick Mulvaney’s Consumer Financial Protection Bureau will operate far differently than it did under Richard Cordray, the CFPB is reportedly pulling back from its investigation in the data breach at Equifax, which exposed the personal information of 145.5 million U.S. consumers to hackers.

Shortly after Equifax revealed the data breach, the CFPB said that it would begin looking into the breach, but Reuters reported Monday that the CFPB is not taking its previously traditional actions when pursuing a case of this magnitude.

From Reuters:

Equifax said in September that hackers stole personal data it had collected on some 143 million Americans. Richard Cordray, then the CFPB director, authorized an investigation that month, said former officials familiar with the probe.

But Cordray resigned in November and was replaced by Mulvaney, President Donald Trump’s budget chief. The CFPB effort against Equifax has sputtered since then, said several government and industry sources, raising questions about how Mulvaney will police a data-warehousing industry that has enormous sway over how much consumers pay to borrow money.

Three sources say, though, Mulvaney, the new CFPB chief, has not ordered subpoenas against Equifax or sought sworn testimony from executives, routine steps when launching a full-scale probe. Meanwhile the CFPB has shelved plans for on-the-ground tests of how Equifax protects data, an idea backed by Cordray.

According to the article, the CFPB also reportedly “rebuffed” offers to help conduct exams of the credit reporting agencies from the Federal Reserve, the Federal Deposit Insurance Corp., and the Office of the Comptroller of the Currency.

The CFPB is hardly the only regulator looking into Equifax’s failure to protect the sensitive personal information of 145.5 million people.

In the wake of the breach, the Federal Trade Commission, the House Financial Services Committee, the Senate Finance Committee, the New York Department of Financial Services, and all 50 state attorneys general launched inquiries into the breach.

Equifax is also facing lawsuits from the state of Massachusetts, and the cities of San Francisco and Chicago. Equifax also disclosed in November that it was facing more than 240 class action lawsuits filed by consumers in federal, state and Canadian courts.

Despite the breadth of fallout that Equifax is facing, an investigation and possible enforcement action from the CFPB had the potential to seriously impact Equifax and compensate all of the affected consumers, but Mulvaney’s supposed actions indicate that no such action will be taken.

While the Reuters article makes it appear that the investigation is ongoing but defanged, prominent Democrats and defenders of the CFPB suggested that the Equifax investigation is all but over.

The CFPB’s chief defender, Sen. Elizabeth Warren, D-Mass., said Monday that Mulvaney “killed” the Equifax investigation.

Other prominent Democrats, including Senate Minority Leader Sen. Chuck Schumer, D-New York; Sen. Sherrod Brown, D-Ohio; and Sen. Mark Warner, D-Virginia, all took Mulvaney to task over the Equifax issue.

The two most prominent elected officials in New York, which has been one of the most aggressive states in terms of taking action after the breach, also said that they have no intention of giving up on pursuing Equifax.

New York Gov. Andrew Cuomo said: “Reports that (Mulvaney) may let Equifax off the hook should surprise no one. The GOP will protect the interests of corporations over consumers every time,” while New York Attorney General Eric Schneiderman said that the state is “continuing to move full steam ahead with our multistate investigation Equifax’s data breach—regardless of Washington’s unwillingness to protect consumers.”

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