The Consumer Financial Protection Bureau fell under the microscope Tuesday as lawmakers probed into the bureau’s use of consumer financial data.
Leaders with the agency appeared before the House Financial Services Committee to allay concerns about data collection efforts already underway.
The bureau is in a catch-22: it collects data to inform opinions on how to help borrowers, but this data also remains a privacy concern for government officials and the general public.
Sen. Mike Crapo, R-Ida., recently asked the Government Accountability Office to investigate the “big data” collection efforts underway on consumer habits at the CFPB.
Appearing before the House Committee, CFPB Acting Deputy Director Steven Antonakes faced an intense grilling about the scope of his agency’s data collection efforts.
Rep. Carolyn Maloney, D-N.Y., said she knows the financial services industry analyzes data to make decisions and market products; therefore, she believes it’s appropriate for the CFPB to have access to the same information to protect customers.
“The more data the bureau has, the better informed it is when it writes rules,” added Maloney.
Rep. Sean Duffy, R-Wis., voiced much stronger reservations about the CFPB’s use of data.
“My concern here is that much of the info that we’ve received on your data collection or monitoring on financial info has come from news reports,” said Duffy, who was undoubtedly referring to the recent Bloomberg article that reported the CFPB has begun collecting data on at least 10 million consumers.
Duffy said the CFPB has been less than forthright in explaining what information is being collected, where the data is coming from and how it’s being used.
Rep. David Scott, D-Ga., defend the bureau’s mission, but cited a need for more specific answers. “I think it’s very important that we have a very clear explanation, a clear understanding, from the CFPB and [that they] answer each of these charges coming from the other side.”
“The CFPB was put in with Dodd-Frank to protect consumers. You cannot protect consumers without the capacity of gathering information,” he added. “If you limit that capacity of the CFPB, its like cutting the legs out from under them and then condemning then for being a cripple.”
Scott noted the Dodd-Frank Act, which created the CFPB, forbids the collection of any data that can be personally identified to an individual.
Rep. Robert Pittenger, R-N.C., added that the CFPB is obtaining information in two different ways: by compelling supervised entities to provide consumer data upon request, and by purchasing consumer data from outside sources.
Once each committee member had the opportunity to speak, Acting Deputy Director Antonakes defended the CFPB’s actions.
The data allows the bureau to provide meaningful reports, Antonakes told lawmakers. He defended the bureau, saying it makes every effort to collect data in an efficient manner and to safeguard information.
“We’re looking at individual loan-level account information, but we’re not seeking to determine who that particular consumer is,” said Antonakes. “We have no interest whatsoever in trying to determine who that specific individual is.”
Addressing the specific number of individuals being tracked by the CFPB, Antonakes simply stated, “We are collecting broad data that is desensitized.”