In the latest installment in the CFPB data collection controversy, the House Financial Services Committee’s Subcommittee on Financial Institutions and Consumer Credit held a hearing on July 9 entitled “Examining How the Consumer Financial Protection Bureau Collects and Uses Consumer Data.” The sole witness was Steve Antonakes, CFPB Acting Deputy Director.
Committee members engaged in the expected political posturing, with Republicans challenging the CFPB’s data collection activities as an unjustified intrusion into consumers’ privacy and Democrats defending those efforts as necessary for preventing a future fiscal crisis. Nevertheless, the hearing did yield some substantive information.
Mr. Antonakes indicated that in FY 2012, the CFPB spent approximately $7.1 million on obtaining data from vendors and to date has spent approximately $3.1 in FY 2013. He agreed to provide copies of all vendor contracts to the Committee. In response to questions from Republican Congressman Duffy, he indicated that the CFPB has submitted its policy on records destruction to the National Archives for approval and is seeking to keep the data it collects for 10 years (which retention period Mr. Antonakes indicated was needed for the CFPB to study market trends over time). He also agreed to arrange an onsite visit for Committee members to personally observe the CFPB’s systems for protecting data, as requested by Democratic Congresswoman Maloney.
Mr. Antonakes also refuted the suggestion from Republican Congressman McHenry that the CFPB is prohibited from collecting personally identifiable financial information about consumers. Mr. Antonakes observed that the CFPB can collect such information in connection with exercising its supervisory authority and through its consumer complaint system. However, he indicated that when such information is used for market monitoring purposes, it is first stripped of any personal identifiers.
Mr. Antonakes also appeared to take aim at industry charges that the CFPB was obtaining data in violation of Section 1022 of the Dodd-Frank Act because the CFPB has not issued a rule or order requiring companies to provide the information it has been demanding. Without identifying that section, Mr. Antonakes noted that, in obtaining data for market monitoring purposes, the CFPB is not utilizing a “specific rule” relating to obtaining monitoring information. Rather, he indicated that the CFPB is obtaining such information through the purchase of data from vendors, publicly available sources, its supervisory program and its complaint system.
The data collection controversy can be expected to continue. As we reported, Senator Crapo sent a letter on July 2 to the Government Accountability Office (GAO) requesting an investigation of the CFPB’s data collection activities. At the hearing, Republican Committee members indicated they also wanted the GAO to confirm Mr. Antonakes’ assertions that the CFPB’s data collection practices are the same as those of the bank regulatory agencies.