By Julian Hattem - 07/09/13 05:46 PM EDT
Republican lawmakers on Tuesday charged that too little is known about the private data being collected by the federal government’s new consumer financial watchdog.
GOP legislators on Tuesday compared data collection done by the Consumer Financial Protection Bureau — which was created by the Wall Street reform bill — to recent revelations about the National Security Agency's (NSA) surveillance programs and targeting of conservative groups by the Internal Revenue Service (IRS).
Rep. Shelley Moore Capito (R-W.Va.), head of the Financial Services subcommittee on Financial Institutions and Consumer Credit, added, “We simply do not know the extent to which the CFPB is collecting, storing or having outside contractors collect and store personally identifiable information.”
Officials from the bureau defended their work. They said the new agency is collecting the same sorts of data as the Federal Reserve and other financial regulators, but is not monitoring individuals.
“We are not monitoring any individual Americans,” said Steven Antonakes, the acting deputy director at the CFPB. “We're collecting broad data on markets.
“In the very limited cases where the bureau obtains personally identifiable information, it stores and protects that information along with other confidential information and data according to information security requirements that comply with federal laws and regulations,” he continued.
A portion of the financial reform law specifically prevents the CFPB from using its authority “for purposes of gathering or analyzing the personally identifiable financial information of consumers.”
The CFPB sometimes picks up personal information, though, either when consumers reach out to the CFPB themselves or through the agency's regular examinations of financial institutions, Antonakes said. The information collected could include information on names, addresses, employment, property and credit cards.
Antonakes was not able to provide the number of people whose data was collected by the agency.
The breadth of that data concerned Republicans, who raised comparisons to other recent scandals about personal information.
“If you look at the past several months, America has found out far more information about what their government is doing in regard to collecting information on them, whether it's the NSA or the IRS,” Duffy said. “Many of my constituents are concerned that the government has their health records, their phone records, their Internet records, their emails, and now the CFPB is monitoring their financial records, and we have a concern about our constituents' right to privacy.”
Democrats on the panel defended the bureau's data-gathering efforts, and on Tuesday a group of seven privacy advocates including the Consumer Federation of America, U.S. PIRG and Privacy Rights Clearinghouse objected to complaints about the CFPB's monitoring.
“As leaders of consumer and privacy organizations, we agree that the CFPB needs to use the wide range of data available to financial institutions and services in order to identify best practices and necessary safeguards,” the groups said in a statement.
“We acknowledge that the CFPB must protect the data it collects from misuse — but it also needs to be able to fully use it to understand how a consumer’s privacy may be violated,” they added.
All the information the agency collects is similar to what other regulators can pick up, too, Antonakes said on Tuesday.
“I don't believe we're plowing any new ground here,” he said.
The CFPB is hoping to store the data it collects for 10 years in order to track changes in the market.
Credit card and other financial service companies also gather consumer information, he said, and the CFPB's data are used to better understand where risks may appear in the market. Plus, had regulators had that kind of information during the 2008 financial crisis, Antonakes said they would have been better prepared to manage the fallout.
Business groups conceded that the information could be helpful for the agency, but that the CFPB needed to better explain its activities.
"The CFPB may need to collect data to do its job, but it is required by law to do so transparently," said Jess Sharp, the managing director in the U.S. Chamber of Commerce's capital markets center. "Clearly it isn't doing so, and it's hard to understand why they insist on keeping Congress and the public in the dark."