Watching The Watchdog

As part of our government's system of checks and balances, Congress conducts oversight over agencies to bring about transparency and accountability.  This is even more necessary with the Consumer Financial Protection Bureau (CFPB), which was established unlike any other federal department or agency.  Unlike most federal agencies, it does not have to justify its actions or expenditures and the director holds unique power to determine the agency's budget and mission priorities without any public debate or input from Congress.

As the Ranking Member of the Senate Committee on Banking, Housing and Urban Affairs, I recently participated in a hearing to gain insight into agency actions, including looking into the bureau's wide-spread data collection of citizens' financial information.  This was timely since the bureau was evasive in its responses to questions submitted in March about this data collection.  For example, I asked how many consumer accounts the CFPB is monitoring and the agency refused to disclose that information.  This lack of transparency of what the agency is doing and how it intends to use this personal financial data is troubling and warrants answers in a public forum. 

I learned through news reports that the bureau recently launched a massive data collection effort on consumer spending.  The reports indicated that the CFPB has allocated more than $20 million for collecting and tracking spending habits of more than 10 million Americans.  The size of this data collection and the amount of money being spent by the agency are a cause of concern for me, and should be for those Americans with credit cards, checking and other financial accounts.  At a recent hearing, I asked the President's nominee to head the bureau whether the federal government would allow consumers to opt out of this data collection, only to learn that such opt-outs are not available to citizens.  

The bureau was founded with a mission to watch out for American consumers, not to watch them.  The law that established the CFPB expressly prohibits gathering or analyzing the personally identifiable financial information of consumers.  While CFPB officials have stated the bureau is not collecting personally identifiable information, they have not disclosed or provided examples of the type of data being collected.  In order to get more answers, I have requested that the bureau provide information to the Senate Banking Committee on what kind of data is being collected and how will it be used. 

Because the CFPB's Inspector General has already identified data security issues at the bureau, I have questioned the bureau about how consumers can be assured that their information is indeed safe.  In addition, we need to know what safeguards are in place to prevent the use of the data to determine personally identifiable information.  For consumers who do not want this information being collected, they should have the opportunity to opt out of this database.  More than a decade ago, Congress required financial institutions to provide opt-outs to consumers who prefer not to participate in sharing of their financial information.  The federal government should be held to the same standard.  

This data collection effort by the CFPB is just the latest example of how government agencies can operate in murky waters absent proper congressional oversight.  I will continue to push for structural changes to the CFPB to bring about transparency, openness and accountability.  Moreover, we must eliminate government bureaucracy that stifles private sector innovation and does not provide any public benefits.  I will continue to seek answers to these and other concerns and press for needed reforms so that federal agencies do what they are designed to do-help, not hinder, Americans. 

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