February 10, 2014

Does the CFPB Know What's in Your Wallet?

Hester Peirce

Former Senior Research Fellow
Summary

Things got pretty heated on Jan. 28 when lawmakers questioned Richard Cordray — director of the Bureau of Consumer Financial Protection — about the bureau’s monitoring of more than 900 million U.S. credit card accounts. Cordray bristled at suggestions that the data could be used for unseemly purposes.

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Things got pretty heated on Jan. 28 when lawmakers questioned Richard Cordray — director of the Bureau of Consumer Financial Protection — about the bureau’s monitoring of more than 900 million U.S. credit card accounts. Cordray bristled at suggestions that the data could be used for unseemly purposes.

His confidence in the bureau’s current handling of the data does little to answer questions about why the CFPB is collecting such a large amount of data and whether one man’s pledges to keep sensitive consumer information secure are sufficient. An agency that operates without accountability to the American people should not be entrusted with their private financial data.

At the hearing, Cordray defended the massive data collection in several different ways. First, everyone else is doing it. That is an argument for looking at practices of other regulators, such as the Office of the Comptroller of the Currency, but old regulators’ bad habits are no excuse for new regulators to follow suit.

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