The Senate Banking Committee has announced that on April 23, 2013, it will conduct a hearing on the CFPB’s third Semi-Annual Report to Congress. CFPB Director Richard Cordray is the only witness scheduled to appear.
According to the Consumer Bankers Association, Director Cordray is likely to be questioned about the CFPB’s data collection efforts. Those efforts were the subject of a report this week by Carter Dougherty of Bloomberg. According to the report, the CFPB has been demanding voluminous amounts of information from banks related to credit cards and other financial products and services and has also been buying data from vendors about various financial products such as auto and payday loans. The report indicates that the CFPB is using the information to build a database to inform its enforcement and rulemaking activities. It also discusses the strong criticism the CFPB’s demands for information have received from bank executives.
Under Section 1022 of Dodd-Frank, the CFPB can demand data from banks and other supervised entities outside of the examination process. That section directs the CFPB to monitor risks to consumers in the offering or provision of consumer financial products or services to support the CFPB’s rulemaking and other functions. It gives the CFPB authority “to gather information from time to time regarding the organization, business conduct, markets, and activities of covered persons and service providers” To gather such information, the CFPB can use a wide array of methods, including requiring banks and other “covered persons and service providers participating in consumer financial services markets to file with the Bureau, under oath or otherwise, in such form and within such reasonable period of time as the Bureau may prescribe by rule or order, annual or special reports, or answers in writing to specific questions.”