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CFPB responds to questions about data collection

Posted in CFPB General

The CFPB recently sent 49-pages of responses to questions about the CFPB’s data collection activities asked by members of the House Financial Services Committee in connection with the appearance of Steven Antonakes, CFPB Deputy Director, before the committee on July 9, 2013. As we reported, Director Cordray, when he appeared before the committee on September 16, 2013, heard Republican committee members criticize the CFPB for failing to provide those responses and indicated they would be provided within days.

Despite their length, the responses do not contain much in the way of new or noteworthy information. Their length is primarily attributable to the fact that there is considerable repetition in the CFPB’s question-by-question responses due to the overlap in and/or similarity of many of the questions asked.

Tracking the testimony provided by Messrs. Cordray and Antonakes in their appearances before the committee, the CFPB, in its responses, resists the suggestion that it is building databases that contain personal data or profiles on individuals. The CFPB states repeatedly that it does not monitor the accounts of particular individuals or track the financial habits of any specific individual.

Nevertheless, the responses did contain the following noteworthy items of information:

  • The CFPB identified eleven companies with whom it has contracts for purposes of purchase, collection, analysis and storage of data.
  • The CFPB identified twelve operational areas in which third-party vendors may receive personally identifiable information of consumers.
  • In FY 2013 (which ended on Sept. 30), the cost of the CFPB’s contracts to obtain data was $6,061,900. In FY 2012, the cost was $7,129,460.
  • The CFPB has been notified of and responded to 3 incidents that were deemed to be data breaches. The breaches impacted consumers who had submitted complaints to the CFPB’s consumer response system and all of the breaches resulted from employee error.
  • Among the questions asked by Representative Luetkemeyer was one observing the lack of data supporting several of the conclusions in the CFPB’s white papers on payday loans and overdraft products and the papers’ failure to examine alternatives to these products. Representative Luetkemeyer asked the CFPB how it would ensure that future reports are empirically based. In its response, the CFPB asserted that its white papers “are based on analytically rigorous and objective analysis of a robust dataset” and “draw conclusions that are supported by the data.” We have previously challenged that assertion.
  • The CFPB confirmed the statement made by Director Cordray in his testimony that the CFPB recently used Dodd-Frank Section 1022 to issue orders directing financial institutions to provide their standard form consumer credit agreements in connection with the CFPB’s arbitration study. Section 1022 allows the CFPB “to gather information from time to time regarding the organization, business conduct, markets, and activities of covered persons and service providers” by using various methods, including through the issuance of orders directing banks to provide such information.