The Consumer Financial Protection Bureau wants anonymous financial information to improve its oversight of the banking and credit industries. Banks don't see the point.
The Consumer Financial Protection Bureau is collecting data on as many as 10 million consumers, Bloomberg says.
The government agency is asking banks and credit reporting agencies to provide anonymous records related to credit cards, mortgages and checking accounts. The banks aren’t happy about having to provide it because they’re unsure of the benefits.
CFPB Director Richard Cordray said the data will help the bureau write better rules and have the end result of spurring customer service innovation and competition. It isn’t collecting information that could be tied to a specific person, such as Social Security numbers, the agency says — although Senate Republicans are still concerned.
In a hearing about the CFPB’s recent activities, Idaho Sen. Mike Crapo called the data collection creepy and said, “The bureau was founded with a mission to watch out for American consumers, not to watch them,” The Washington Post reports. He said the agency had downplayed how much data it was collecting, and how much it was paying private companies to get and analyze it.
Argus Information & Advisory Services is being paid $15 million to analyze credit card info from nine banks. The CFPB is also scrutinizing data on credit card add-on products, credit monitoring, debt cancellation, and checking account overdrafts for signs of abuse or ways to improve regulation.
The agency is also paying some credit reporting agencies for data. Experian will get up to $8.4 million for data on as many as 10 million consumers, and Clarity Services Inc. will get $443,260 for data on payday loans. CoreLogic Inc. will get $796,000 for mortgage loan data.
Cordray told the Senate that other government agencies such as the Federal Reserve regularly collect consumer data, and that banks have much more detailed data than his agency is requesting.
While the director of the CFPB should have a parallel hearing in the U.S. House, Cordray won’t be allowed to speak there. Some House Republicans refuse to recognize his appointment as head of the agency, The Wall Street Journal says.