October 03, 2018
On the third day of Brett Kavanaugh’s Supreme Court confirmation hearing, Senator John Cornyn trotted out what has become a staple GOP criticism of the nation’s consumer watchdog agency, the Consumer Financial Protection Bureau. The agency, Cornyn lamented, has “vast powers to get into the personal financial information of every American… really more authority than we would ever give any of our intelligence agencies.” It’s a charge that has been echoed by several of his compatriots on the right, including Chairman of the Senate Committee on Banking, Housing and Urban Affairs, Mike Crapo.
The Consumer Financial Protection Bureau has drawn the ire of Wall Street executives and their allies on Capitol Hill since its inception. Formed in the wake of the 2007-08 financial crisis as part of the Dodd–Frank Wall Street Reform and Consumer Protection Act, the Bureau is tasked with regulating financial products and services and protecting consumers from abusive practices by financial institutions. This has resulted in the return of nearly $2 billion to customers who were duped by credit card companies and refunds of over $60 million to Americans extorted by debt collectors.
The insinuation that the agency is spying on American consumers in ways that would make a National Security Agency (NSA) agent blush is hardly new. But it is as mendacious now as it was when it first became a talking point. While the agency collects data to analyze markets and identify risky practices, it does not track individuals and it strips direct or personal identifiers from the aggregate information it uses. This is borne out in contract documents, which stipulate that the data the agency receives for research purposes are anonymous. This is similar to how the Census handles information, and it stands in stark contrast to the NSA’s practice of collecting data specifically in order to identify and track individuals of interest.
There is only one scenario in which the Consumer Financial Protection Bureau utilizes personally identifiable information: when a consumer asks them to do so. This one exception involves knowing, direct consent by the consumer to whom the information belongs, for the purposes of resolving an issue with an entity that the Bureau regulates. To this end, the Bureau’s consumer response function has handled millions of complaints since 2011, and it has been wildly successful at securing relief for Americans who’ve been taken advantage of by large banks and other powerful financial institutions. Meanwhile, privacy advocates, such as Privacy Rights Clearinghouse and the Electronic Privacy Information Center, regard the attacks leveled by Senator Cornyn (who, for the record, has no such qualms with the NSA) and others as specious, and largely support the agency’s use of data.
It’s clear that the privacy-related objections to the Consumer Financial Protection Bureau are disingenuous at best. They appear to be a smokescreen for opposition. It is worth asking why Senator Cornyn is really reluctant to protect Americans’ financial security. At a time when the agency faces politically motivated challenges on several fronts, including the potential nomination of a hostile judge to the nation’s highest court, voters deserve to know the answer.
