WASHINGTON – Republicans on a key House financial committee Tuesday criticized a top official of the Consumer Financial Protection Bureau for not revealing how many consumers have had their financial information collected by the agency.
The hearing was in response to an April Bloomberg News report that the CFPB has gathered financial data on at least 10 million American consumers.
Steven Antonakes, deputy director of the CFPB, told the House subcommittee on Financial Institutions and Consumer Credit that he didn’t know the specific number of Americans affected by the data collection but would provide it at an unspecified later date. He noted the regulatory agency collects consumers’ financial data in accordance with the law.
Steven Antonakes, deputy director of the Consumer Financial Protection Bureau, defended the agency’s data-collection practices Tuesday. (Aubrey Pringle/MNS)
Created less than two years ago as part of the Dodd-Frank banking reform law, the CFPB regulates consumer financial products and services. Dodd-Frank granted the agency “the authority to gather information from time to time regarding the organization, business conduct, markets, and activities of covered persons and service providers.”
Committee members of the House subcommittee on Financial Institutions and Consumer Credit were annoyed that Antonakes wasn’t prepared with the exact number of Americans whose data has been collected, saying it was an obvious question to expect. Despite being asked in previous hearings, the CFPB has never reported the number of consumers whose financial information it has collected.
With national attention on personal privacy and government surveillance in light of recent investigations of the National Security Agency and Internal Revenue Service, Antonakes’s inability to give specifics about consumer data collection frustrated subcommittee members.
“There has been a veil of secrecy around the collecting of data,” said Rep. Sean Duffy (R-Wis.).
“The fact that you are so ill-prepared to answer questions today speaks volumes,” said Rep. Bill Posey (R-Fla.).
Democrats on the committee argued that the CFPB is just doing its job.
“You can’t protect consumers without the capacity of gathering information,” said Rep. David Scott (D-Ga.). “If you limit that capacity for the CFPB it’s like cutting their legs off and then condemning them for being a cripple.”
Data collection, Antonakes agreed, is essential for the CFPB to serve consumers.
“The bureau is a data-driven agency,” he said. “It cannot do its job unless it understands the financial markets it oversees.”
Dodd-Frank prohibits the CFPB from using its information-gathering privilege to obtain “personally identifiable” data unless the consumer provides the information voluntarily.
“The vast majority of the data we collect is anonymous,” Antonakes said. “We are not seeking to monitor individual Americans.”
Personally identifiable financial data, he added, is “exceptionally limited” in terms of how much is collected and who within the bureau has access to it. Antonakes said the CFPB plans to hold personally identifiable data for about 10 years, then destroy it. But no data destruction plans are in place.
Rep. Carolyn Maloney, the top Democrat on the subcommittee, noted that multiple consumer watchdog groups support the CFPB’s practices for data collection.
“The key will be striking the right balance between the need for sufficient data and the need to protect consumer privacy,” she said.