Inspector General Completes Review, Rejects Mulvaney Attack on CFPB Data Collection
When Mulvaney Became CFPB “Acting Director,” He Froze Data Collection, an Attack on the Bureau’s Ability to Hold Wall Street Special Interests Accountable
WASHINGTON, D.C. – The Office of the Inspector General for the Consumer Financial Protection Bureau (CFPB) issued a report last month to little fanfare showing the bureau has “implemented” a program that addresses “privacy requirements and security risks” associated with handling private data. The report noted that the CFPB has “documented privacy policies and procedures covering a wide range of topics.” Such data collection is essential to the CFPB’s efforts to stop discriminatory lending practices and identify financial wrong-doing by big banks, predatory lenders, and other Wall Street special interests.
The report makes short shrift of the concerns raised by CFPB “Acting Director” Mick Mulvaney, exposing his freeze on the bureau’s data collection practices as nothing more than a proxy fight in his relentless war on the CFPB’s ability to protect consumers and hold bad financial actors accountable.
“The inspector general’s report is clear – the CFPB has programs in place to make sure privacy and security issues are addressed when it comes to data collection – an essential tool the bureau needs to protect consumers from wrong-doing by big banks, predatory lenders, and other Wall Street special interests,” said Karl Frisch, executive director of Allied Progress.
He continued, “Mick Mulvaney’s attack on CFPB data collection has been nothing more than a proxy fight in his relentless war on the bureau’s ability to protect consumers and hold bad financial actors accountable. He believes the CFPB should be looking out for the Wall Street special interests that gave him $1.3 million in campaign cash, not consumers. It is time for Mulvaney to end his freeze on CFPB data collection and give the bureau’s enforcement officials the tools they need to do their jobs.”
BACKGROUND:
- Inspector General Report Shows CFPB Takes Data Collection Security and Privacy Issues Seriously. The Office of the Inspector General for the CFPB issued a report that showed that the CFPB has “implemented” a program that addresses “privacy requirements and security risks” associated with handling private data. The report noted that the CFPB has “documented privacy policies and procedures covering a wide range of topics.” [Manatt, Phelps & Phillips, LLP, “OIG Audit Addresses Data Security Concerns at the CFPB,” JD Supra, 03/02/18]
- Mulvaney’s Freezing of CFPB Data Collection Was Seen as an Attack on Bureau’s Enforcement Capabilities. When Mick Mulvaney halted the CFPB’s “collection of all personally identifiable information […] The move raised concerns that the bureau’s enforcement actions would be stalled.” Mulvaney wanted to freeze collection until “the CFPB improve[d] its data security systems.” [Kate Berry, “CFPB’s Mulvaney to Warren: Breaches justified data-collection halt,” American Banker, 01/19/18; James Kin and Bowen Ranney, “CFPB data collection freeze impacting CFPB examinations,” Ballard Spahr LLP, 12/15/17]
- Mulvaney’s CFPB Data Collection Freeze Hampered Efforts to Monitor Compliance of Financial Institutions. The move to freeze data collection caused confusion among enforcement staff and “hamper[ed]…efforts to monitor financial firms for compliance with consumer protection rules.” [Jessica Eisinger, “The Consumer Financial Protection Bureau’s declaration of dependence,” ProPublica, 02/15/18]
- CFPB Data Collection Helps Identify Wrong-doing by Financial Institutions. One CFPB attorney described the move as “‘freezing enforcement.'” The CFPB relies on personally identifiable information to determine whether financial institutions, like Wells Fargo, are “taking advantage” of customers. [Jessica Eisinger, “The Consumer Financial Protection Bureau’s declaration of dependence,” ProPublica, 02/15/18]
- CFPB Data Collection Helps Identify Discriminatory Lending Practices. The CFPB has used consumer data to “help the agency identify discrimination and other industry misconduct, and can serve as a basis for writing rules.” [Yuka Hayashi, “New CFPB Chief Curbs Data Collection, Citing Cybersecurity Worries,” The Wall Street Journal, 12/04/17]
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