CFPB Accused of Targeting 5 Million Americans for 'Warrantless' Financial Surveillance

The CFPB says there's nothing objectionable about what they're doing.

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President Barack Obama makes a personnel announcement as Consumer Financial Protection Bureau Director Richard Cordray looks, Jan. 24, 2013.
President Barack Obama makes a personnel announcement as Consumer Financial Protection Bureau Director Richard Cordray looks, Jan. 24, 2013.

Documents published Thursday by Judicial Watch, a government watchdog group, show that the Consumer Financial Protection Bureau aspires to track the financial records of 5 million Americans. The CFPB acknowledges the program, and says there's nothing objectionable about what they're doing.

An outline of the program obtained by Judicial Watch via a Freedom of Information Act shows that the CFPB, created by the 2010 Dodd-Frank financial reform law, plans to use credit information from a large pool of consumers "in a wide range of policy research projects."

"The panel shall include 5 million consumers, and joint borrowers, co-signers, and authorized users. The initial panel shall contain 10 years of historical data on a quarterly basis," the guidelines say.

Contractors selected by the CFPB "shall provide a persistent consumer identifier making it possible to follow consumers over time," the document says. Among the uses of the data will be "surveys on particular products."

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The names, addresses and full account numbers of the 5 million study subjects will be "masked to preserve confidentiality," according to the document, but the ZIP codes, Census block numbers, birth dates and ages of subjects will be recorded.

"The documents speak for themselves," Judicial Watch President Tom Fitton told U.S. News. "Now we have this specific outline of what they're planning, what they're gathering."

Fitton believes the financial data collection is a "more direct assault on American citizens' reasonable expectation of privacy than the gathering of general phone records," revealed earlier this month by former NSA contractor Edward Snowden.

"I don't know what 'consumers' are, but that's how the government treats Americans, [whereas] we're actually citizens with constitutional rights," Fitton said. "This is just the start, 5 million is the start... and anyone can be subject to this."

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The CFPB denies that Americans are being subjected to broad surveillance. Most of the consumer information comes from commercially available data sets purchased from the company Experian. Some data is taken from companies under the agency's supervision. All consumer data is "anonymized" and does not feature specific purchases, according to the CFPB.

"The Bureau's existing data-gathering activities are authorized by the Dodd-Frank Act," a CFPB spokesperson told U.S. News.

"Like other federal regulators, the CFPB is a data-driven agency and the CFPB uses anonymized industry data to better understand the markets it oversees," the spokesperson said. "The consumer credit history data and other information from industry data sources is used by CFPB staff to analyze industry trends, conduct research about household finances, and assess the impact of its proposed rules on consumers and industry. In the credit-card data collection effort the Bureau is not receiving data about individual purchase transactions nor are we receiving any personally identifiable information."

CFPB Director Richard Cordray acknowledged that his agency paid $1.6 million for "about 10 years of credit record data representing about 4 percent of consumers" in a May 23 letter to Sen. Mike Crapo, R-Idaho.

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"[L]et me clarify that the Bureau is not engaged in a 'Big Data Initiative,'" Cordray wrote. "[W]e are spending about $3 million per year to collect [the data], and taking pains to protect privacy."

Government officials similarly defended the secret court orders requiring phone companies to hand over customer data by pointing to the lack of personal identifiers such as names and Social Security numbers.

Contracts published by Judicial Watch show that in 2012 the CFBP awarded a $4,951,333 contract to Deloitte Consulting for software and instruction, in addition to a $2.9 million contract given to Argus Information & Advisory Services LLC, which manages the consumer database. A contract worth up to $8,426,650 was signed with Experian, the data-collecting firm.

Fitton, the Judicial Watch leader, said the CFPB is collecting the data "under the guise of their efforts to protect consumers." The documents, he said, are a "bombshell" exposure. His group is reviewing the documents and considering litigation if any details were omitted, he said.

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