Consumer Financial Protection Bureau “acting head” Mick Mulvaney has frozen data collection that is needed for the CFPB to monitor financial companies’ treatment of consumers and hold law breakers accountable. While Mulvaney ordered this freeze under the guise of cybersecurity, the CFPB Inspector General found that the agency outperformed its regulatory peers in this area and the Inspector General’s report did not recommend a halt in data collection.
“The Trump administration’s interim director of the Consumer Financial Protection Bureau said he has frozen the agency’s collection of personal information due to cybersecurity concerns, a step in changing policies criticized by the financial industry.” [Yuka Hayashi, “New CFPB Chief Curbs Data Collection, Citing Cybersecurity Worries,” The Wall Street Journal, 12/04/17.]
“After an edict about data handling from Mick Mulvaney, the man Donald Trump installed as acting head of the agency late last year, the bureau’s enforcement lawyers suddenly found their hands tied, according to three CFPB staffers. The attorneys weren’t permitted to upload information the bank supplied about its auto insurance business, one of the areas in which Wells Fargo has been accused of malfeasance.” [Jesse Eisinger, “The CFPB’s Declaration of Dependence,” ProPublica, 02/15/18.]
“Consider how the data freeze affects bank examinations. Through examinations last year, CPFB caught two different mortgage servicers that hid the process for applying for foreclosure relief from borrowers. It also caught three big credit reporting agencies that misled customers about their credit scores, a lender who got customers through misleading advertisements and then stole from them, and dozens of other companies that were cheating their customers. Once it discovered these frauds, the CFPB set to work making sure the financial institutions stopped these practices and helping consumers to recover without ever going to court.” [Elizabeth Warren, “Misguided data freeze keeps CFPB from doing its job,” American Banker, 01/24/18.]
The CFPB Inspector General reports “found CFPB’s cybersecurity was better than other regulators and steadily improving. When I pressed Mr. Mulvaney on this point in an oversight letter, he did not defend his interpretation of the reports and offered no legitimate explanation for halting bank examinations.” [Elizabeth Warren, “Republicans Remain Silent as Mulvaney’s CFPB Ducks Oversight,” The Wall Street Journal, 03/28/18.]
“One unresolved question is why Mulvaney would take so drastic a step in response to a months-old inspector general’s report. Bank regulators — not to mention other government agencies like the Social Security Administration and the IRS — deal extensively in highly sensitive personal information and have never been subject to such a drastic directive.” [John Heltman, “Is CFPB’s data freeze about security or a political ploy?,” American Banker, 01/10/18.]