Banking & Credit

Privacy and Consumer Groups Support CFPB’s Use of Data

Center for Digital Democracy * Consumer Action * Consumer Federation of America * Consumer Watchdog * Privacy Rights Clearinghouse * Privacy Times * U.S. PIRG

 Statement of Privacy and Consumer Groups In Support of CFPB’s Use of Data, December 16, 2015

Leading national privacy and consumer groups continue to support the Consumer Financial Protection Bureau’s (CFPB) data collection and protection practices.

We reaffirm our support for the CFPB’s acquisition and analysis of commercial databases to help ensure that the public is fairly treated by the financial marketplace.

While much of the data the CFPB uses has no personally identifiable information (PII), we are confident that the CFPB has procedures in place to protect or delete PII when it is obtained.

Please see the full text of our statement of support below, first released in July 2013.

Statement of Privacy and Consumer Groups In Support of CFPB’s Use of Data, 9 July 2013

We support the Consumer Financial Protection Bureau’s (CFPB) acquisition and analysis of commercial databases to help it ensure the public is fairly treated by the financial marketplace.

As leaders of consumer and privacy organizations, we agree that the CFPB needs to use the wide range of data available to financial institutions and services in order to identify best practices and necessary safeguards.

Many of the datasets purchased by the CFPB include no personally identifiable information (PII), in contrast to the detailed data routinely acquired by financial services companies. The CFPB has procedures in place to protect or delete PII whenever it is obtained in the course of either supervision or complaint handling.

Banks and other firms all routinely buy, mix and analyze data from data brokers such as Acxiom and a vast host of other data brokers and data miners. Information is collected from social networking sites, from your use of various financial products and payment cards and from your responses to surveys and offers. The bank-purchased data sets can be used to help track a consumer wherever they are online, including when using mobile devices. Such data techniques enable financial marketers to compile profiles of consumers, so they can be targeted—in realtime—for payday loans, higher interest rate credit cards, and other products.

We acknowledge that the CFPB must protect the data it collects from misuse–but it also needs to be able to fully use it to understand how a consumer’s privacy may be violated. How else can it effectively determine what safeguards are required for financial consumer protection as the growing sophisticated use of data further transforms the delivery of products and services? Why should consumers have the one agency that’s supposed to protect them be unilaterally disarmed from using data to protect their privacy? As privacy leaders, we believe that the actual threats to consumer privacy include the massive and largely unregulated collection and use of data about consumers by powerful commercial corporations including banks.

As Director Cordray has testified, all the other financial regulators use similar datasets in their regulation and supervision. We agree with his statement that “Data collected by the U.S.

Consumer Financial Protection Bureau doesn’t invade individuals’ privacy, is a vital regulatory tool and mimics techniques already in wide use by the private sector.”

We respectfully urge that CFPB continue its work to ensure that in today’s data-driven financial marketplace, consumers have the privacy and other protections they deserve.

For information: Jeff Chester, CDD, jeff@democraticmedia.org or 202-494-7100; Ed Mierzwinski, U.S. PIRG, edm@pirg.org or 202-461-3821; Susan Grant, CFA, sgrant@consumerfed.org or 202-387-6121.