The federal Consumer Financial Protection Bureau is coming to Mississippi Wednesday and Thursday with a public forum on "access to information." A vital question for Mississippians to ask leaders of the bureaucracy at the venue, being held from 11 AM to 1 PM tomorrow at Mississippi Valley State University in Itta Bena, is why the CFPB wants so much access to their personal information.
The CFPB, created by the Dodd-Frank financial overhaul to defend consumers in the credit card and mortgage markets, is building a database of sensitive individual financial information that rivals that of the National Security Agency. According to Bloomberg News, the CFPB already has "anonymous information about at least 10 million consumers."
On top of this, at a U.S. House hearing in July, CFPB acting deputy director Steven Antonakes revealed that bureau hopes to monitor 900 million credit-card accounts. This represents nearly 80 percent of the U.S. credit-card market. Sen. Mike Crapo (R-Idaho), a consistent advocate of privacy who called for limits on the surveillance provisions of the PATRIOT Act during the Bush administration, declared, “The bureau was founded with a mission to watch out for American consumers, not to watch them.”
CFPB director Richard Cordray, who will be at the forum as well as CFPB meetings in Itta Bena and Jackson that are closed to the public, has defended the database by saying that the CFPB blocks out "personally identifiable information" such as Social Security numbers, and that these mounds of data are needed for the CFPB to "understand" the markets it is regulating.
On the first point, the process is for "anonymizing" the data unclear, and the CFPB is evasive in answering the questions raised by the agencies’ contracts with private data mining firms. A contract obtained by the conservative watchdog group Judicial Watch indicates that an individual’s age, postal code, and Census block identifier are all included in the CFPB database.
The CFPB also has not said whether and under what circumstances it will share this data with other government agencies. Privacy experts add that handling and storage of such voluminous amounts of confidential data will almost certainly be vulnerable to hacking and abuse.
As to whether all this info is necessary to protect consumers, the CFPB has yet to explain why it can’t “understand” markets with statistical sampling of at most a few thousand consumers. That’s the way other federal and state agencies have done it for decades.
At the same time the CFPB demanding the most intimate financial information of consumers, it is fostering excessive secrecy about its own activities. It is holding daylong meetings in Itta Bena on Wednesday and at the Hilton Garden Inn in Jackson on Thursday with private sector activists and academics on its Consumer Advisory Board, but most Mississippians will not be invited. In describing the two-day agenda, the CFPB states that "only the 11 AM to 1 pm Public Session will be open to the public." Apparently, not even a video of these "closed sessions" will be available to the public. The CFPB only states that it will "issue a summary of the board's activities during the closed session."
This secrecy may be in violation of federal laws promoting openness in government. In a letter objecting to similar meetings of the CFPB's advisory board, the Community Financial Services Association noted that the Federal Advisory Committee Act allows such meeting to exclude the public "only where information to be discussed involves trade secrets, classified government materials or national security matters related to foreign policy." As the letter points out, these are" topics that are never within the purview" of the CFPB.
If the CFPB wants the trust of Mississippi and American consumers to foster transparency in markets, it must be more open in its own affairs. And it must stop nosing around in the personal financial matters of the individuals it was created to serve.
Michael Mayfield, a research associate at the Competitive Enterprise Institute and senior at Mississippi State University, contributed to this post.