By M.D. Kittle | Watchdog.org
While the domestic spying National Security Agency has been under the red-hot political spot light, another quasi-governmental agency has quietly gone about the business of collecting nearly 1 billion U.S. credit card records without consumer consent.
The Consumer Financial Protection Bureau, CFPB, unlike the NSA, operates with no congressional oversight and with little public transparency, even as it demands complete transparency from the businesses it targets.
As Brian Wise puts it, the rogue agency created under the Obama administration to protect consumers now serves as “judge, jury, and executioner” in determining winners and losers in U.S. business and consumption.
(Does the CFPB know too much?)
Wise is senior adviser to the U.S. Consumer Coalition, a free-market consumer rights advocate. The coalition has documented hundreds of cases of abuse by Operation Choke Point, an Obama initiative overseen by the Consumer Financial Protection Bureau that targets merchants, such as gun dealers and payday lenders, who don’t fit into the administration’s idea of what an American business should be.
“Literally, this agency can investigate, can enforce, and can make the judgment against any individual company or individual citizen that they say is violating the law,” Wise told Watchdog.org this week as the U.S. Senate passed a bill to scale back the NSA’s sweeping surveillance of American phone records. President Obama signed the bill into law a few hours later.
But reform of the shadowy Consumer Financial Protection Bureau has been slow. Even if Congress does come to terms, political observers say it’s unlikely Obama will sign any reform bill of the agency that has his fingerprints and those on the far-left wing all over it.
“These are threats (to consumers and businesses) that have been well thought out by a very activist wing of the Democratic Party,” Wise said. “In order for them to be stopped, Americans on both sides of the aisle need to stand up and say, “This is not the America I believe in.’”
The record shows the NFPB has collected data from more than 85 percent of all credit cards issued in the United States.
Last year, a congressional hearing found CFPB officials were working with the Federal Housing Finance Agency to mine data on the 53 million residential mortgages taken out by Americans since 1998.
The information collected goes beyond names. It also grabs individual’s Social Security numbers, their race, religion, personal financial information, and even the GPS coordinates of their homes, U.S. Rep. Jeb Hensarling, R-Texas, has said. “A breach of this database could cause untold harm to consumers by the very agency that purports to protect them.”
Richard Cordray, the agency’s director, has said CFPB is only collecting the data to protect consumers from fraud and predatory lending practices, but Wise and other critics say the tactics used have Big Brother written all over them.
In many ways, Wise said, the consumer data mining project is worse than the NSA’s surveillance program.
“The NSA only knows who you called and when you called them. The CFPB potentially knows where every single dollar of your money has been spent,” he said. “The CFPB can realistically know when your wife is pregnant before you do. All the NSA would know is when you called your wife last.”
Beyond the creepiness factor is the security risk such an extensive data-collection campaign subjects consumers to.
At the congressional hearing, Rep. Randy Neugebauer, R-Texas, asked Cordray if he could “personally guarantee that the consumer information is 100 percent secure?”
Cordray could not, although he said CFPB works to safeguard the information it collects on Americans.
Neugebauer said it appeared the agency and the NSA are “in a contest of who can collect the most information.”
The CFPB program doesn’t ask for consent, and consumers aren’t allowed to opt-out.
During last year’s congressional hearing into the CFPB, Rep. Sean Duffy, R-Wisconsin, asked Cordray if he would object to seeking permission from consumers before the agency collects and monitors their information.
“That would make it impossible to get the data,” Cordray said.
Wise said the spying program exceeds the CFPB’s statutory authority in its demands for “huge” quantities of data “regarding individual consumers’ financial transactions on an ongoing, real-time basis.”
While congressional members like Duffy have pushed for reforming the agency, particularly in attempting to bring congressional oversight to its budget, the pace of change has been slow.
Wise said it’s incumbent on Congress to move quickly, if members don’t want the American people to know what they’re charging on their personal credit cards.
“I would bet there’s a lot of congressmen out there that have some line items on their credit cards they don’t want to be released to public,” he said. “The way this administration protects data in this country, I would bet that will be a prime moving target in the future.”