Consumer Financial Protection Bureau Director Richard Cordray today came under scrutiny from the Senate Banking Committee as to how much research into consumers’ finances is “too much.”
Saying the research was becoming “downright creepy,” Senator Mike Johanns (R-Neb.) expressed concern over too much delving into the finances of Americans.
“People are going to worry about this fed agency collecting data on you, me…paying off a mortgage, paying credit card bills; I think it’s uncomfortable,” Johanns said.
Cordray defended the research indicating it is necessary to understand consumer behaviors before writing rules about the financial products they use.
“Big data is the cutting edge of research and analysis in every field that involves analytics,” Cordray said. “Every company is gathering and crunching as much data as they can.”
The questions followed a Bloomberg report last week indicating the agency would spend $20 million on independent contracts to collect data on 10 million consumers.
“You want us to write rules,” Cordray said. “If we dont’ have the data and information, we can’t do that.”
The panel continued to press the CFPB chief on the level of research into the consumers the agency protects. One mechanism the CFPB has used to compile information is a consumer complaint database that spans mortgage complaints and reverse mortgage complaints more specifically. A mortgage database is also under way as an initiative of the CFPB launched this year.
“It seems there is a big question as to how the government should be involved in big data,” said Senator Mike Crapo (R-Idaho).
The bureau, which has become the subject of ongoing scrutiny due to its leadership structure and the recess appointment of Cordray as director stressed the need for the bureau’s actions and future efforts toward enforcement as well as education.
“We’re going to be much more aggressive,” he said. “We have to make available the tools to people to better manage their finances. We don’t want to have a society where people make decisions and come to our “tell your story” line and talk about how they regret their decision.”
Written by Elizabeth Ecker