CFPB's data-mining on consumer credit cards challenged in heated House hearing
The Dodd-Frank Act, which established CFPB, bars the bureau from collecting personally identifiable financial information on consumers and prohibits it from regulating practicing attorneys.
Bachus said Cordray “exceeded his authority” and violated both provisions if he tried to use the trustee program to obtain files from a company that maintains a document archive for thousands of bankruptcy case attorneys.
“He [Cordray] basically said to me, ‘We needed to do this. This was something we thought we ought to do.’ He never said, ‘OK, it probably violates two provisions of the law,’ a very clear 'Do not do this,' ” Bachus said.
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But the hearing was dominated by charges of an agency operating beyond its legal authority, rife with conflicts of interest, and mismanagement.
Hensarling opened the hearing by noting that CFPB “is designed to operate outside the usual system of checks and balances that applies to every other government agency.”
Rep. Patrick McHenry, a North Carolina Republican, questioned a $5 million contract that CFPB had awarded to a company co-founded by the head of the bureau's Office of Research. He called it a serious case of “conflicts of interest.”
But it was Duffy's confrontation with Cordray over the bureau's credit card data-mining case that caused the most fireworks.
“Why don’t you just level with us?” Duffy told Cordray after the CFPB leader repeatedly refused to say how many credit cards are being reviewed by his agency.
“We’ve been asking these questions over and over and over again. You come in and stonewall, you try to explain, but never do we get answer. Never does America get answers,” Duffy told Cordray.
When Duffy compared CFPB data-mining to the National Security Agency’s surveillance program, Cordray angrily replied that “there is no comparison between the NSA and the CFPB.”
“Oh, there is,” Duffy retorted.
Duffy was able to extract from Cordray the names of five major banks of 110 that issue credit cards.
Duffy said CFPB was trying to gain access to nearly 1 billion credit card users in 2013.
The Dodd-Frank Act, which established CFPB, bars the bureau from collecting personally identifiable financial information on consumers and prohibits it from regulating practicing attorneys.
Bachus said Cordray “exceeded his authority” and violated both provisions if he tried to use the trustee program to obtain files from a company that maintains a document archive for thousands of bankruptcy case attorneys.
“He [Cordray] basically said to me, ‘We needed to do this. This was something we thought we ought to do.’ He never said, ‘OK, it probably violates two provisions of the law,’ a very clear 'Do not do this,' ” Bachus said.
[clip]
But the hearing was dominated by charges of an agency operating beyond its legal authority, rife with conflicts of interest, and mismanagement.
Hensarling opened the hearing by noting that CFPB “is designed to operate outside the usual system of checks and balances that applies to every other government agency.”
Rep. Patrick McHenry, a North Carolina Republican, questioned a $5 million contract that CFPB had awarded to a company co-founded by the head of the bureau's Office of Research. He called it a serious case of “conflicts of interest.”
But it was Duffy's confrontation with Cordray over the bureau's credit card data-mining case that caused the most fireworks.
“Why don’t you just level with us?” Duffy told Cordray after the CFPB leader repeatedly refused to say how many credit cards are being reviewed by his agency.
“We’ve been asking these questions over and over and over again. You come in and stonewall, you try to explain, but never do we get answer. Never does America get answers,” Duffy told Cordray.
When Duffy compared CFPB data-mining to the National Security Agency’s surveillance program, Cordray angrily replied that “there is no comparison between the NSA and the CFPB.”
“Oh, there is,” Duffy retorted.
Duffy was able to extract from Cordray the names of five major banks of 110 that issue credit cards.
Duffy said CFPB was trying to gain access to nearly 1 billion credit card users in 2013.
