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  • Cloakroom Confidential: Consumer Financial Protection Bureau Putting Consumers At Risk

    The Consumer Financial Protection Bureau is clearly misnamed. They are seeking to put consumers financial data at risk and attempt ion to violate the natural right to privacy of Americans who choose to take out loans.

    The House Subcommittee on Oversight and Investigations held a hearing on December 16, 2015 to study the CFPB’s data collection program. The CFPB collects data and they claim they have authority under the Dodd-Frank law to scoop up, according to the committee, “arbitration case records, automobile sales records, consumer credit report information, credit card details and credit scores, mortgage loan-level data, private student loan data, and payday loan information.” The problem is when the government has this information, two issues should be discussed and debated – privacy and data security.

    Former Speaker of the House Newt Gingrich testified at the Hearing about the structural problems with the CFPB and the lack of accountably build into the law for these bureaucrats:

    Today the Consumer Financial Protection Bureau is so far outside the historic American model of constitutionally limited government and the rule of law, that it is the perfect case study of the pathologies that infect our bureaucracies at the federal level.
    It is dictatorial.
    It is unaccountable.
    It is practically unrestrained in expanding on its already expansive mandate from Congress.
    And it is contemptuous of the rights, values, and preferences of ordinary Americans.
    The CFPB is all of these things, as are many of our large, destructive bureaucracies in this city — a huge problem in its own right.
    But the CFPB is an especially good symbol of these pathologies because of its unique structure among regulatory agencies. In the Dodd-Frank Wall Street Reform and Consumer Protection Act that created the Bureau, Congress–very unwisely, in my opinion, gave up two of its core Constitutional powers for reining in executive branch agencies.
    First, the CFPB is not subject to the annual Congressional appropriations process, and instead is funded out of a fixed portion of the Federal Reserve’s budget.
    And second, its director can be fired only by the president–and then only under limited circumstances–because Dodd-Frank made him unable to be removed by Congress.
    For all practical purposes, this means the Bureau is free to do whatever it wants within the broadest imaginable interpretation of its authority, without fear of losing its funding or its leadership.
    This is a very dangerous recipe for petty dictatorship, and is completely foreign to the American model.

    Gingrich points out that there are serious privacy concerns with what the CFPB is doing today. “The CFPB is prohibited in Section 1022 of Dodd-Frank from collecting personally identifiable information on Americans, but the Bureau is doing so anyway. And it is doing so at a massive scale that rivals the NSA’s most controversial collection programs, but for much less compelling reasons.” The natural right to privacy of all Americans is not waived because a consumer wants to get a loan for a car or applies for a credit card. The idea of the 4th Amendment is that a person is secure in his or her personal papers and most Americans consider emails and contractual arrangements with credit card companies, as well as credit card records, as an act that implicates personal privacy.

    Data security is another issues and most Americans don’t trust the government to keep this information private. This hearing was an important means to expose government over reach and the increasingly dangerous activities of the misnamed Consumer Financial Protection Bureau.


    Cloakroom Confidential

    Cloakroom Confidential

    Cloakroom Confidential was a longtime Capitol Hill staffer and insider who has contacts in the House and Senate at the highest levels.

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