The Consumer Financial Protection Bureau is collecting a huge database of consumers financial transactions
While the National Security Agency’s (NSA) unconstitutional spying on Americans’ communications has been getting most of the press lately, another federal agency has been quietly — and illegally — vacuuming up Americans’ financial data: the Consumer Financial Protection Bureau (CFPB).
Created by the 2010 Dodd-Frank Act, the CFPB has been operating for just under two years but has already managed to exceed its statutory authority, issuing demands for “huge quantities of data regarding individual consumers’ financial transactions on an ongoing, real-time basis,” according to a June 19 letterto CFPB director Richard Cordray from David Hirschmann of the U.S. Chamber of Commerce’s Center for Capital Markets Competitiveness.
Bloombergreported in April:
Bureau researchers are assembling data from across the financial landscape, according to a review of government records. Credit-card information from nine banks will be stored and analyzed by Argus Information & Advisory Services LLC, a White Plains, New York-based consultancy that won a $15 million contract for the work, procurement documents show…
As part of a separate industry-wide review, banks are being ordered to provide records of credit-card add-on products including credit monitoring and debt cancellation, according to two people briefed on the matter. And last year, the bureau persuaded banks to submit data on checking-account overdrafts.
Additionally, the CFPB is “buying records from outside the banking industry,” the story continued. It has a contract with an Ireland-based credit-monitoring company for “data on 5 million to 10 million consumers” and another with a Florida-based credit-reporting agency for data on payday loans. The bureau “is also building a mortgage database that will integrate consumer credit information with loan and property records.”
“It’s credible to say that within the next year, CFPB will be the best place for consumer finance data,” the bureau’s assistant director for research, Sendhil Mullainathan, told Bloomberg. “Anybody who wants to do research on consumer finance will want to be there.”
“This lack of candor and transparency of what the agency is doing and how it intends to use this personal financial data is troubling,” Sen. Mike Crapo (R-Idaho), ranking member of the Senate Banking Committee, told Cordray during an April 23 hearing. “The bureau was founded with a mission to watch out for American consumers, not to watch them.”
Cordray, naturally, told the committee that Americans have nothing to worry about. “The notion that we’re tracking individual consumers or — or somehow invading their privacy, I think is quite — quite wrong,” he said, likening the CFPB’s data-collection activities to private-sector practices and talking up the bureau’s privacy safeguards.
Some elected officials have taken notice of what columnist George Will termed “the CFPB’s general lawlessness.”
In addition to grilling Cordray during the April hearing, Sen. Crapo sent him a letter on May 16 asking for “a full and thorough legal analysis to ascertain [the CFPB’s] authority to engage in such sweeping collection of consumers’ financial information.”
Sen. Mike Enzi (R-Wyo.) said in a June 18 press release, “The NSA claims it is protecting you from terrorists. The consumer protection bureau claims it’s protecting you from banks. At what point does ‘protection’ become power or control?”
Unfortunately, as much as lawmakers may bluster, there is very little they can do to rein in the CFPB.
“Congress has less control over this agency than the National Security Agency because authors of the bill that created the consumer bureau gave it funding not through Congress, but through the Federal Reserve,” Enzi explained.
Judicial Watch announced that it has obtained records from the Consumer Financial Protection Bureau (CFPB) revealing that the agency has spent millions of dollars for the warrantless collection and analysis of Americans’ financial transactions. The documents also reveal that CFPB contractors may be required to share the information with “additional government entities.”
Overlapping contracts with multiple credit reporting agencies and accounting firms to gather, store, and share credit card data as shown in the task list of a contract with Argus Information & Advisory Services LLC worth $2.9 million
An “indefinite delivery, indefinite quantity” contract with Experian worth up to $8,426,650 to track daily consumer habits of select individuals without their awareness or consent
$4,951,333 for software and instruction paid to Deloitte Consulting LLP
A provision stipulating that “The contractor recognizes that, in performing this requirement, the Contractor may obtain access to non-public, confidential information, Personally Identifiable Information (PII), or proprietary information.”
A stipulation that “The Contractor may be required to share credit card data collected from the Banks with additional government entities as directed by the Contracting Officer’s Representative (COR).”
The records were obtained pursuant to a Freedom of Information Act (FOIA) request filed on April 24, 2013, following the April 23 Senate Banking Committee testimony of CFPB Director Richard Cordray.
The full extent of the CFPB personal financial data collection program is revealed in a document obtained by Judicial Watch entitled “INDEFINITE-DELIVERY INDEFINITY-QUANTITY (IDIQ) STATEMENT OF WORK.” Issued by CFPB Contracting Officer Xiaoling Ang on July 3, 2012 the IDIQ document’s stated objective: “The CFPB seeks to acquire and maintain a nationally representative panel of credit information on consumers for use in a wide range of policy research projects… The panel shall be a random sample of consumer credit files obtains from a national database of credit files.”
To accomplish this objective, the CFPB describes the scope of the program accordingly:
The panel shall include 5 million consumers, and joint borrowers, co-signers, and authorized users. The initial panel shall contain 10 years of historical data on a quarterly basis. The initial sample shall be drawn from current records and historical data appended for that sample as well as additional samples during the intervening years [emphasis added] to make the combines sample representative at each point in time.
http://www.thenewamerican.com/usnews/constitution/item/15859-consumer-financial-protection-bureau-nsa-of-the-financial-world
http://www.judicialwatch.org/press-room/press-releases/jw-obtains-records-detailing-obama-administrations-warrantless-collection-of-citizens-personal-financial-data/
U.S. plans to let spy agencies scour Americans' finances:
The Obama administration is drawing up plans to give all U.S. spy agencies full access to a massive database that contains financial data on American citizens and others who bank in the country, according to a Treasury Department document seen by Reuters.
The proposed plan represents a major step by U.S. intelligence agencies to spot and track down terrorist networks and crime syndicates by bringing together financial databanks, criminal records and military intelligence. The plan, which legal experts say is permissible under U.S. law, is nonetheless likely to trigger intense criticism from privacy advocates.
Financial institutions that operate in the United States are required by law to file reports of "suspicious customer activity," such as large money transfers or unusually structured bank accounts, to Treasury's Financial Crimes Enforcement Network (FinCEN).
The Federal Bureau of Investigation already has full access to the database. However, intelligence agencies, such as the Central Intelligence Agency and the National Security Agency, currently have to make case-by-case requests for information to FinCEN.
The Treasury plan would give spy agencies the ability to analyze more raw financial data than they have ever had before, helping them look for patterns that could reveal attack plots or criminal schemes.
The planning document, dated March 4, shows that the proposal is still in its early stages of development, and it is not known when implementation might begin.
Financial institutions file more than 15 million "suspicious activity reports" every year, according to Treasury. Banks, for instance, are required to report all personal cash transactions exceeding $10,000, as well as suspected incidents of money laundering, loan fraud, computer hacking or counterfeiting.
"For these reports to be of value in detecting money laundering, they must be accessible to law enforcement, counter-terrorism agencies, financial regulators, and the intelligence community," said the Treasury planning document.
A Treasury spokesperson said U.S. law permits FinCEN to share information with intelligence agencies to help detect and thwart threats to national security, provided they adhere to safeguards outlined in the Bank Secrecy Act. "Law enforcement and intelligence community members with access to this information are bound by these safeguards," the spokesperson said in a statement.
A recent Time Magazine article...
Networks are most likely giving the government “metadata.” That is, the credit card issuers could provide the NSA details such as an account or card number, where and when a purchase was made, and for how much. Even though the exact items purchased aren’t revealed, Brian Krebs, who blogs at KrebsOnSecurity.com, says “merchant category codes” in such data give clues about what was bought.
If the NSA is collecting data at the processor level, “at that point the transaction gets cleared and posts to an account, so, yes, you can track it down to a person,” Aufsesser says.
The NSA conceivably could — and probably would — be able get the names of individual account holders from banks issuing credit cards. ”I don’t see how you would anonymize it,” says Al Pascual, senior analyst for security, risk and fraud for Javelin Strategy & Research.
How do you feel about the fact that the government has contracts with "multiple credit reporting agencies and accounting firms to gather, store, and share credit card data"?
How do you feel about the fact that your credit card data and other "non-public, confidential information" may be shared with "additional government entities"?
Judicial Watch President Tom Fitton put it very well when he said that this "warrantless collection of the private financial information of millions of Americans is mind-blowing. Is there anything that this administration thinks it can’t do?"
http://www.reuters.com/article/2013/03/13/us-usa-banks-spying-idUSBRE92C12720130313
http://www.activistpost.com/2013/06/multiple-government-agencies-are.html#more