Sen. Elizabeth Warren (D-Massachusetts) has written to the head of the Consumer Financial Protection Bureau questioning his decision to stop data collection. She is demanding answers.
On Dec. 4, CFPB Acting Director Mick Mulvaney announced that the collection of all personal information by the regulator would be frozen.
The move came after the
Office of Inspector General for the Federal Reserve Board and CFPB issued a pair of reports about the CFPB’s information security controls.
But in a Jan. 4 letter to the CFPB, Warren complained that the actions are unjustified.
The letter is addressed to “acting director” Leandra English, who Richard Cordray appointed deputy CFPB director on his way out the door, and Office of Management and Budget Director Mulvaney, who
was appointed acting CFPB director by President Donald J. Trump. Warren’s choice of titles highlights the opposing opinions on the left and right about who should be in charge of the agency until a director is confirmed.
“Director Mulvaney claims that the cybersecurity issues at the agency are so serious that it justifies ignoring congressional mandates, but the IG reports on which he bases his claims demonstrate that the agency’s cybersecurity policies are robust and any problems with them are not nearly serious enough to support the action Director Mulvaney has taken,” the letter states.
She added, “I believe Director Mulvaney’s actions are unjustified and that he inappropriately used the reports as a pretext to halt and weaken critical agency functions.”
According to the senator, the CFPB can’t fulfill its core functions without collecting the
personally identifiable information.
In addition to helping consumers resolve complaints, Warren claims the information helps CFPB bank examiners and enforcement lawyers detect improper and unlawful activity and helps the Office of Fair Lending bring lawsuits against financial institutions that discriminate.
“Given how integral these data are to these basic CFPB functions, I fear that the freeze in data collection has in practice fundamentally changed how the CFPB interacts with its regulated entities, particularly in the Division of Supervision Enforcement and Fair Lending,” the letter states. “My staff has obtained internal CFPB documents that confirm these fears.”
The proposed changes will impair examiners’ ability to conduct examinations and lead to fewer examinations each year, according to Warren. She highlighted how examinations have resulted in public enforcement actions against two servicers, a real estate agency and a settlement company this past year. She also cited actions taken against the three major credit bureaus.
Warren says her sources have told her that CFPB enforcement lawyers are being banned from
reviewing electronic evidence obtained through discovery. In addition, information from records provided by regulated entities is not being uploaded to CFPB systems — which prevents the enforcement team from completing investigations and bringing cases.
Warren is demanding the CFPB respond to a series of questions she presented by Jan. 19 and is requesting that here staff be briefed on the topic no later than Jan. 12.
