CFPB Creating National Database

The Consumer Financial Protection Bureau is expected to tell Congress it will be carefully protecting individuals’ privacy as it builds a massive database on consumer financial behavior and on home mortgages.

CFPB acting deputy director Steven Antonakes, who is testifying before the House Financial Services Committee this morning, is expected to try to ease concerns by both consumers and financial institutions by insisting the agency will try to collect as much information as it can by combining currently available public data, according to a prepared statement issued by the CFPB. The agency, says Antonakes, also will seek out third-party vendors to collect or provide data whenever possible to reduce the burden on regulated institutions.

Antonakes' testimony comes as the CFPB is creating a national mortgage database that will combine information from all lenders, consumers and regulators. The data will be used to gauge compliance with consumer rules, to measure the rules’ effects on consumers, and to develop new policies and regulations. The agency has contracted with Experian to create the database.

The mortgage database will provide loan-level data of a random and representative sample of mortgages, the bureau said. The sample is being drawn from commercially available data. The database reportedly will not contain personal identifiers, such as names or Social Security numbers, and the agencies will implement safeguards against potential re-identification of individual borrowers. Much of the data has already been collected by HUD and the Federal Housing Finance Agency as part of the ongoing efforts to gauge and combat defaults and foreclosures.

Credit unions are concerned about the agency’s expanded information reach. NAFCU told lawmakers it has concerns about the security of the data being collected by the CFPB. “In short, unfortunately the federal government, much like several private sector industries, has been responsible for the unauthorized release of sensitive personal information in the past,” said Dan Berger, chief lobbyist for NAFCU, in a letter to leaders of the financial services panel. “With a constantly shifting regulatory environment driven by an inordinate amount of new rule writing, the last thing credit unions should have to worry about is the personal information of their member-owners being lost or stolen at the hands of the government.”

In addition to the mortgage database, the CFPB is creating an Office of Research that will include researching, analyzing and reporting on the markets for consumer financial products or services.