Collecting broad swaths of Americans’ financial information is critical to monitor credit markets and protect consumers, the head of the Consumer Financial Protection Bureau (CFPB) said on Thursday.
Richard Cordray said his agency’s controversial data collection should not alarm businesses or the public and defended the practice from critics who have likened it to domestic spying programs.
The information is being used to watch markets, survey its work and find sectors that are under regulated, he said.
“We have to have data to be able to do our job,” Cordray said at an event sponsored by Politico.
“Having the data to both understand what we’re doing and then be able to assess its impact over time, which may require revisions as we go forward over the next few years, is critical to us doing our work in an informed and intelligent way.”
Still, Cordray said that its collection of data “requires the closest attention from us” to ensure that Americans’ privacy isn’t being invaded and that their personal information is safe.
“Nothing would undermine the agency more than for people to get a sense that we aren’t paying attention to privacy and security, [that] we aren’t complying with federal law in those respects,” he added.
Republicans in Congress and business organizations have criticized the agency for collecting Americans’ data. Some critics have compared its collection to the surveillance done by the National Security Agency, though CFPB officials have denied that their work is anything like the spy agency’s.
Cordray also said that the CFPB’s programs were different from the data tracking that financial institutions sometimes do as part of their marketing. Those institutions, he said, are “trying to find out what I’m personally going to do in the future and try to market to me. That’s an entirely different approach than what we’re trying to do.”
He said that the CFPB was looking at “aggregate” data to chart patterns and trends in the market.
“What we care about is what kinds of rates and fees [consumers are being charged], what kind of pricing mechanisms, that sort of thing,” he said. “If we’re going to monitor some of the largest, most powerful financial institutions in the world, we have to keep up and understand what they’re doing to consumers.”