CFPB to Resume Data Collection After Data Security Review

By Evan Weinberger

Acting Consumer Financial Protection Bureau Director Mick Mulvaney on May 31 said he plans to restart collecting consumers’ personal information, ending a hold on that collection he put in place soon after taking over the bureau.

Mulvaney said in an email to staff at the bureau obtained by Bloomberg Law that an outside vendor had determined that the CFPB’s information security systems “appeared to be well-secured” following an “exhaustive” review. While there were some changes that needed to be made to the way the CFPB handles data protection, the bureau is putting in place fixes recommended by the outside experts, Mulvaney’s email said.

That assurance was enough that Mulvaney will allow bureau to resume collection of sensitive personally identifiable information, the email said.

“This process has been an important exercise in holding ourselves to the same high standards to which we hold the entities we oversee,” Mulvaney’s email said.

Mulvaney, who also serves as director of the Office of Management and Budget, put in place the hold on collecting personally identifiable information soon after President Donald Trump named him acting CFPB director on Nov. 24.

In announcing the freeze, Mulvaney cited concerns over the CFPB’s data protection tools, but critics feared it was aimed at hobbling the bureau’s research and oversight of consumer finance markets.

Complaint Snapshot Returns

Another CFPB feature also sprang back to life on May 31.

Under former Director Richard Cordray’s leadership, the CFPB published regular snapshots highlighting consumer complaints.

Those releases had gone dormant under Mulvaney.

However, the bureau released its first consumer complaint snapshot under its new leadership, this one highlighting problems in the debt collection industry. Mulvaney has said the bureau is working on new rules for debt collectors.

According to the bureau’s report, consumers have submitted approximately 400,500 complaints to the CFPB about debt collection.

Debt collection complaints made up 27 percent of all complaints submitted to the CFPB’s public complaint database in March 2018, the bureau’s snapshot report said.

Among the debt collection problems that were reported to the CFPB were attempts to collect debts either in the wrong amount or that were not incurred as well as incorrect reports to consumer credit reporting agencies.

How many consumer complaint snapshots the CFPB will release in the coming months remains an open question.

Mulvaney has repeatedly said that he intends to shut down the public portion of the consumer complaint database amid industry concerns that the complaints are not verified. Consumer advocates say that by doing so he would be shutting off an important tool for consumers to find out about potential problematic companies and for outside researchers to study markets.

To contact the reporter on this story: Evan Weinberger at eweinberger@bloomberglaw.com

To contact the editor responsible for this story: Michael Ferullo at mferullo@bloomberglaw.com

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