FOI Daily Dose: ‘Transparent’ federal agency collects, analyzes, shares U.S. financial transactions without warrant

Judicial Watch found a federal agency created on principles of transparency is spending millions of dollars to collect and analyze U.S. financial transactions without a warrant. In a news release June 27, Judicial Watch President Tom Fitton calls the financial surveillance “every bit as serious as the controversy over the NSA’s activities.”

The Consumer Financial Protection Bureau (CFPB) was founded in July 2011 to help Americans use financial products and services by ensuring “that prices are clear up front, that risks are visible, and that nothing is buried in fine print,” their website said.

But when CFPB Director Richard Cordray testified about the agency’s data collection and use on April 23 in a semiannual report to Congress, the U.S. Chamber of Commerce accused it of breaking the law by demanding account-level data without a warrant or a National Security Letter, according to JD Supra Law News.

Judicial Watch filed a Freedom of Information Act request with the CFPB on April 24, asking for records about their personal financial data collection program.

The documents explain CFPB’s initiative to collect credit information about a nationally representative panel of five million consumers, joint borrowers, co-signers and authorized users “for use in a wide range of policy research projects.” CFPB contractors may also share credit card data with “additional government entities.

A news release said the documents reveal:

  • Overlapping contracts with multiple credit reporting agencies and accounting firms to gather, store, and share credit card data
  • 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.”

In April, Cordray made the case that the CFPB needs “big data” to keep up with other financial institutions and protect consumers in the financial marketplace, JD Supra Law News reported.

He said the data are “anonymized” and not connected to individuals, much of the data is already accessible to firms through commercial resources, other regulators have used the same sources in the past and the data are essential to CFPB’s congressionally mandated work.

Kara Hackett is SPJ’s Pulliam/Kilgore Freedom of Information intern, a freelance writer and a free press enthusiast. Contact her at khackett@spj.org or on Twitter: @KaraHackett.

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