July 2 (Bloomberg) -- The U.S. Senate Banking Committee’s top Republican is asking the investigative arm of Congress to determine whether the Consumer Financial Protection Bureau is acting within its powers in a sweeping data collection effort.
Senator Mike Crapo, an Idaho Republican, made the request to the Government Accountability Office in a letter dated today in which he called for a study of the purpose, scope and use of the data sought by the bureau. He also asked the GAO to look at the legal authority for collecting the information, the security of the data and the cost of collecting the material.
“The size and scope of this data collection warrant proper government oversight to both guard consumers’ privacy and ensure that the CFPB is acting within its existing authority,” Crapo wrote to GAO Comptroller General Gene Dodaro.
Banks have complained about the data collection and the U.S. Chamber of Commerce accused the bureau of breaking the law in collecting detailed information on individual credit-card accounts. Consumer Bureau Director Richard Cordray has said the collection of credit-card account data is critical to the agency’s mandate.
“Simply put, we cannot effectively regulate that which we do not understand,” Cordray wrote in a May 23 letter to Crapo. “When collecting information necessary to perform our regulatory functions, we seek to limit to the greatest extent possible any burdens on market participants and take all necessary precautions to protect individuals’ personal privacy.”
The Dodd-Frank Act of 2010 directs the creation of a research office at the agency, and authorizes direct collection of information for supervision and enforcement. It specifies that the bureau should get data from available databases to minimize the burden on companies.
Cordray has said the bureau doesn’t disclose personally identifiable information. Crapo wrote today that it is unknown what information the bureau collects, on how many accounts and how the information is being used.
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