Cordray, Senate Committee Clash over CFPB Data Collection

The ""Consumer Financial Protection Bureau's"":http://www.consumerfinance.gov/ (CFPB) ambitious effort to build a National Mortgage Database was not taken lightly by lawmakers during a Senate committee hearing Tuesday.

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Senators expressed discomfort over the idea of having a federal agency track consumer behavior, despite CFPB director Richard Cordray's continued emphasis on the anonymity the database will provide to individual consumers.

The National Mortgage Database is a ""joint"":https://themreport.com/articles/federal-agencies-unite-to-create-national-mortgage-database-2012-11-01 effort with the Federal Housing Finance Agency (FHFA) and will include information such as borrower profiles, payment history, and the mortgage product and terms, but will not provide information that would give away the personal identities of the borrowers, according to the agencies.

Sen. Mike Johanns (R-Nebraska) expressed concern over the idea that somehow, someway, the government is getting control over information on how people pay their mortgage.

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Johanns also bluntly stated that to many people, the idea of the database is going to sound ""creepy"" and people are going to be bothered by the fact that there is a federal agency that is collecting data on the behavior of individuals.

Throughout the hearing, Cordray responded to privacy concerns by stressing consumer information will be anonymized and individuals will not be personally identifiable, explaining the bureau has no interest in watching individual consumers, but instead holds an interest in understanding how financial products impact consumers.

Cordray also explained that without the database, the agency can't do its job.

""You have to have information about consumers if you're going to understand what is going on in the consumer marketplace. There's no two ways about this,"" he said.

He also added that if Congress wants the bureau to write rules, the CFPB needs to have aggregate data and information on the market.

""If we don't have data and information ... we can't do that and we can't do our job, and you would be upset with us and rightly so,"" he explained.

One database on the consumer marketplace that the bureau has made available is its ""Consumer Complaint Database"":https://themreport.com/articles/cfpb-launches-expanded-database-of-consumer-financial-complaints-2013-03-28, which was recently expanded in March. According to Cordray, the main complaints found in the database were related to mortgage servicing. Second were credit card complaints.

He also added that the practice of dual-tracking is a great concern, noting that CFPB's new servicing rules that take effect in January 2014 will make a significant difference.