CFPB’s Freeze on Data Collection Holds Up Enforcement

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The Consumer Financial Protection Bureau’s investigation into Wells Fargo Auto’s force-placed insurance scandal is stalled and “has gone nowhere,” according to a source cited by ProPublica in a report about current operations at the regulator.

CFPB officials were initially not permitted to even upload data sent from the bank, thus hindering the beginnings of the investigation, according to three current CFPB employees cited anonymously in the report. Subsequently, the team working on Wells Fargo’s insurance case were granted an exception.

The investigation’s hinderance stemmed from one of Mick Mulvaney’s first decisions as acting director, which was to place a blanket freeze on collecting personally identifiable information (PII). He cited a report from the Federal Reserve Bank’s inspector general from late last year that found sensitive data within the Office of Enforcement should be handled with greater care. A plan to fix the operations was already underway when Mulvaney took office.

The policy had the effect of halting all enforcement, one CFPB official told ProPublica. For example, enforcement officials need to look at PII to check that consumers were in fact charged for insurance they did not need.

Several staffers expressed that the rule caused confusion over who was permitted to view data and whether it applied to just the subpoena of new information or ongoing investigations as well. The freeze has also hindered coordination with state attorneys general as communication has slowed between the bureau and the states.

On Dec. 22, Mulvaney sent a note to staffers that read, “I’ve decided to continue the hold on the collection of PII and other sensitive data.” Although there are some exceptions — such as in the Wells Fargo insurance case — “the default setting is ‘no,’” he continued.

The CFPB was unable to comment by press time. Wells Fargo does not comment on ongoing regulatory investigations, a spokeswoman has previously told AFN.

Many staffers in the bureau now expect the freeze to remain in effect for the duration of Mulvaney’s tenure, according to the report.  

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As Assistant Editor at Auto Finance News, William specializing in compliance, operations, and subprime. As a Brooklyn implant by way of Ohio, he's happy to discuss the triumphs and pitfalls of Cleveland sports as well as the latest music trends. Former bylines include Candy & Snack Today, Inverse, and The Tennessean.

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