The U.S. Department of the Treasury has proposed a new recordkeeping system for the Consumer Financial Protection Bureau (CFPB) implementation team. This follows the recent Treasury announcement, reported in an earlier legal alert, of a memorandum of understanding with the Conference of State Bank Regulators—and may foreshadow additional CFPB rulemaking before the Bureau begins operations, set for July 21, 2011, and before President Barack Obama appoints, and the Senate confirms, a CFPB Director.
On January 10, 2011, Treasury published a Notice in the Federal Register proposing a database system to be used by the CFPB implementation team to house complaints regarding consumer financial products and services. The system would be effective February 9, 2011, months before July 21, 2011, the "designated transfer date." This may signal an interest in preparing to initiate enforcement actions on or shortly after the designated transfer date.
According to the Notice, the Dodd-Frank Wall Street Reform and Consumer Protection Act "grants Treasury certain 'interim authority' to help stand up" the CFPB. Perhaps in response to the Notice, Representative Randy Neugebauer (R-TX), of the Financial Services Committee and Chairman of the Oversight and Investigations Subcommittee, sent Elizabeth Warren a letter on January 18, 2011, seeking detailed information about the nascent CFPB, including organizational structure and plans for rulemaking procedures, and an update on naming a Director. Ms. Warren leads the CFPB implementation team.
The database would house details about complaints and inquiries made to the CFPB implementation team, as well as complaints to the prudential banking regulators and Federal Trade Commission that have been referred to the team. The Notice did not address whether the database would include complaints obtained through "crowd-sourcing," that is, scouring social media sites, such as Twitter, Facebook, and blogs, for consumer complaints. Ms. Warren made news last fall by stating that the CFPB would use crowd-sourcing to identify areas of consumer financial protection issues.
Database information will be stored electronically, with data fields including individual name, address, phone number, Social Security number, and account numbers. The information about individuals is subject to the Privacy Act, 5 U.S.C. Section 552a.
The Privacy Act allows federal agencies to disclose individuals' information in certain circumstances if such disclosure is specified for a "routine use." Treasury identifies 16 "routine uses" for CFPB team information, including disclosure to third parties to obtain information needed for a response to or referral of a complaint; to courts; to congressional offices solely so they may respond to the individual; to the prudential banking regulators and FTC, as directed in Section 1013(b)(D)(3) of the Dodd-Frank Act; and to complainants, at Treasury’s discretion, seeking information regarding investigations or cases arising from their complaints.