Judicial Watch: FOIA release shows CFPB conducting “warrantless surveillance” on consumers

posted at 10:06 am on June 28, 2013 by Ed Morrissey

Get ready for another front on the debate over privacy, consumption, and the trade-off between them.  Yesterday, Judicial Watch announced that they had received data through a FOIA demand that showed warrantless surveillance on 5 million American consumers — not for national-security reasons, but for the new Consumer Financial Protection Board.  The documents show that the controversial panel has contracted out the service of trawling through millions of transactions, emphases in original:

Judicial Watch announced today that it has obtained records from the Consumer Financial Protection Bureau (CFPB) revealing that the agency has spent millions of dollars for the warrantless collection and analysis of Americans’ financial transactions. The documents also reveal that CFPB contractors may be required to share the information with “additional government entities.”

The records were obtained pursuant to a Freedom of Information Act (FOIA) request filed on April 24, 2013, following the April 23 Senate Banking Committee testimony of CFPB Director Richard Cordray. …

The full extent of the CFPB personal financial data collection program is revealed in a document obtained by Judicial Watch entitled “INDEFINITE-DELIVERY INDEFINITY-QUANTITY (IDIQ) STATEMENT OF WORK.”  Issued by CFPB Contracting Officer Xiaoling Ang on July 3, 2012 the IDIQ document’s stated objective: “The CFPB seeks to acquire and maintain a nationally representative panel of credit information on consumers for use in a wide range of policy research projects… The panel shall be a random sample of consumer credit files obtains from a national database of credit files.”

To accomplish this objective, the CFPB describes the scope of the program accordingly:

The panel shall include 5 million consumers, and joint borrowers, co-signers, and authorized users [emphasis added]. The initial panel shall contain 10 years of historical data on a quarterly basis [emphasis added]. The initial sample shall be drawn from current records and historical data appended for that sample as well as additional samples during the intervening years [emphasis added] to make the combines sample representative at each point in time.

What exactly does this mean?  US News and World Report provides the response from the CFPB:

The CFPB denies that Americans are being subjected to broad surveillance. Most of the consumer information came from commercially available data sets purchased from the company Experian. Some data is taken from companies under the agency’s supervision. All consumer data is “anonymized” and does not feature specific purchases, according to the CFPB.

“The Bureau’s existing data-gathering activities are authorized by the Dodd-Frank Act,” a CFPB spokesperson told U.S. News.

“Like other federal regulators, the CFPB is a data-driven agency and the CFPB uses anonymized industry data to better understand the markets it oversees,” the spokesperson said. “The consumer credit history data and other information from industry data sources is used by CFPB staff to analyze industry trends, conduct research about household finances, and assess the impact of its proposed rules on consumers and industry. In the credit-card data collection effort the Bureau is not receiving data about individual purchase transactions nor are we receiving any personally identifiable information.”

CFPB Director Richard Cordray acknowledged that his agency paid $1.6 million for “about 10 years of credit record data representing about 4 percent of consumers” in a May 23 letter to Sen. Mike Crapo, R-Idaho.

“[L]et me clarify that the Bureau is not engaged in a ‘Big Data Initiative,’” Cordray wrote. “[W]e are spending about $3 million per year to collect [the data], and taking pains to protect privacy.”

The first questions here are whether this information is private, and whether this counts as surveillance.  At least according to the CFPB’s response, this seems to involve data that can be transacted by credit-card companies already.  That may be a problem that a CFPB should be fixing rather than exploiting, but nonetheless would not be “surveillance” in the traditional sense.  Nor would it be private, which relates to the earlier issue of NSA surveillance of Internet traffic, at least in part.  Consumers demand free or low-cost services from Internet providers, who then have to figure out methods of monetization for their income.  That ends up with the Googles et al of the world grabbing a lot of our personal data and selling them to the highest bidders, or sharing some of that (if not more than that) with national-security efforts.

That, however, might be understandable in the national-security context.  The CFPB isn’t a national-security agency.  Its mandate is to tighten the leash on the credit and finance markets.  Americans might be willing to trade off privacy for security in some ratio, but if the CFPB has to compile massive databases of transactions to test the outcome of their regulatory activities, then their regulatory activities need to be curtailed.  The creepy Big Brother approach shows just how misguided the Dodd-Frank bill turns out to be — and how creating the kind of top-down power in the CFPB promotes the Big Brother approach.

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Despite the CFPB being only 1/32 Big Brother, on it’s mother’s side, it does have those high peek bones.

Flange on June 28, 2013 at 10:10 AM

DOJ has been doing this with its Hotwatch programme for some time.

Don’t forget: Corday was ‘non-recess-recess’ appointed and Obama’s already lost on his NLRB appointees in the DC Ct of App. The Supreme Court will hear the case next term. If the administration loses, it could very well affect Corday and his decisions, too.

Resist We Much on June 28, 2013 at 10:12 AM

The federales have to be able to know what everybody is buying so they know what to target next.

Steve Eggleston on June 28, 2013 at 10:13 AM

Despite the CFPB being only 1/32 Big Brother, on it’s mother’s side, it does have those high peek bones.

Flange on June 28, 2013 at 10:10 AM

Today’s Comment of the Day™ contest is now over. Nobody is topping Flange.

Steve Eggleston on June 28, 2013 at 10:14 AM

Just hope none of these cases end up before the vain clown Supremes!

We already know shills Buzzy, Breyer, Kennedy, and the warped oddities Kagan and Sotomayor and grinning Benedict Roberts will gladly side with The Reich for their 30 pieces of silver.

viking01 on June 28, 2013 at 10:15 AM

OT:Mornin’ from the Peoples Republic of Colorado(visiting. Home tomorrow.) I’m not commenting much until I’m paroled from Moderation Purgatory.
Twerp out.

annoyinglittletwerp on June 28, 2013 at 10:15 AM

Relax, Citizen, there is government oversight.

In fact right now at this very moment the IRS is conducting oversight on its agents as they target Tea Party groups, and Holder is providing oversight as he investigates himself for criminality.

Back to your lathe, Citizen, your quota of metal widgets has not yet been fulfilled.

Bishop on June 28, 2013 at 10:17 AM

I’m starting to feel like a serf of the federal government, and I don’t like it.

sadatoni on June 28, 2013 at 10:18 AM

IIRC, the CFPB is one of the new boards that is immune to any kind of congressional oversight.

vinman on June 28, 2013 at 10:19 AM

Despite the CFPB being only 1/32 Big Brother, on it’s mother’s side, it does have those high peek bones.

Flange on June 28, 2013 at 10:10 AM

Yes, a dead giveaway, while we worry about the Chinese, we should be worried about the peek-a-nese…

right2bright on June 28, 2013 at 10:20 AM

Consumer Financial Protection Bureau (CFPB)

We protect you by investigating you…

right2bright on June 28, 2013 at 10:21 AM

Yes, a dead giveaway, while we worry about the Chinese, we should be worried about the peek-a-nese…

right2bright on June 28, 2013 at 10:20 AM

Why couldn’t you have waited until tomorrow for that rejoinder? I already awarded today’s Comment of the Day™.

Steve Eggleston on June 28, 2013 at 10:24 AM

I’m starting to feel like a serf of the federal government, and I don’t like it.

sadatoni on June 28, 2013 at 10:18 AM

Let’s spin this instant golden oldie from Barry and the SCOAMTS:

Let’s go serfing now
Everybody’s learning how
You can’t come on a safari with me.

Steve Eggleston on June 28, 2013 at 10:26 AM

One word: Cash.

JellyToast on June 28, 2013 at 10:27 AM

“Hold still, this vivisection is for the greater good.”

Akzed on June 28, 2013 at 10:27 AM

Consumer Finance Protection Bureau could be hit by Supreme Court ruling on recess appointments

Roberts will probably say it’s a tax.

However, if this worthless agency is spying on us, then they probably all are. I wouldn’t be surprised to find out that the EPA is tracking how much gas I buy, or that the Department of Agriculture is watching to see what kind of groceries I buy. Maybe the Arthritis and Musculoskeletal Interagency Coordinating Committee is monitoring what I look up on WebMD and maybe the Institute of Peace is checking up on my internet postings.

A few weeks ago I would have chuckled at this kind of suggestion. I’m no longer laughing.

joekenha on June 28, 2013 at 10:29 AM

Yes, a dead giveaway, while we worry about the Chinese, we should be worried about the peek-a-nese…

right2bright on June 28, 2013 at 10:20 AM
Why couldn’t you have waited until tomorrow for that rejoinder? I already awarded today’s Comment of the Day™.

Steve Eggleston on June 28, 2013 at 10:24 AM

It’s a pretty ripe topic for ridicule.

Flange on June 28, 2013 at 10:33 AM

Roberts will probably say it’s a tax.

However, if this worthless agency is spying on us, then they probably all are. I wouldn’t be surprised to find out that the EPA is tracking how much gas I buy, or that the Department of Agriculture is watching to see what kind of groceries I buy. Maybe the Arthritis and Musculoskeletal Interagency Coordinating Committee is monitoring what I look up on WebMD and maybe the Institute of Peace is checking up on my internet postings.

A few weeks ago I would have chuckled at this kind of suggestion. I’m no longer laughing.

joekenha on June 28, 2013 at 10:29 AM

Roberts’ “reasoning” will be:

Because Obama thought the Senate was in recess, he was exercising his Constitutional power to declare the Senate in recess if the two Houses of Congress can’t agree on a date of recess, and those appointments are “constitutional”.

Unless you pay cash in the black market, the government knows your every move.

Steve Eggleston on June 28, 2013 at 10:35 AM

The documents also reveal that CFPB contractors may be required to share the information with “additional government entities.”

Well that just makes me feel warm and fuzzy. No, wait, it’s nausea. Coff, coff, IRS, coff, coff.

“punish your enemies”

rbj on June 28, 2013 at 10:36 AM

It’s a pretty ripe topic for ridicule.

Flange on June 28, 2013 at 10:33 AM

Very true. After all, we are living in interesting times.

Steve Eggleston on June 28, 2013 at 10:36 AM

They know what brand of toilet paper you buy and how much you use.Ain’t it grand?

docflash on June 28, 2013 at 10:38 AM

I’m starting to feel like a serf of the federal government, and I don’t like it.

sadatoni on June 28, 2013 at 10:18 AM

Let’s spin this instant golden oldie from Barry and the SCOAMTS:

Let’s go serfing now
Everybody’s learning how
You can’t come on a safari with me.

Steve Eggleston on June 28, 2013 at 10:26 AM

Dayum! The EPA just closed the beach.

viking01 on June 28, 2013 at 10:39 AM

They know what brand of toilet paper you buy and how much you use.Ain’t it grand?

docflash on June 28, 2013 at 10:38 AM

Worse yet Sheryl Crow gets an official report every morning while Barky sleeps through the CIA security briefing.

viking01 on June 28, 2013 at 10:40 AM

IIRC, the CFPB is one of the new boards that is immune to any kind of congressional oversight.

vinman on June 28, 2013 at 10:19 AM

Yes, and it’s not funded via the federal budget or continuing resolution, it’s funded by direct payments from the Federal Reserve. I don’t understand why that wouldn’t be struck down by a court.

slickwillie2001 on June 28, 2013 at 10:41 AM

Who ISN’T illegally collecting our personal information?

The head of the NSA has already testified under oath that they have conducted ‘data-mining’ operations, collecting personal information of U.S. citizens, ILLEGALLY – without the legal authorization to do so. THAT is a CRIME!

We already know Obama’s campaign manager sat in on IRS meetings and was given Romney’s personal tax info, which he used against Romney during the election. THAT is a CRIME! We also know Harry Reid somehow received some of that same personal information which HE also used to attack Romney from the floor of the Senate. THAT is a crime!

Now we are finding out that other groups/agencies are perpetrating CRIMES in order to not only get their hands on our personal information but to use that informatio for their benefit!

It seems Barack Obama & the government is the criminal Pied Piper, leading the parade of Un-Constitutional / Criminal invasion of privacy, unlawful search and seisure, wire-tapping / ‘data mining’ of onformation of every American citizen!

easyt65 on June 28, 2013 at 10:44 AM

The panel shall be a random sample of consumer credit files obtains from a national database of credit files.”

So… we’re talking individual credit card and loan transactions.

And the search terms will be “tea party” or “GOP candidate” or “general”.

faraway on June 28, 2013 at 10:44 AM

IIRC, the CFPB is one of the new boards that is immune to any kind of congressional oversight.

vinman on June 28, 2013 at 10:19 AM

You recalled correctly.

Difficultas_Est_Imperium on June 28, 2013 at 10:45 AM

“The Bureau’s existing data-gathering activities are authorized by the Dodd-Frank Act,” a CFPB spokesperson told U.S. News.

Oh, it’s authorized. Why didn’t you say so in the first place? That makes all the difference. /s

to better understand the markets it oversees

And there’s the main problem, right there.

This isn’t that bad, as far as privacy goes: this stuff is collated and mined and spreadshat and packaged and sold all the time. It doesn’t have specific info on you in it. It only affects you when you get that good deal offer in the mail – they didn’t get your specific information, but you fit in a certain box defined by analyzing that data and they mail to everyone in that box. (They know you fit in the box based on public information about you, or information they buy elsewhere.)

What makes this a problem is that now the government is going to try and use this information to tweak its Five-Year Plan to make the economy go where it wants and to pick the winners and losers in its regulation lotto. And, it’s a part of the government that is supposed to be “independent” (read, “without oversight from their masters, the people”).

GWB on June 28, 2013 at 10:56 AM

Not ironinc that the administration that claims to be transparent and has increased our debt by over 50% in 5 years is now snooping on us under the guise of consumer financial protection.

This is the modern democrat party folks. We’ve read these books. They hate us and are watching us.

DanMan on June 28, 2013 at 10:59 AM

What are you folks worried about Bluegill and Stoic Patriot are A-OK with this they love their Government Overlords.

RickB on June 28, 2013 at 11:00 AM

“Hold still, this vivisection is for the greater good.”

Akzed on June 28, 2013 at 10:27 AM

http://www.youtube.com/watch?v=aclS1pGHp8o

Enjoy!

questionmark on June 28, 2013 at 11:05 AM

I’m starting to feel like a serf of the federal government, and I don’t like it.

sadatoni on June 28, 2013 at 10:18 AM

Arbeit macht frei, Bruder.

JSGreg3 on June 28, 2013 at 11:14 AM

Hey, if the government isn’t big enough to take everything we have, then how can it be big enough to give us everything we need?

If you homophobes would stop clinging to your guns, your Bibles, and your wallets, we could make some real progress in this country!

There Goes the Neighborhood on June 28, 2013 at 11:15 AM

Trade and commerce between two entities is not considered private? That’s news to me.

Egfrow on June 28, 2013 at 11:18 AM

Consumers demand free or low-cost services from Internet providers, who then have to figure out methods of monetization for their income.

What ?! I FIOS bill is hardly free. Please, direct me to these alleged “free” ISPs you speak of.

deadrody on June 28, 2013 at 11:18 AM

Yes, a dead giveaway, while we worry about the Chinese, we should be worried about the peek-a-nese…

right2bright on June 28, 2013 at 10:20 AM
Why couldn’t you have waited until tomorrow for that rejoinder? I already awarded today’s Comment of the Day™.

Steve Eggleston on June 28, 2013 at 10:24 AM

No, you did right, the original poster was the inspiration…

right2bright on June 28, 2013 at 11:22 AM

DOJ has been doing this with its Hotwatch programme for some time.

Don’t forget: Corday was ‘non-recess-recess’ appointed and Obama’s already lost on his NLRB appointees in the DC Ct of App. The Supreme Court will hear the case next term. If the administration loses, it could very well affect Corday and his decisions, too.

Resist We Much on June 28, 2013 at 10:12 AM

In any administration which respected limits, all ‘non-recess-recess’ appointees would already have vacated their positions, and all their decisions would already be vacated. But I don’t think Obama cares about the potential embarrassment of a SCOTUS slapdown if he can keep getting his way until then.

It makes you wonder what he thinks he can get out of this situation that can’t be rolled back when SCOTUS rules. Maybe he’s counting on it being such a big mess to roll back all decisions by the illegal appointees that the courts will just allow all those decisions to stand.

There Goes the Neighborhood on June 28, 2013 at 11:26 AM

Yes, and it’s not funded via the federal budget or continuing resolution, it’s funded by direct payments from the Federal Reserve. I don’t understand why that wouldn’t be struck down by a court.

slickwillie2001 on June 28, 2013 at 10:41 AM

Because if they did that, they’d have to kill the 2/3rds of the federal spending that is “mandatory” (which, in this case, means it continues by a formula that is not voted on by each succeeding session of Congress).

Steve Eggleston on June 28, 2013 at 11:27 AM

What ?! I FIOS bill is hardly free. Please, direct me to these alleged “free” ISPs you speak of.

deadrody on June 28, 2013 at 11:18 AM

I think the original commenter was referring to content providers like Google, Yahoo, Facebook, et al.

Steve Eggleston on June 28, 2013 at 11:29 AM

That ends up with the Googles et al of the world grabbing a lot of our personal data and selling them to the highest bidders,

Ed, that has nothing to do with the question of legality. If you don’t see the difference between private business and government agency with guns, then you are a hopeless shill for tyranny.

SDN on June 28, 2013 at 11:48 AM

An interesting aspect of the Cordray “non recess recess” appointment, and subsequent failure to vacate the office once the Supremes had ruled on the principle, is to call into question both the legality of the CFPB actions under his leadership and also his immunity from prosecution for any actions he took that, like this one (if he had anything to do with it), might be construed as illegal.

If he traveled on the governments dime, saw consumer private info, disclosed any such information to another individual, portrayed himself as a “federal employee” or a myriad of other actions that are normal and standard actions of a confirmed agency head but potentially illegal for a private person. He’s really taking a personal risk here; I wonder if he knows it?

MTF on June 28, 2013 at 11:59 AM

Thank you Scott Brown

kringeesmom on June 28, 2013 at 12:17 PM

An interesting aspect of the Cordray “non recess recess” appointment, and subsequent failure to vacate the office once the Supremes had ruled on the principle, is to call into question both the legality of the CFPB actions under his leadership and also his immunity from prosecution for any actions he took that, like this one (if he had anything to do with it), might be construed as illegal.

If he traveled on the governments dime, saw consumer private info, disclosed any such information to another individual, portrayed himself as a “federal employee” or a myriad of other actions that are normal and standard actions of a confirmed agency head but potentially illegal for a private person. He’s really taking a personal risk here; I wonder if he knows it?

MTF on June 28, 2013 at 11:59 AM

If the media were halfway interested in doing its job, there would be aggressive questions to Obama about why he hasn’t already pulled Cordray and the NRLB from their positions and vacated all their decisions until this case is heard by SCOTUS.

I’m beginning to suspect that he will just ignore the ruling when it happens, which is why he’s not worried about having to clean up any mess.

You know he’s itching to declare that the courts can’t tell him any of his actions are unconstitutional. He’s probably looking for the first opportunity to establish as a matter of principle that he is not necessarily bound by every Supreme Court decision.

There Goes the Neighborhood on June 28, 2013 at 12:42 PM

This is getting more and more outrageous on a daily basis.

I am almost at the point now where I don’t even want to come here or anywhere else and read the news or watch news…

This govt is totally OUT OF CONTROL!

Will it ever end?

What will stop it?

I am out of answers…

I am doing all that I can, it just isn’t enough…

Thank you to Inhofe and Coburn for their NO vote on the immigration bill yesterday, that made me smile, just a little…

Scrumpy on June 28, 2013 at 12:55 PM

…….and yet NO ONE in Congress is pitching a fit about this?

http://legal-dictionary.thefreedictionary.com/Fourth+Amendment

The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

What isn’t someone in CONGRESS pitching a fit about this crap?

PappyD61 on June 28, 2013 at 12:56 PM

I want a cloaking device.

Even the state of Virginia is tracking when I buy over-the-counter cold medicine. I go into DC now for that. Pay cash.

TerryW on June 28, 2013 at 1:45 PM

The question that should be asked is “Can they gather data on a specific individual?” If the answer is yes, then the answer to the question, “Will they collect data on specific individuals” will be eventually be yes. That’s what people with power do!!!!

wukong on June 28, 2013 at 3:32 PM

NO DAMNIT

I never consented to my information, purchases or movement to be collected, databased and tracked!

Where do I sign for the class-action lawsuit?

TX-96 on June 28, 2013 at 4:09 PM

Sharing info with other Federal entities? Buy a gun with a credit card…gun registration! Use cash.

morbius on June 28, 2013 at 4:45 PM

IIRC, the CFPB is one of the new boards that is immune to any kind of congressional oversight.

vinman on June 28, 2013 at 10:19 AM

You’re right and you can thank the Dodd–Frank Wall Street Reform and Consumer Protection Act [and isn't it a hoot that they named their reform after "Senator Friend-of-Angelo" and "Representative 'Fannie-and-Freddie-are-not-in-crisis'"?] for the fact that the CFPB is “…an independent unit located inside and funded by the United States Federal Reserve…“.

azlibertarian on June 28, 2013 at 5:01 PM

I’d like to crawl through the screen and slap his stupid face, after biting off that big finger he points with.

avagreen on June 28, 2013 at 6:00 PM

OT:Mornin’ from the Peoples Republic of Colorado(visiting. Home tomorrow.) I’m not commenting much until I’m paroled from Moderation Purgatory.
Twerp out.

annoyinglittletwerp on June 28, 2013 at 10:15 AM

Hope you had a good visit and a safe trip home.
Looking forward to your continued commenting.

AesopFan on June 28, 2013 at 8:18 PM

How to obtain an independent sample of 5million users.

No doubt CFPB can obtain a list from … the IRS

Jimbobby on June 29, 2013 at 8:05 PM

The Congress should ask to see the data and ask what it is used for, and what would be considered successful use of the data. Why only 5 million consumers, why some and why not others? Are the data chosen to shape the result to influence policy, when if other data is selected a different path is chosen? Will this information be given to anyone with a profit making motive and not to other groups?

It is mysterious. I don’t think we need this program right now, sounds expensive, and will it be used to hurt the 5 million in the study? or help them unfairly?

Fleuries on June 29, 2013 at 8:51 PM