CFPB’s Auto Finance Data Collection Proposal Faces Backlash
A coalition of associations have claimed the proposal infringes on personal privacy rights
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- Written by Banking Exchange staff
A group of banking associations have expressed concerns about the Consumer Financial Protection Bureau’s (CFPB’s) proposed plans for auto finance data collection, claiming it jeopardizes consumer privacy.
The CFPB has proposed to annually collect more than 120 data points about each loan from 400 auto lenders, which includes the borrower’s zip code, income frequency and loan amount.
The regulator also plans to collect limited information about repossessions and loan modifications for lenders originating between 500 and 20,000 auto loans.
The American Bankers Association, American Financial Services Association, America’s Credit Union, Consumer Bankers Association and National Automobile Dealers Association have stated the nature of the proposed information collection is beyond the CFPB’s statutory authority.
According to the group, the proposal encroaches upon personal privacy boundaries of millions of consumers and violates several provisions of the Paperwork Reduction Act and Dodd-Frank Act.
However, the CFPB has asserted that its market monitoring authority in the Dodd-Frank Act authorizes the planned broad information collection.
In a joint letter, the group said: “The proposed data collection would also amass a vast array of sensitive personal financial data on millions of Americans, infringing upon their personal privacy rights.”
The coalition also claimed the CFPB has failed to show that the information collection is needed for the agency’s function other than an assertion that it needs the data to monitor the market for risks.
The proposal also fails to recognize and justify the paperwork burden that will be introduced for lenders, according to the group.
Since the announcement of the proposal, several consumer groups have asked the CFPB to publish all the data collected and consider ways to collect data about consumer demographics, including race, ethnicity, age, gender and other characteristics.
The coalition added: “Consumers seeking financing for the car they need to get to work should not have to put their personal privacy at risk.”
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