Skip to comments.New federal database will track Americans' credit ratings, other financial information
Posted on 05/30/2014 5:48:55 AM PDT by Chickensoup
As many as 227 million Americans may be compelled to disclose intimate details of their families and financial lives -- including their Social Security numbers -- in a new national database being assembled by two federal agencies.
The Federal Housing Finance Agency and the Consumer Financial Protection Bureau posted an April 16 Federal Register notice of an expansion of their joint National Mortgage Database Program to include personally identifiable information that reveals actual users, a reversal of previously stated policy.
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FHFA will manage the database and share it with CFPB. A CFPB internal planning document for 2013-17 describes the bureau as monitoring 95 percent of all mortgage transactions.
FHFA officials claim the database is essential to conducting a monthly mortgage survey required by the Housing and Economic Recovery Act of 2008 and to help it prepare an annual report for Congress.
Critics, however, question the need for such a vast database for simple reporting purposes.
In a May 15 letter to FHFA Director Mel Watt and CFPB Director Richard Cordray, Rep. Jeb Hensarling, R-Texas, and Sen. Mike Crapo, R-Idaho, charged, "this expansion represents an unwarranted intrusion into the private lives of ordinary Americans."
Crapo is the ranking Republican on the Senate Banking, Housing and Urban Affairs Committee. Hensarling is chairman of the House Financial Services Committee.
Critics also warn the new database will be vulnerable to cyber attacks that could put private information about millions of consumers at risk. They also question the agencys authority to collect such information.
Earlier this year, Cordray tried to assuage concerned lawmakers during a Jan. 28 hearing of Hensarling's panel, saying repeatedly the database will only contain aggregate information with no personal identifiers.
But under the April register notice, the database expansion means it will include a host of data points, including a mortgage owners name, address, Social Security number, all credit card and other loan information and account balances.
The database will also encompass a mortgage holders entire credit history, including delinquent payments, late payments, minimum payments, high account balances and credit scores, according to the notice.
The two agencies will also assemble household demographic data, including racial and ethnic data, gender, marital status, religion, education, employment history, military status, household composition, the number of wage earners and a familys total wealth and assets.
Only 12 public comments were submitted during the 30-day comment period following the notice's April 16 publication.
The mortgage database is unprecedented and would collect personal mortgage information on every single-family residential first lien loan issued since 1998. Federal officials will continue updating the database into the indefinite future.
The database held information on at least 10.1 million mortgage owners, according to a July 31, 2013, FHFA and CFPB presentation at an international conference on collateral risk.
FHFA has two contracts with CoreLogic, which boasts that it has access to industrys largest most comprehensive active and historical mortgage databases of over 227 million loans.
Cordray confirmed in his January testimony that CoreLogic had been retained for the national mortgage database.
The credit giant Experian is also involved in the mortgage database project, according to an FHFA official who requested anonymity.
Rep. Randy Neugebauer, R-Texas, who sits on the Hensarling panel and who has followed the mortgage database's development, said he was deeply concerned about the expansion.
When you look at the kinds of data that are going to be collected on individuals, just about anything about you is going to be in this database, he told the Examiner in an interview.
Critics of the database span the financial spectrum, including the U.S. Chamber of Commerce's Center for Capital Markets Competitiveness and the National Association of Federal Credit Unions.
In a May 16 letter to FHFA, NAFCU's regulatory affairs counsel, Angela Meyster, said the database "harbors significant privacy concerns" and "NAFCU believes greater transparency should be provided by the FHFA and CFPB on what this information is being used for."
Meyster told the Examiner that "it goes back to the breadth of information that theyre asking for without really speaking to what they will be used for."
Meyster said she was unconvinced. "It seems theyre just adding information and theyre not really stating where its going or what its going to be used for. Theres no straightaway answer. They say they are trying to assemble as much information that they can."
Neugebauer agreed. "Why are we collecting this amount of data on this many individuals?" he asked in the interview.
The Chamber of Commerce said that while Congress did ask for regular reports, it never granted FHFA the authority to create the National Mortgage Database.
Congress did not explicitly require (or even explicitly authorize) the FHFA to build anything resembling the NMD, the Chamber told Watt in its May 16 letter.
Cordray in his testimony told the House, "Were making every effort to be very careful" but he could not promise there would never be a data breach.
Neugebauer said the hacker threat is real. "If someone were to breach that system, they could very easily steal somebodys identity."
Meyster said she doubts the government can protect the data. Were essentially concerned that these government systems dont have the necessary precautions to make sure that individual consumers are identified through the database, she said.
Computerized theft of government and commercial data is a major concern for federal officials. Indictments were made public last week for five Chinese military members who allegedly hacked into the computer systems of six American corporations.
A December report from the Government Accountability Office on breaches containing personally identifiable information from federal databases shows unlawful data breaches have doubled, from 15,140 reported incidents in 2009 to 22,156 in 2012.
A May 1 White House report on cybersecurity of federal databases also recently warned, "if unchecked, big data could be a tool that substantially expands government power over citizens.
All the better for the medical-industrial-government complex to see who has assets to steal.
This crap’s got to stop.
More transparency for Americans ...
while the borders remain open
and al Qaeda and the world
proceed to take positions for their end game.
Mel Watt, former member of the CBC “brain” trust - you know the gang that thinks Guam may tip over, that we planted a flag on Mars, etc, etc, etc.
Richard Cordray, political termite, clerked for Bork, Kennedy and Whizzer White. Suck up to Clinton and Obama.
CFPB is Lizzy Warren’s masterpiece.
Sheeple better wake up.
That’t exactly what this is all about. A government that will use the IRS as a weapon against citizens is more than capable of stealing your money. This database could be the holy grail of political power.
Congress is sleepwalking and will do nothing to stop this outrageous abuse.
Under those conditions, I doubt I'd even consider getting a mortgage.
“All the better for the medical-industrial-government complex to see who has assets to steal.”
our current government needs this info so that they can bring suit against institutions who haven’t given the statistically appropriate share of credit and/or mortgages to the demographically chosen people.
Unfortunately, “Once you’ve gone too far, it’s hard not to go all the way.”
I fear this is going to go all the way.
Well, if you’re not doing anything wrong, what difference does it make?
The country is docile and adrift without any real leadership whatsoever. And the political system is totally dysfunctional. Quite frankly, I’m surprised that Obama hasn’t gone further with his power grab strategy than he has. The road is pretty much clear to do what he wants. Nobody seems willing to stand up to him. Certainly not the congress.
We can all see how everything is being (maybe unwittingly) put in place for the guy who is going to come along and CONTROL everything.
Bush planted the seeds.
I know... its really not a political party that is responsible.
bookmark to show a naive computer tech this article later.
I think if we can hype the danger of the cyberattacks on personal data that might shake people into doing some action. BUT consider that this younger generation, with all its student debt, doubts it will ever own a home (unless mom & dad die & put put theirs in the will). So this collection regulation, based on mortgages, will be ignored by them.
Thatt exactly what this is all about. A government that will use the IRS as a weapon against citizens is more than capable of stealing your money. This database could be the holy grail of political power.
Congress is sleepwalking and will do nothing to stop this outrageous abuse.
I agree with you. The IRS appears to be the conduit for monies for the government/Medical/industrial complex.
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