Elizabeth Warren wants your data, and if you're counting on cover in the fact that Republicans will take over the House in January, or that the Consumer Financial Protection Bureau is targeted at large banks, you may be taken by surprise. "[Small banks may] think you're safe from the CFPB, but you're not," says a banking regulatory attorney who declined to be identified because of a regulatory action he's working on. "I can easily see the CFPB riding shotgun on FDIC exam, on a 'sampling' basis."
But what began as a populist issue has quickly become a technology story, with President Obama's interim CFPB head Warren visiting Silicon Valley and coming out an evangelist for real-time data analysis. "A 21st-century agency should use 21st-century tools," Warren said in an email to BTN. "We hope to have real-time information gathering and data collection so that we can react to changes-and problems-more quickly."
Warren says the agency's first target will be the many pages of "fine print" typically accompany credit card agreements. In an op-ed she penned for Politico, Warren pits community banks against megabanks, saying that the smaller institutions have suffered from the "pricing tricks" that larger institutions employ to gain market share. But she expresses understanding for small banks' compliance burdens.
"Data collection is a difficult and sometimes expensive undertaking, particularly for smaller financial services institutions," Warren writes. "That's why we will look to streamline the burdens we place on companies...But there are some data that will be essential for protecting consumers, and we will find a way to enable banks and other companies to convey that information to the agency as quickly and simply as possible."
On the other side of the equation, Warren's expressed a desire to tap all Americans to supply the data the agency will parse-think of it as crowdsourcing regulatory enforcement. "Real-time data collection will be essential, both for the agency to serve as an effective cop on the beat, and for giving third parties-media, investors, scholars-a chance to glean insights from the data quickly enough to be useful," she writes.
Tech experts have a tough time imagining how a massive database populated by consumer submissions might work in practice. "I am skeptical. Point of sale data can easily get into billion and trillions of rows of data, that's not even feasible," says Venkat Muller, a senior director at TIBCO Spotfire Inc.
David Wallace, financial services marketing manager for SAS, also has trouble fathoming the truly real-time database that Warren envisions. "I don't know even how to quantify it except that would be exabytes of data," he says.
Charged with spearheading the CFPB's mammoth technology task is chief technologist Eugene Huang. Huang has held tech positions with the Federal Communications Commission, was a technology advisor to Treasury Secretary Hank Paulson, and secretary of technology for Virginia from 2006 to 2006 under Gov. Mark Warner.
