Why does the CFPB want to undermine a key tool of law enforcement?

Samuel Corum/Bloomberg

The Consumer Financial Protection Bureau, originally the brainchild of Sen. Elizabeth Warren, was created in 2010 by the same Congress that passed the Dodd-Frank Act. The law gave the agency the ability to exercise sweeping powers over financial markets with virtually no political accountability. In the years since, the CFPB has proven highly controversial. Federal courts have even found the CFPB to be a "threat to individual liberty" and held its governing structure to be unconstitutional.

The controversy continues. In September, at a White House press event with Vice President Kamala Harris, CFPB Director Rohit Chopra announced the release of the agency's sweeping outline of proposals to amend Regulation V, which implements the Fair Credit Reporting Act (FCRA). Public comments on the proposals were filed last week. Most reporting on the CFPB's proposals has focused on its plan to eliminate medical debt credit reporting. But also buried in the proposals is the CFPB's plan to "clarify the extent to which credit header data constitutes a consumer report."

Just what is credit header data? It is the nonfinancial identifying information located at the top of a credit report, such as name, current and prior addresses, telephone number and Social Security number. It is distinguished from other sections of a credit report, including "trade lines" containing various account payment histories.

Financial institutions regularly use credit header data to confirm customer identities and transactions as a means of combating fraud and money laundering. But even more significantly, credit header data also informs databases used by thousands of federal, state and local law enforcement agencies to protect communities by investigating crimes and finding missing persons or locating criminal suspects. In fact, such databases are routinely used by most major federal law enforcement agencies, including the Department of Homeland Security, FBI, Drug Enforcement Administration, Secret Service and U.S. Marshals Service. For example, the National Center for Missing and Exploited Children used information derived in part from credit header data to help resolve over 1,300 missing child cases last year.

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The privacy of credit header data is federally protected, with its compilation subject to the comprehensive reuse and redisclosure requirements of the Gramm-Leach-Bliley Act of 1999. However, credit header data has long been recognized as not subject to the FCRA. For instance, in 2011, a Federal Trade Commission report summarizing agency guidance going back to the 1970s stated that "a report limited to identifying information … does not in itself constitute a consumer report if it does not bear on any of the seven factors" bearing on the definition of a "consumer report" under the FCRA. Numerous federal court decisions have also reached the same conclusion. Congress has also previously considered but not enacted bills to change the treatment of credit header information by amending the FCRA, which both implicitly recognizes that credit header data is not subject to the FCRA and that such a change requires the enactment of legislation.

The reason the CFPB's plan is so alarming is because its effort to subject credit header data to the FCRA would effectively cut off law enforcement access to such data. This is because under the FCRA, a consumer report can only be shared for a limited number of "permissible purposes," usually to inform credit, housing and insurance decisions. Investigating crimes or finding missing persons are not expressly listed as permissible purposes under the FCRA, so law enforcement agencies will no longer be able to obtain access to credit header data once the CFPB redefines it as a "consumer report." In fact, providing the data to law enforcement would become a crime punishable by up to two years in prison.

Why would the CFPB want to shut off law enforcement access to credit header data? Its proposals lack a detailed explanation, but its unstated purpose appears to be the advancement of the Biden administration's open borders agenda. In January 2022, a coalition of progressive activists wrote a letter to Director Chopra urging him to stop the sharing of credit header data by removing its exclusion from the definition of "consumer report" under the FCRA. Their goal was to undermine the enforcement of federal immigration laws. For instance, they approvingly referenced prior efforts to limit the sharing of credit header data with U.S. Immigration and Customs Enforcement and stated that credit header data could be used to help find "consumers who do not wish to be located, including … undocumented immigrants." The CFPB's recent plan thus appears to deliver on the substance of the activists' request.

At a time when the FBI director is warning Americans of increased threats of domestic terror attacks and with a record-high four million apprehensions of illegal border crossers over the last two years, the CFPB's plan is both foolish and dangerous. One unelected bureaucrat in Washington should not be the sole arbiter of whether our heroes in blue have the tools they need to protect and serve; and nothing in the Dodd-Frank Act gives the CFPB authority to decide consequential matters of public safety and national security. These are the very types of major questions of national and economic importance that the Supreme Court last year reaffirmed should be left to Congress. However, because the CFPB is independently funded by the Federal Reserve rather than through regular congressional appropriations, there is likely little that Congress can do to hold the CFPB accountable for its actions. Let's hope that law enforcement officers will make their voices heard before their jobs needlessly become harder and more dangerous. And let's hope that elected officials around the country who value the safety of their constituents and security of their communities register their views with the Biden administration. That may be the only way to dissuade the CFPB's leadership from pursuing its radical plan to undermine law enforcement.