Opening Statement of Director Rohit Chopra before the House Financial Services Committee

Chairman McHenry, Ranking Member Waters, and Members of the Committee, thank you for inviting me to this hearing.

Since its creation, the CFPB has returned $20.7 billion to consumers through law enforcement activity and created unquantifiable returns for the over 205 million Americans and honest businesses harmed by the illegal practices that we have stopped. We are currently on track to save customers $20 billion in junk fees every year. We also expect to process over 2 million complaints this year.

Since my last report to Congress, we have advanced a number of key initiatives, including on credit cards, medical debt, and open banking. My written testimony and the CFPB’s Semiannual Report details much of this work.

Today, I’d like to highlight the pressing need for Congress and the CFPB to address the protection of personal data and financial privacy in an increasingly digital marketplace. The United States must lead when it comes to a competitive and innovative market. At the same time, this cannot be at the expense of unchecked surveillance as we have seen in China. This is a critical issue with high stakes for our economy, national security, and our liberty.

For over fifty years, the House Financial Services Committee has played a major role to protect consumer data.

The Fair Credit Reporting Act is one of America’s only data protection laws that covers all background reports assembled about Americans for use and sale by third parties. The FCRA includes meaningful restrictions to prevent abuse and misuse of data. The Gramm-Leach-Bliley Act sets the parameters for financial institutions to secure and disclose the uses of consumer data. Section 1033 of the Dodd-Frank Act provides consumers with the right to access and control their personal data.

The CFPB takes seriously our mandate from Congress when it comes to these laws on privacy. We are progressing towards finalizing open banking rules to develop data sharing standards and privacy protections when people transfer their financial data to competing companies. We finalized a key part of the framework last week, which will set the stage for finalizing the rest of the rule this fall.

We are also moving forward to propose a rule under the Fair Credit Reporting Act to restrict uses of certain sensitive data by data brokers assembling dossiers about each of us. We are pursuing this as part of a broader government effort to protect our national security and servicemembers from countries of concern that might seek to purchase and exploit sensitive data on Americans.

While the CFPB is taking important steps on protecting financial data, it is critical that Congress act too. In my discussions with members of the committee on both sides of the aisle, there is clear interest in doing more to protect privacy, ranging from the intrusive communications related to trigger leads when applying for a mortgage or addressing concerns about the privacy of our sensitive transaction data.

Since my last appearance, Big Tech giants are entering more and more of financial services and harvesting personal data. There have been reports that large financial firms like PayPal and JPMorgan Chase are developing plans to fuel surveillance-based targeting and advertising businesses. These plans to monetize sensitive financial transaction data are a reminder that the U.S. is slowly lurching toward more financial surveillance and even financial censorship.

We are eager to work with the House Financial Services Committee to do more to protect against abuse and misuse of data, including by enshrining stronger protections into law. We also believe there are opportunities to advance legislation to accelerate open and decentralized banking in our country that can also protect personal data.    

I think there is much more we can do together to tackle problems that our country faces. Thank you and, I look forward to your questions.