CFPB Chief Calls for Bolstered Consumer Data Protections in Senate Testimony

The head of the nation's top consumer finance watchdog painted a chilling portrait of unchecked "financial surveillance" on Wednesday, as he issued an urgent call for Congress to implement far stronger safeguards around companies' collection and monetization of consumer data.

Testifying before the Senate Banking Committee, Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra warned that recent moves by major players to leverage customers' purchase data for marketing purposes represent an alarming acceleration toward abusive data mining practices.

Chopra cited media reports that banking giant JPMorgan Chase and payments titan PayPal were exploring using customers' transaction histories to enable targeted advertising. While JPMorgan denied any improper sharing of personal data, the CFPB chief expressed grave concerns about the precedent such moves could set.

According to Chopra, allowing unfettered commercialization of Americans' private financial transaction data represents a concerning trend toward more "financial censorship." He urged lawmakers to take action to prevent such practices.

The CFPB chief also voiced concerns about data practices in the booming "buy-now, pay-later" lending sector. He suggested these companies could essentially require customers to permit invasive data mining as a condition of accessing financing products.

Last month, the CFPB issued new rules subjecting "buy-now, pay-later" firms to federal oversight as credit providers.

During the hearing, Republican members questioned whether the CFPB can legally draw funding from the Federal Reserve, which has run operating deficits recently. However, Chopra maintained the Supreme Court recently affirmed the agency's funding structure as constitutional.

Consumer advocates have amplified calls for a comprehensive federal data privacy law amid growing concerns about predatory data harvesting, lack of transparency, and insufficient consumer controls over how their personal information is gathered and monetized.

Chopra's testimony reinforces those efforts by elevating the risks to consumers' financial privacy without enhanced legal guardrails on industry data practices.

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