Amid shocking reports that the National Security Agency has been compiling data on American citizens without a personalized warrant or probable cause, The Washington Examiner is reporting that two federal agencies are making plans to seize the private financial records of millions of American mortgage borrowers for use in a centralized database. The Consumer Financial Protection Bureau and the Federal Housing Finance Agency currently maintain a National Mortgage Database Program which was initially designed to hold generic data about the mortgage marketplace. However, the executive branch regulatory bureaus appear to have made a policy reversal regarding the private data of citizens and are now seeking a wide range of financial and demographic data points on specific citizens for inclusion in the searchable database.
The agencies recently expressed intentions to expand the database in a posting to the Federal Register. The Consumer Financial Protection Bureau was created by the Dodd–Frank Wall Street Reform and Consumer Protection Act. The bureaus claim that the personal details are necessary in order to create a report for Congress which is allegedly required under the Housing and Economic Recovery Act of 2008, a bill signed into law by former President Bush that originally created the Federal Housing Finance Agency.
The database would contain records on any Americans who have taken out a single-family residential first lien loan at any time from 1998 onward. The compiled data points would be very comprehensive and would include not only financial records such as credit histories, social security numbers, reports on total assets, and credit card transactions, but also unrelated demographic data, including information on the age, race, religion, and number of residents in the household.
US Senator Rand Paul once warned that the government may be working on a database that could include financial records such as Americans’ credit card histories and pointed out that such data could be used to track citizens’ activities. “Think about your credit card records, and I tell people all the time, think about what people can know about you that might be on your Visa bill. I really think that’s personal information, and unless you are specifically named on a warrant, nobody should be looking at that,” said Senator Paul. The existence of such a database raises security concerns, as privacy advocates worry that identity thieves and hackers will target the sensitive information that is set to be collected in the database.
Such an effort to collect private data on specific citizens absent a warrant and suspicion of criminal activity violates Fourth Amendment protections. Senator Mike Crapo and Congressman Jeb Hensarling issued a letter to the directors of the FHFA and the CFPB stating that the expansion of the database “can easily be perceived as an abuse of the trust placed in your agencies by the American people.”
The Washington Examiner estimates that the policy change could affect up to 227 million Americans.