CFPB nominee signals openness to continuing data-broker work
President Donald Trump’s nominee to lead the consumer-focused federal agency that Elon Musk wants to “delete” and that Republican lawmakers have railed against since its creation indicated to senators Thursday that he could continue some data-focused work started by his Democratic predecessor.
In his nomination hearing to lead the Consumer Financial Protection Bureau, Jonathan McKernan told members of the Senate Banking Committee that Rohit Chopra — director of the agency during Joe Biden’s presidency — “was onto something” with his policies targeting data brokers and data aggregators.
“There’s privacy issues here. There’s potentially national security issues here,” said McKernan, who spent the past two years serving on the Federal Deposit Insurance Corp.’s board. “And I think it’s important that we — both in the regulated space and then the rest of our elected officials — continue to focus on this. As these entities are collecting more and more data and the analytics get more and more powerful, there’s some real policy issues here.”
McKernan commended Chopra’s work “to increase our attention on some of the very significant policy issues posed by data collection.” The CFPB under Chopra introduced a rule in December to curb the selling of Americans’ personal and financial information by data brokers, limiting the sale of Social Security numbers, phone numbers and other identifiers collected by certain companies. The rule would classify data brokers as consumer reporting agencies under the Fair Credit Reporting Act, holding them accountable to various accuracy and compliance standards.
Chopra spoke often during his time leading the agency about the misuse of personal data, framing data protection as a matter of national security. Many industry groups, meanwhile, came out against proposed Biden administration rules on data brokers, particularly one that banned the selling of bulk sensitive information to adversarial foreign entities.
Despite that pushback, McKernan appeared committed Thursday to continuing that work and focusing on some internal data security. He told Sen. Catherine Cortez Masto, D-Nev., that he would implement a policy to protect the security of confidential information the CFPB obtains from the public and from the companies it supervises.
McKernan also said he intends to “take a close look” at information the CFPB has on its servers “and whether that’s really necessary.”
“There’s been a lot of focus on this issue,” he added. “I think we need to be focused on both risk, external and internal. We also should be thinking about the risk that China or another adversary gets ahold of that information.”
Thursday’s hearing came just weeks after Office of Management and Budget Director Russell Vought ordered the CFPB to stop nearly all its work, leading several Democratic lawmakers to question McKernan about what he’d actually be able to do in the role.
Sen. Elizabeth Warren, D-Mass., ranking member of the committee and the brains behind the CFPB’s creation, told McKernan that “it kind of feels like you’ve been lined up to be the number one horse at the glue factory.”
McKernan, a Duke Law grad who previously served in counsel and advisory roles with the Treasury Department, the Federal Housing Finance Agency and to former Republican Sens. Pat Toomey of Pennsylvania and Bob Corker of Tennessee, assured Warren and her Democratic colleagues that if confirmed, he would carry out the core functions of the agency as laid out in law.
“Under my watch, the CFPB will take all steps necessary to implement and enforce the federal consumer financial laws and perform each of its other statutorily assigned functions,” he said. “But the CFPB will do this by centering its regulation on real risks to consumers and by focusing its enforcement on bad actors.”
