WASHINGTON May 18 The U.S. watchdog agency that
investigated and fined Wells Fargo & Co for creating
phantom accounts, and which regularly penalizes large banks and
lenders on behalf of consumers, has holes in its systems for
protecting confidential information, the office charged with
inspecting its operations said on Thursday.
The relatively new Consumer Financial Protection Bureau has
made confidential investigative information "available to
employees when they do not need it to perform their assigned
duties, increasing the risk of inadvertent or unauthorized
disclosure," the Federal Reserve Inspector General's office
found in its report.
The inspector general only looked into whether the CFPB's
enforcement arm had effective safeguards for sensitive
information, and not if the information had been disclosed
The CFPB, created in the 2010 Dodd-Frank Wall Street reform
law to protect individuals against fraud, receives its funding
from the central bank and is subject to checks by the Fed's
internal inspection office.
The inspector general pointed to the enforcement office's
"challenges with updating access rights" and an information
technology system migration for giving 113 CFPB staff members
the ability to read the restricted records.
It added the enforcement office is not consistent in naming
and storing files, creating other opportunities for unauthorized
people to view information.
Ultimately, when a worker was moved from one case to another
the agency was slow in cutting off the person's ability to
access information on the prior case.
The office, which the report said has obtained $11.5 billion
in relief for more than 27 million consumers, began working to
improve protections while the inspector general was conducting
the study and in its responses in the report the CFPB said it
had already limited the access of unauthorized users.
A spokesman for the CFPB said there were no indications of
unauthorized access to information outside CFPB or of
inappropriate access within the agency.
(Reporting by Lisa Lambert; Editing by Bernadette Baum)