Consumer agency threatens independence of bankruptcy office [more privacy violations]

Washington Examiner ^ | September 10, 2013 | Richard Pollock

[upchuck]

Serious allegations are being raised in the legal community that the Consumer Financial Protection Bureau has recruited the U.S. Trustee Program to collect bankruptcy data on its behalf to aid a controversial data-mining program.

Documents obtained by the Washington Examiner describe efforts by the CFPB to collect a decade's worth of private financial data on the consumer behavior of five million American citizens without their knowledge or consent. The CFPB data-mining campaign has alarmed privacy watchdogs.

The USTP was created by Congress in 1978 to be a rigorously neutral agency within the U.S. Department of Justice. Its attorneys are supposed to be "impartial” and to serve as a “watchdog over the bankruptcy process,” according to the agency's website.

If USTP is aiding CFPB’s data-mining program in any manner, bankruptcy authorities argue it would constitute an “unprecedented” violation of the organization's reason for being and destroy its independence.

Officials with CFPB and USTP were reluctant to respond to questions about their agencies' relationship and the data-mining program.

Concerns were first sparked on May 11, 2012, when USTP attorney J. Steven Wilkes filed an unusual discovery request before the U.S. Bankruptcy Court in Tampa, Fla.

Citing a small number of Florida-based bankruptcy cases filed before the court, Wilkes asked for millions of unrelated bankruptcy files nationwide that were in the possession of Morgan Drexen, a California-based administrative-support company serving more than 100 bankruptcy lawyers.

Wilkes asked for all Morgan Drexen cases in its system from Jan. 1, 2008, for Chapter, 7, 11, 12 or 13 proceedings, where the company “was at any time assisting an attorney for a debtor in a bankruptcy proceeding.”

Although filed in the Region 21 bankruptcy court, Wilkes' request covered the entire United States.

[upchuck]

Richard Cordray was, at first, illegally installed as the puppet master of the CFPB. This past July the Senate finally approved his nomination.

IMHO, as long as the House is in a defunding mood, the CPFB should be added to the list.

[Buckeye McFrog]

Sounds like the CFTC is building a case to go after credit card lenders for causing too many personal bankruptcies.

Anti-banker populism. Coming soon to an election cycle near you.

[Terry L Smith]

More federal contract dollars gone to waste.
Another “agency” that will be on the chopping block of the next conservative President.