The Wall Street Journal reported that a consumer financial protection bureau (CFPB) employee sent records containing private information to a personal email address that included confidential supervisory information from 45 other financial institutions as well as personal information on roughly 256,000 customers at one financial institution.
The agency, which was already under siege from Republican lawmakers, presented the breach to Congress as a catastrophic incident.
The emails contained customer information from seven businesses, although the majority of the personal data was linked to customers at one unnamed institution, a CFPB spokeswoman told the Journal.
The incident was discovered by the agency for the first time in February, and it was revealed to lawmakers on March 21, according to the Journal. The reason the employee, who was later fired, forwarded the emails to a personal account was not disclosed by the CFPB.
According to the CFPB, the personal information includes two spreadsheets with names and transaction-specific account numbers that were used internally by the financial institution, which downplays the severity of the data theft.
According to the representative, the spreadsheets do not contain the customers' bank account details and cannot be utilised to access a customer's account.
As of Wednesday, the former CFPB employee had not complied with a request to erase the emails.
Republican lawmakers seized on the data leak and demanded additional information from Director Rohit Chopra in statements they released.
The CFPB has expanded enforcement efforts against the mortgage industry under Chopra, which has increased compliance expenses.
In October, Mortgage Bankers Association President and CEO Bob Broeksmit described the agency as a "judge, jury, and executioner all rolled into one."
He urged the government to "establish clear and consistent standards, providing notice and comment when enacting rules." Unfortunately, the Bureau does not often follow this reasonable procedure, announcing new legal responsibilities without formal process or deliberation, enforcing novel and untested legal theories, and making it extremely difficult for businesses to grasp their legal obligations."
Additionally, the agency is battling constitutional issues on various fronts. The agency's funding structure—by which it is funded by the Fed as opposed to appropriations legislation enacted through Congress—will be decided by the Supreme Court in a case that will be heard there.
The agency's financing source was ruled to be illegal in 2022 by a panel of Trump appointees on the Fifth Circuit U.S. Court of Appeals.
The funding provisions for the CFPB were found to be constitutional in March by the Second Circuit U.S. Court of Appeals, which includes the districts of Connecticut, New York, and Vermont.
