Home > Identity Theft > A New Government Database Would Know Almost Everything About You

Comments 0 Comments

Millions of Americans may soon become part of an expanded database that would give two federal regulatory agencies an up-close and personal (perhaps too up-close and personal) view of their private financial lives that, if breached, could make for a really bad day for a whole lot of people.

The seed for this proposed database expansion was buried in the 261-page Housing and Economic Recovery Act of 2008; a requirement that the Federal Housing Finance Agency monitor the National Mortgage Database, and expand it, to provide a monthly report on the state of the mortgage market.

That didn’t sound unreasonable.

All the information collected in the expanded NMD would be shared with the Consumer Financial Protection Bureau, and also used in an annual report on the mortgage market presented to Congress. Again, not unreasonable.

CFPB Director Richard Cordray’s Jan. 28 testimony before the House Financial Services Committee included a clear statement that the database would aggregate information — but that there would be no personal identifiers attached to it. Anonymized data has become the coin of the realm and certainly can be helpful if utilized properly.

However, there’s much more to the story.

Too Much Information

The National Mortgage Database was started in 2012, and tracks “first-lien single-family mortgages in existence any time from January 1998 forward.”

According to the Washington Examiner, the National Mortgage Database contained information on at least 10.1 million mortgage holders as of July last year, and the FHFA has two contracts with CoreLogic, which says it has the industry’s “largest, most comprehensive active and historical mortgage databases of over 227 million loans.” Cordray confirmed that NMD was using data from CoreLogic.

While such a large trove of financial data stored in one place would be worrisome, the fact that the data points were aggregates disconnected from particular people made it acceptable.

Then on April 16, the FHFA and CFPB posted a notice to the Federal Register, the daily journal of the U.S. government, which detailed a policy shift regarding the kinds of data that would be included in the expansion of the National Mortgage Database. It beggared the imagination.

The proposed expansion would allow the FHFA and the CFPB to see more information than most people can remember about themselves, including your name, current and past addresses, your telephone numbers, your date of birth, race/ethnicity, gender, the languages spoken in your home, your religion, your Social Security number — even your education records, military status/records, and employment history. Additionally, it would include every detail of your financial history stretching back to 1998, including balances owed, payment history, how much you paid for your house, your debt-to-income ratio and a gaggle of other data points.

On May 15, Rep. Jeb Hensarling (R-Texas), chairman of the House Financial Services Committee and Sen. Mike Crapo (R-Idaho), the ranking Republican on the Senate Banking, Housing and Urban Affairs Committee issued a letter proclaiming the expansion, “an unwarranted intrusion into the private lives of ordinary Americans.”

Data Security & the Threat of Cyber Attack

While there is some overlap in sentiment with Hensarling and Crapo, I also see the wisdom of the provision in the Housing and Economic Recovery Act of 2008. Given the massive failure of regulatory bodies to prevent a financial crisis that created a recession and nearly destroyed America’s reputation in global financial markets, regular check-ups are a very good idea.

That said, we are in the middle of a cyber war with an enemy we barely understand. The Pentagon’s annual report to Congress released May 6 explicitly pointed to China in describing the threat of cyber attacks. But China isn’t the only threat. Hackers are everywhere, and they have different reasons for wanting access to your files and personal information.

An expanded National Mortgage Database would be like El Dorado for every kind of cyber attacker out there, the information not only being of value to identity thieves, but potentially as part of a full-spectrum attack on U.S. financial markets.

While the threat of cyber attacks grows, we need to be very careful about the kind of information we aggregate and store in any one place. Unfortunately, attacks are a given, breaches are the third certainty in life and until that is no longer the case, until we can be absolutely certain that the information we collect is safe, we should be exceedingly mindful about avoiding the data equivalents of a Pandora’s Box.

In the meantime, what – if anything – can you do? You should always, no matter what, stay on top of your financial statements and credit standing. Any discrepancies or inaccuracies on bank or credit statements, or on credit reports, could mean that your sensitive data has landed in the wrong hands and is being used fraudulently. It’s also a good idea to monitor your credit scores for changes that could indicate a problem lurking in your credit reports. You can get your credit reports for free once a year from AnnualCreditReport.com, and monitor your credit scores monthly for free on Credit.com.

This story is an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its affiliates.

More on Identity Theft:

Image: Burke/Triolo Productions, Brand X Pictures

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Certain credit cards and other financial products mentioned in this and other articles on Credit.com News & Advice may also be offered through Credit.com product pages, and Credit.com will be compensated if our users apply for and ultimately sign up for any of these cards or products. However, this relationship does not result in any preferential editorial treatment.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Our Owners

Credit.com is owned by Progrexion Holdings Inc. which is the owner and administrator of a number of business related to credit and credit repair, including CreditRepair.com, and eFolks. In addition, Progrexion also provides services to Lexington Law Firm as a third party provider. Despite being owned by Progrexion, it is not the role of the Credit.com editorial team to advocate the use of the company’s other services. In articles, reporters may mention credit repair as an option, for example, but we’ll also be sure to note the various alternatives to that service. Furthermore, you may see ads for credit repair services on Credit.com, but the editorial team isn’t responsible for the creation or implementation of those ads, anymore than reporters for the New York Times or Washington Post are responsible for the ads on their sites.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team