Mark Dobosz,  NARCA

Mark Dobosz,

Public/private partnerships often prove to be some of the best examples of meeting the needs of a variety of infrastructures. An article by Andrew Deye in the June 2015 Kennedy School Review indicates that “In a September 2014 report, Moody’s Investors Service stated, ‘the United States has the potential to become the largest P3 market in the world, given the sheer size of its infrastructure’.”

The data centers of our regulatory agencies are a key infrastructure to consumer information and deserve no less than one that can be best built for the 21st century through a Public Private Partnership (P3).

According to KPMG’s independent audit report of the CFPB, released on January 13, 2016,  “The bureau can be more effective in its mission where trust exists between consumers and the agency that works to protect them.”  KPMG’s findings on the CFPB’s privacy policies and procedures “The current process for maintaining the inventory of these data sets is manually intensive. In an effort to improve transparency, the CFPB’s Chief Data Office is transitioning from this manual process of tracking these data sets to an automated tool…The CFPB’s chief data office is in the process of transitioning the manual process to the use of an automated tool.”

The CFPB has been highly emphatic in requiring both the financial services and the debt collection industry to increase compliance by establishing and maintaining systems and procedures to ensure consumer data privacy in all transactions.  All of which have utilized “automated” systems that have proven to be effective and efficient in the credit ecosystem. Millions have been spent by the industry to meet these demands in the past 5-7 years. The National Creditors Bar Association (NARCA) members report a 300%+ increase in compliance costs from 2011-2014.

The experience of implementing secure data automation of consumer financial and personal information is an asset that is currently underutilized by the CFPB. A Public Private Partnership (P3) between industry and the regulatory agency would bring to market the exact types of automation and systems that the regulatory agency has been requiring industry to implement in their financial services and credit ecosystem operations in the past few years. Why offer consumers two standards and systems of data privacy and security protection when a standardized system that is recognized as best in class could be built through a P3 and provide consumers with the confidence that both government and the private sector are on the same page.

As Deye concludes in his article, at a conceptual level, the primary drivers of infrastructure P3s—new sources of capital, cost savings, risk transfer, and accountability—remain strong. Government officials at all levels (federal, state, and local) continue to operate in an environment of constrained financial resources and citizen expectations for efficient and timely operations.”

If I-595, the Port of Baltimore and the Long Beach Courthouse (all recent successful P3 projects) can provide citizens with safe, secure and efficient infrastructure, then a CFPB-Financial Services P3 should be pursued to provide US consumers with the same level of benefits. This P3 could be a “coming of age” in the regulator’s history.

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