Warnings of Fraud as Senate Investigators Say Agencies Fail to Verify Commenters on Rules
An investigation shows that comments posted about proposed rules on agency websites are "vulnerable to abuse by malicious actors.”
The CFPB does not attempt to verify the identity of people commenting on proposed rules or mergers—a practice that a Senate committee said opens the regulatory process to fraud and abuse.
“For online commenting to be beneficial to both the agencies and the public, online dockets must contain substantive, relevant information that is easy to identify,” the staff of the Senate Homeland Security and Governmental Affairs Committee’s Permanent Investigations Subcommittee said last week, as they unveiled the results of an investigation into the regulatory comment process.
While the investigation did not include the NCUA in its findings, the agency does not require personal identifying information from people submitting comments and the NCUA does not attempt to verify the identities of people commenting.
The NCUA uses the website, regulations.gov for people submitting comments on proposed mergers.
That practice follows the policy used by many agencies, the Senate committee staff said, in its report.
“Commenters can provide any information they wish in those fields, including the word ‘Anonymous.’ a nonsensical string of characters; or a fictitious or a fraudulent name, in some cases associated with fraudulent contact information,” the report said.
In the report, Senate staff said that the CFPB, among other agencies, was aware of comments submitted using false identities, but did little to stop them.
And the CFPB and other agencies did not use technological tools to ensure that comments are being submitted by real people, instead of bots.
“This leaves the commenting process more vulnerable to abuse by malicious actors,” the report stated.
Supporters and opponents of a strict payday loan rule have accused each other of lining up phony comments on the rule.
For instance, Allied Progress, an opponent of loosening the payday rule, said that at least 214 commenters said they needed a loan to pay for a hot water tank.
On the other side of the issue, the trade group representing payday lenders, the Community Financial Services Association of America accused Allied Progress and others of being hypocrites since their websites featured portals that allowed commenters to submit comments.
The Senate staff recommended that Congress amend federal law “to clarify that agencies should not accept or post abusive, profane, or threatening comments; irrelevant comments; or comments submitted under a false identity.”
The Senate staff reported that agencies said that requiring commenters to identify themselves might dissuade some people from providing information.
And the staff said that the CFPB has updated its policies to take steps on a case-by-case basis if it becomes aware of comments submitted using someone else’s identity or are otherwise suspicious.