While most of the debate surrounding the pending financial reform legislation has focused on whether the bill would end government bailouts and other "top line" issues, there has been little discussion on the bill’s impact on the privacy or civil liberties of citizens. This is somewhat surprising considering the usual scrutiny that is accorded legislative provisions that wander close to such sensitive topics.

Two particular provisions in the Dodd bill should garner scrutiny. Section 152 (page 63) of the legislation establishes an Office of Financial Research, while Section 1001 (page 1030) establishes a Consumer Financial Protection Bureau. Within the Office of Financial Research, the legislation provides for the creation of a new "Data Center" and mandates that it collect and maintain "all data necessary" to monitor the financial system. Additionally, the Consumer Financial Protection Bureau would collect any information it deems necessary from businesses and consumers, including personal characteristics and financial information.

Americans would be required to provide the new consumer agency with written answers, under oath, to any question posed by the Bureau regarding their personal financial information. The Office of Financial Research would have subpoena power and unlimited funding to mine and monitor every financial transaction everywhere in the country.

Most troublesome is the combination of the new agencies’ extraordinary powers with the fact that these new agencies would not be subject to Congressional budget or appropriations processes.

These agencies could track what individuals buy and who they buy it from. This information could be shared with other government agencies. There are no limits on what government agencies could do with this information. Bureaucrats could profile Americans’ behavior. If they don’t like decisions we are making, they could decide to restrict those decisions accordingly. Equally troubling, one data breach could cause public disclosure of Americans’ most personal information.

These provisions, among others, raise serious questions. How far should the government be allowed to go in mining individual and business financial information and use it to formulate government policies? Is this unprecedented invasion of financial privacy a threat to civil liberties and economic freedoms? These are serious questions that need to be resolved in the current debate.