that but that is all that we do end maybe a the speaker was right. with the federal reserve they're all in the data collection business. we can create this attitude to give money to the taliban i did we take this too far. i yield back. >> appreciated very much we appreciate it. coming from the private sector for 35 years running small companies. you have to be accountable

all the time with a business background your employees, customers, but it seems to me we should do the same with government but unfortunately it does not happen very often. and made was on the board of the housing authority and shirley after i realized he had a five-year term appointed by the governor and could not be fired. he had no with a worthy with a funding source that was independent than they have 6,000 families waiting to come in from out of the pull them have a public housing authority spending money on pewter programs for prison

inmates. as well as in a request from the board held the operation was performed was ignored. that they found out there respective tries to build a one-bedroom apartment they had a single family home on a quarter acre. so we would change the law to be sure the executive director reported to the board with financial controls by the time we left the cost per unit had dropped 45% and we helped hundreds more families. and i am looking at the cftc -- cfpb the reports to nobody the director has a five-year contract, a revenue stream and i am

asking if it makes sense of the executive director shows up six months ago to convince us that it is a darn good idea to spend $216 billion on an office building and they don't own it? a two-story waterfall and reflecting pool and a playground of the roof? how can we trust these people to collect the data here in america forever from these? we had a major breach of data security with the largest health insurance provider in the state. thousands have their data violated. so why ask you mr. speaker, what can we do to fix this? to you trust this organization to collect the data and how do but sit?

>> faq. i have to confess that entire story is amazing if robles be a study of its own right. but to set the record straight pope department of justice and ftc had consumer protection and responsibilities prior to december 1 dash 2,008 so the notion of basic per bureaucracy on top of the others because it would be terrific you described arrogance of power because they're not controlled so why shouldn't they have their waterfall in the atrium? why shouldn't they think i am here to protect america based on my prejudice with my ideology argue lucky to have me as the savior? that shows you why not to be abolished to break it up them put a back. but they will not tell you

all of the various data gathering techniques but we are told there are consumer data at companies that includes personal data. and get burned modern technology. >> for those listening in a tangible example of how to connect data accountability. if you have specific banks of data they were at high risk and i would raise the question they will tell us everything is fine until the next breach we're in a

competition of the free market of hackers worldwide to operate without red tape or limitations and bureaucratic structures that is low end incoet no reason to believe this will be better than o p.m.. billions of data points. >> would you support a five person governing panel at the agency? >> i would not.

as the ranking member mentioned there are lots of agencies. >> bluetooth support under the appropriation process? >> no i would not. the other bay gave me give hitters are not subject to the appropriations process but they have funding from the entities that are regulating and it prevents them agency to be subject that makes them broken in every respect to deny that is why they have sold many hearings with to a bendy bureaucrats. but what we hear from my colleagues on the other side of the aisle no offense to

the breaking member she is passionately she is wrong they're not smart enough to make decisions on their own so bureaucrats and politicians will tell them what to do. to compare data collection till my county and by rural district is a joke for girl look back at their reasoning behind dodd/frank and cfpb and in a lot of respect it was danny and freddie influencing the private sector telling the banks whose to loan money to and who not to. get to the facts. for my friends on the left, they see the private sector as a problem and everything should be done in washington by bureaucrats and politicians. this is a slap in the face to the american people. they are figured out -- they

are smart enough to figure out what works and when does the end doesn't need the people in washington to do it for them. >> if they would use this to responsibly are you concerned with the lack of accountability? >> edits the serious problem that all you have to back for accountability is the public exposure that they claim they rely upon but would get the decision they have made rather than rely upon the data they cherry pick the data the process they don't reveal to the public to say this is what the data tells us what you do it in one case they have demonstrated the value read

they did put the data out for people to look at it ended disproves of functions but encourages the public and that is what we need. >> going back to funding messages funded the same way but it is widely accepted they fell down on the job and of course, mr. greenspan, mr. b ernanke or ms. shelton are not accepting contributions from wall street. they screwed up for a number of wall street's - - wall street that is an illustration of why you don't want one single powerful person. and the all the way we know there are discussions is one

of the board members forced that conversation that would not have been had a single director. ray to clearly state for the record cfpb is not part of the federal government that is broken. i don't subscribe to the two wrongs make sarah wright theory. that does not justify as to the something broken. >> my time is expired. hopefully republican administration and will take over in 2017 and they will sing a different tune at that time. but remember to your point too long stowe the right. we need to call this out for what it is then the republicans did it would be wrong also.

give the american people some credit there are smarter than washington. >> the gentleman from arkansas. >> they give for calling this hearing they serve so long ago on the senate banking committee staff. many moons have passed for go but i feel like rip van winkle to say this behavior and this is not the first time. because been run -- teeeighteen would scoop them up so they could not be identifiable. my whole problem is just because you can does not mean you should with a

massive data collections with a sample would do just as well for a trend analysis. and with the regulatory system based on looking at institutions and the activities of the institutions on a small scale based to make the determinations a good or bad job with consumer legislation. it was not a sweeping 170 million loan records that are now in the hands of the cfpb. in my district in arkansas taken up by 70 cases of fire resident a theft that is all we talk about in my office. i have concerns about that.

and to be here in their reenforce is why i ran for congress in mind the people of arkansas elected me because once again i feel like the chief apologist for the intrusive big brother big government solution. we have had hearings in this room on the target breach, retailers and bankers testify about blood reaches end bills moving in the energy and commerce committee settled make the assumption. >> and those are good efforts and the committee is making a fax with a loss to journal was quite clear in the native back to read and that has gone in the world record in the most recent effort.

to understand the of market that it regulates. for the individual firms to deal with the market's to collect 87% of the credit-card market. 95% of all credit card accounts. is there any justification which you can just do a survey for a small sample for any analysis? >> in the "road to serfdom" high-tech made the argument in the centralized planners

have a a fact based approach to have ideologies it is very funny in essence imagines you have president cruz or president trompe with that collection agency that person is now in charge of the data so instead of being anti-dash lead they are pro-gun. you need to understand if you have total power in one person's hands not total secrecy but remarkable

secrecy. you are creating a natural pattern that leaves too dangerous behavior for this reason. to exercise the power of the state and their ideology to destroy a new route people because the government is so big a powerful. it is not the way we should be going in direction levy for say in this is an

important topic and i overstate my view for data security me to have witnesses here the news from our read this is that go far beyond what we should be discussing yet he and. how it was established talking about the budget what this is scheduled to do and did say disservice to

indiana our constituents. also with your expertise as a cybersecurity expert. i also know you are a paid public affairs consultant. >> at which not classified his expertise but on cyberissues over 25 years as speaker of the house to spend time of the national-security agency. all you have to do is click bader of the newspapers the increasing frequency of

cyberactivity in the ability of the government to protect itself that doesn't require a massive level of expertise. that would be wise for the subcommittee for those who have cybercapabilities to explain why this is dangerous. for the mask data collection program. it is dangerous in the age of metadata you could identify individuals from supposedly anonymous information and. you can go through this but i will assure you spending time with the cybercommuned i am not a cyberexpert. >> i have to move on. but with those articles let

me ask you this. some the have commented the cfpb is vulnerable to hackers because of their heavy reliance on cloud based computing. cad you tell me how you feel about that? water better practices from the experience that would be better? >> if you talk to people at the pentagon. >> in your opinion. >> want to hear from you. you have shared you have this experience and you have been the most critical if i want to discern and separate if this is pre-disposed of articles i have kept out with ideas against the organization so keep this in the context to give me

specifics that you have city year today not that they may call in the future. >> briefings. if you aggregate this kind of data you always have the potential to identify individuals and i can give you technical experts who would explain that. >> is a you don't have any that you can give me? if you are the real expert taking up my time. thank you very much. can you answer that question? >> our testimony focuses on the policy-making process without a single director. >> that is not my question. my time is up.

>> that is our testimony. >> but that was not my question. be clear on that. >> one of my favorite memories was to be with you rand your wife for the reagan 100th birthday. thank you for being here. i appreciate the work you have done. i am troubled by what we have heard what happens to consumer information if it gets it the wrong hands and our aggressive people are to get disinformation we should be held to the highest standard but october 15 cfpb released its final rules of collection the hall will mortgage disclosure act required cover banks and credit unions to collect up each loan they make it is more than double the with

their current a required to collect. with the automated underwriting system property value origination in charges and discount points loan terms and prepayment penalty interest rates and loan originator identifiers this is a lot of information and although not directly related it can still be revealing a understand regulators make use of the data but i am concerned the risk for homeowners. speaker gingrich the opm cater breech how those controls may be inadequate. how can you assure the american people their personal information is

safe? >> first call you cannot but i got one of the letters of the 20 million that said my dado was preaching a one to do something called this number. water they going to do? we don't know where their breeches we don't know it is nonsense. the fact you can live through this to watch this failure and have another bureaucrat politely tell you we're save. they don't know. if you are not offline by definition you are packable. this is a major crisis for the whole government. in the words of john mccain who is very worried we're not able to innovate rapidly enough inside the

bureaucracy to keep up with the private sector evolution worldwide. always worldwide oppression and estonians and israelis we have to understand the threat. that is significant and i would encourage the committee to get people from the mightier carnegie-mellon and then you should be afraid in not be reassured. >> i believe you're right there is a briefing this morning with department of energy in cybersecurity with real concerns and real threats with real experts who are having nightmares of what happened and this is just as widespread. just yes or no, but cfpb final rule did not stay which new data would be made publicly available.

with the opportunity for public comment would be appropriate would you agree this is a good position? >> i agree. >> yes. >> joe back and focus to the doctor do you have thoughts on why the cfpb went well beyond the new reporting requirements? they love to save their data driven but doesn't that raise more privacy issues? >> it is a serious concern with more than two dozen additional data us segments than what they ask for there was inadequate discussion with david do with it and we need that public debate before rather than afterwards. >> i agree. even before this that you could link to the courthouse records to identify individuals even without the

database. >> this feels like such an overreach absolutely the wrong direction to go we need to make sure it doesn't happen. >> the gentlelady from utah. >> i have to tell you you have an idea how dangerously powerful some of these regulatory agencies are. before you get here but i cannot tell you how shocked i am to realize that casualness we talk about collecting people's private information. . .

what is being done with that data. these are the questions that is not just going from me but my constituency. so i do this work on behalf of them. we have learned that the way the cfp be uses data and interprets the data is highly suspect and that the result, this is posted redress was not correlated with the actual harm. there was a lot of guesswork involved. the guesswork resulted in the cfp be imposing more requirements. the auto lending market which results in higher cost and less choices for the

consumer. so now in addition the cfp be has been collecting data regarding credit card reports, credit reports, credit cards, mortgages, student loans, payday loans, and other financial data. over the past year i have been investigating some of that activity specifically in regards to payday loans in overdraft fees. my question is, what other cfpb actions do you see on the horizon, what other disappearing options for services that consumers when they are looking at me to worry about losing. >> if i may, congresswoman, one of the areas we are concerned about is the ability to serve the market for short-term and small amount loans.

ourour estimate is that there are 54 million customers each year in the market for small loans, short term loans for less than a year and the bureau is on the verge of decreasing significantly the access to those kind of resources. there is a payday lending role that estimates are will eliminate 80 percent of the market. we are concerned that they are looking at overdraft for people who have bank accounts use the opportunity to overdraw their account to obtain immediate short-term credit for a variety of needs. and yet we have looked at the way that they expose data, one data segment that they put forward indicated the median average overdraft is $24 for which people pay $34. if they actually look at

what happens with all of the data for an institution they discover the amount of credit that customers receive versus what they pay for for overdraft is something like seven to eight times the amount but by manipulating the data in ways no one can get at and challenge they end up promoting policies that could choke off the opportunity for overdraft. >> so far what i have seen, the people they have vowed to protect other ones being hurt the most. and i just want to say because i am not here to necessarily change the minds of my colleagues because a lot of their minds have been made up on both sides of the aisle. i am here to make sure we are transparent and give a fair warning to the american people that if we continue to allow this to happen the only people that are at risk of them, the american people. let me just say right now, if we are not vigilant, if we do not cry out and make

our voices heard that this is unacceptable and we are smart enough to make decisions and if we do not do something now the only people that are at risk that have the risk of losing everything is the american people, and i yield back. >> the gentle lady yields back. the chair recognizes the gentle lady from minnesota. >> thank you. thank the panel. you know, i appreciate you having the time to discuss this issue. i would like to ask you a question. unless your profits come from deceiving consumers you should welcome the cfpb data collection. can you explain what you meant by that? >> sure. the reason we have the cfp be in the 1st place is because we have a massive regulatory failure, a financial crisis that resulted from all sorts of friends lending that was tiunchecked, people

asleep at the switch, no one looking out for consumer protection. the federal reserve board was looking out for other things. and so we created a single agency that is the voice of the american consumer, standingconsumer, standing up for american consumers and trying to prevent the kinds of practices that did not harm people with subprime mortgages. they threaten to take the american economy. unless your business model is based on unfair and deceptive practices you should have no concern about transparency in the cfp be having the data and using it as a tool to do better consumer protection. so honestly when i 1st saw the panel lineup i thought to myself my friend mr. gingrich has a phd in history and may no a lot

about that, but what does this show about big data? it turns out you actually do know a lot about big data because let me put it like this. republicans in general claim they have collected more than 300 terabytes of voter data including more than 725 billion data points on nearly 200 million american voters. this information is matched to individuals and voter data files which contain personally identifiable information, home address, phone number, e-mail. not only are they collecting voter data, some of it lends out the data to other campaigns. they leasehaley stated a marketing firms and other private entities. for example, presidential campaign for newt gingrich 2012 reported getting

$17,000 in the most recent sec reporting cycle even though that campaign dropped out of the primary more than three months before. a separate company also uses a list -- uses a list broker to sell personal information via tma direct for the low price of $120$120 a month. you can get access to nearly 500,000 individual personal information who were never before on the market. so i had my doubts about whether our panel was qualified to offer opinions, but clearly, clearly you know something about making money off the data. i guess my question is, if it is okay for you to sell

big data with personal information, why can't the cfpb rely on anonymous data to protect consumers? >> look, that is a great question. a brilliant set up. it is true that we have carefully studied the 2008 and 2012 obama campaigns and while we are still behind them and gathering metadata and don't have quite the ties they haven't silicon valley and major intellectual centers comeau we were doing everything we can to be at least as good as using metadata. i appreciate your recognizing while we are 2nd, we are working hard to catch up. you put your finger on it. i cannot go to somebody and threatened to cut off bank loans, threatened put them in jail. peoplejail. people who happened to be on my list voluntarily signed up to get information.

and they can voluntarily get off the list without having a bureaucrat: threaten. if you look at the power of the government and imagine random independent bureaucrats who aggregate to themselves the right to decide what my consumer choices should be, that is real power. we are just a private company doing private things in a free market which is why ii am so frightened to see this much power in the government. >> and making a good penny added in personal data. >> the government yields back. the chair now recognizes the ranking member for five minutes. >> thank you. let me start with a few questions, and i would like you to raise your hands if these questions apply to you. if you are in any way now or ever connected to the us consumer coalition would you kindly raise your hand. but the record reflect that mr. gingrich is raised his hand.

if you are now or have ever been paid by the wise group, if you would raise your hand. wise public affairs group. thank you. mr. gingrich,you. mr. gingrich, as you is your hand both times i would like to know more. before i get there i want to go back to something you and i broached earlier and that has to do with your statement because in your statement you indicate that you are an advisor, in an advisory capacity. i was hoping that you would do what was done when the "wall street journal" had to issue its additional statement, and that is indicate that you are a paid advisor to the wise public affairs group because you well know that the wise public affairs group owns and operates the us consumer

coalition. so, i was disappointed that this was not called our attention, and it has been indicated this is not the 1st time this is been done you pride yourself and transparency. for some reason you did not reveal this money connection. you were willing to reveal that you have to advise, but you are making a profit based upon this advice because you worked for the wise group. if i have misstated this about your working for the wise public affairs group and also being connected to the us consumer coalition would you kindly raise your hand again? let the record reflect that

what i said is accurate. and this is why we bring this up. this us coalition, consumer coalition is out to emasculate the cfp be. it has published its intent. there are many of us who are of the opinion that the cfp be serves a meaningful purpose and that in serving this meaningful purpose cfp be has done a good thing. the cfp be makes it possible for consumers to receive restitution after they have been harmed, and it is unfortunate but fair to say that if the rule that you would have us adhere to implemented, then there are

many consumers who would not receive the benefits that they have already. the personally identifiable information is not by law permitted to be used for market monitoring. but it can be used for enforcement activities which means you find out that a consumer has been harmed you can then contact that consumer and so you have been harmed as was done with the four half billion dollars in relief given in that collection, 50 million in civil penalties. 125 million to consumers for auto finance enforcement defrauded, taking advantage of, 25 million and related civil penalties. mortgage lending for mortgage lending

enforcement. 55 million of that in civil penalty, 20 million per student lending enforcement, 2 million related to civil monetary penalty, $19 million to consumers for payday enforcement activities. over 10 million in related civil monetary penalties. if weif we decide that we are no longer going to allow the cfp be to aggregate information for enforcement purposes we now take away these dollars that are going to consumers because we will be able to find out who they are. the truth of the matter is enforcement activities benefit seniors. this would eviscerate it to the extent that it would be emasculated if not eviscerated such that it could not continue enforcement activities. seniors, senior, senior

citizens, consumers. ideal back. >> the gentleman yields back. taking a page from the ranking member, we will you raise your hand if you are surprised that former speaker newt gingrich is fighting limited government and more transparency? you are not surprised? consistent with everything this man is done. >> i am surprised he is paid. what i find unique is my friends across the aisle want to do everything to attack the former speaker when this is consistent with his life's work. we are talking about big data and abuse of power. ipower. i commend the speaker for coming in and lending his voice of this issue.

question to the panel, do you all agree that american consumers are at risk of having their data taken from the collection at the cf pb? >> yes, sir. >> yes. >> i would say of course there is a risk. >> of course. >> is their another agency out they're that goes by the consumer financial protection bureau? anyone? >> no. >> the one that is here to protect consumers is also an agency putting consumers at risk with the data that they collect. >> no. >> you just told me. >> it is a false construct. >> no, it is not. >> the risk in the private sector is far greater. >> it's no different. >> a big difference between the private sector and big government. if i choose to go to the dmv

i no that. if i shop shop at target on people they have my information and i know it. the american consumer actually knows that the consumer financial protection bureau is collecting the information. do you think that they know that? >> i don't believe that they do. >> do they ask the people that they claim to protect if they can collect personal information? >> they go to the institutions with which people have a voluntarily entered into business relationship. >> so they don't ask them. >> they don't. >> the very people they claim to protect they don't ask for data and put those very people at risk by housing the data. >> i guess i should be careful but i remindi remind the committee that the 4th amendment does not apply in the private sector. what the 4th amendment does is constrain the government which is what we

should not lose sight of. >> that's a very good point. another concern, you made the point that this agency is better because it is not subject to lobbying and outside forces. they can do the goodwill of the people without being subject to the people. >> all agencies should be held accountable. >> i chair the oversight committee. we have asked for countless documents, and if they don't turn them over do you think that they are accountable? >> i do. >> if they don't give me all the documents. >> if there is another agency that can come to the helen testify more than the cfpb, i'm not aware of it. >> when the model be better than if the epa, doj, health and human services, department of human services were not subject to

appropriations but coming give us lipservice hearings call with the democracy be better off? >> ii understand why people want to coerce and control the american people and ensure congress cannot represent people in an effective way. i want to go back to the ranking member. if in fact the cfp be does not know about individuals how did that money get back out? the case that i am told that they are paying white americans for racial discrimination. you cannot have it both ways. the idea of trying to stop 2007 and 2008 make some limited sense.

the idea that we leap from that to deciding that we are going to look at everything anybody doesn't america remarkably secretive. >> my time is up. the chair recognizes himself for an additional five minutes and will also then recognize the ranking member for an additional five minutes. to that point i would agree with you. personally identifiable information is taken by the cfp be contrary to prior testimony. he now agree that they do collect personally identifiable information. >> yes or no. >> you have to be clear. >> i'm going to reclaim my time. does the seat is pb collect

personally identifiable information? >> the only -- >> i we will translatei will translate that. the answer is yes. >> the consumer complaint database into the supervision process. [inaudible conversations] >> by which you indicate they collect. they do collect. under arbitration cases they collect personally identifiable information. and storefront payday loans. >> to subject the american people to cyber attacks.

he tried to 1st say to this committee and to your clarified statement it is collected. >> ongoing market monitoring. >> i wanted to make two quick point. if we said that somehow j.p. morgan, jamie diamond is responsible to j.p. morgan because he appeared in front of his board twice a year would think that is ridiculous. the notion i think that's absurd. we had a financial crisis. a number of things in the 1st has done. not a one was because of financial crisis.

when they had an opportunity it punted and gave up on checking credit, down payments. set before this status year and a half ago and said that the most important part of .-dot frank were essentially gutted. essentially if you want the agency to do something you have to recognize the financial crisis was not caused by payday lending, arbitration the shoddy mortgages. in that instance -- >> the gse's. >> we basically said anyone who had anything to do with the crisis is exempt. the stop pretending this agency as was connections? >> if you are accountable to the american people by way of congress if you disclose not just the data but the

purpose comeau what are you using? the nsa has been clear on the parameters in which they use the data point they collected, there has -- tell me if you disagree that the cfp be has not set up guidelines for how this data will be used. they told us a few, but would you agree that they have not thrown out? >> gather an enormous amounts of information, keep the data in-house and parse of the pieces of it, it's like being in a court case where the prosecutor says here's the information i'm going to share which shows you are guilty that you don't have access to the other information i have. >> are going to go to gingrich one quick 2nd. the cfp be whether you like

it or not is an power to make rules. i want to make sure the rules that make a good roles. but do you think that they could obtain good data the way of sampling as opposed to both data collection? i know that you have looked at a lot of polling data that is pretty representative of the country as a whole. long-term both data collection. >> it depends on what you're trying to accomplish. if they want to know if there are patterns you can do all that by polling. if you just think about the logic of what they are now doing, what you are seeing is an effort to assimilate all of the consumer behavior in the united states and one analyzer will system for the purpose of a group of bureaucrats making a decision about whether or

not it is unacceptable behavior. it's a very practical thing. they would like to have the entire economy at your fingertips so that they have control so they can decide which parts of the economy are appropriate. >> in my time is expired. i now recognize the ranking member. >> thank you very much. would you make the distinction between monitoring and the supervisory activities? >> elaborate. >> it is, theis, the cfpb allowed to collect identifiable information? >> it is not. the dodd frank act makes that illegal and the cfpb is obeying the law. >> and if someone has information to the contrary, if you have information indicating the cfpb is

collecting identifiable information would you kindly raise your hand? >> one of our concerns is that we don't know what the bureau is collecting. >> my question is -- >> we don't know. >> no one in america. >> you will not use conjecture and speculation to in some way skew this issue such the people would be confused? happens to be of benefit. and mr. gingrich is gone so far as to say that it is imperative that we move toward abolishing the consumer financial protection bureau, abolishing it. the same desire of some of the entities that he works for. it is important for the american people to know

who's working on their behalf, and you can confuse the american people with enough of this rhetoric answer to the benefits them, setback all this money $11 billion in relief to consumers and it would all be evaporated. that would not have an opportunity to get the money back that they overpaid of the money that they suffered a loss which references some kind of fraud or scam. the personally identifiable information is used. as we go through this process it is interesting

sort of a campaign under the radar entities that can't be properly identified you don't know who is on the board of directors if there is one. over million dollars unbelievable, i agree with the ranking member that people of this country are absolutely being said that information, yes they are

intelligent, yes that they can do it if get that information. when you put so much emphasis, several with reference to this organization, this mystery organization. so much more to be said, but if you want to add in the record the news article baffling response to disclosure failure and i would also note that in this jones article there is an indication that the wise public affairs group set up

the coalition, the consumer coalition and that the members of the staff seem to double as members of the coalition. does anybody no if the board of directors associated with this coalition, if you know the board member raise your hand. >> the gentleman yields back. and i believe that concludes all the witnesses that we had. i want to thank the witnesses for the testimony and rigorous debate. five extra days to submit additional questions to the chair which will be forwarded to the witnesses. ask witnesses to respond promptly