terrorism in paris. also the u.s. is facing terrorist attacks which happened recently when 14 people were killed. we need to come together in fighting terrorist organizations whatever their mottos may be. and we very much hope that this new alliance will pursue a common interest and will work out effective mechanisms of control.

>> the oversight investigations subcommittee will come to order. the time at the hearing is examining the consumer financial protection bureaus mass data collection program. without objection the chair soccer sadrist to declare recess of the subcommittee at any time and without objection all members will have five legislative days in which to submit extraneous materials to the chair for inclusion in the record. the chair recognizes himself for four minutes to give an opening statement. the consumer financial protection bureau is fundamentally passed with protecting americans from unfair or deceptive and abusive financial practices. ironically as it was sold of a massive data collection activities the cfpb is putting all americans all of us at risk. from january 2012 to july of 2014 the cfpb carried out 12

large-scale data collections including the monthly collection of data affecting hundreds of millions of credit card accounts, 173 million mortgages as well as information on 10.7 million consumer credit reports. five of these data collections are ongoing. not a day goes by that americans are not made aware of yet another breach of their sensitive information whether it's in the public or private sector vast collections of personal consumer data are prime targets for cyber attackers. aside from the fact that cfpb does not need to be collecting information to carry out its tributary mission it's troubling is not taken more perfect steps to secure this data. in fact before this committee last year cfpb director cordray said he could row of the potential for data breach at the bureau. we now know and the american people don't know how much

personal identifiable information or pii they retain. how that is protected with the bureau plans to do with all that data. will the cpb claims it collects very little data that contains pii collecting non-pii data may endanger consumers. a recent study published by m.i.t. led researchers found that four pieces of information about a person's credit card transactions was enough to re-identifying the anonymous credit card data and 90% of the cases that they study. dodd-frank granted the cfpb expensive and intrusive authority with very little accountability or oversight. however the cfpb's data collection programs appear to exceed the mandate included in dodd-frank. under the guise of its supervisory monitoring and examination authorities the cfpb appears to have subordinated consumer's interest with the data collection programs. what is more concerning for the

cfpb claims to be an information driven agency it seems the cherry-picked data to justify pursuing a politicized rule-making agenda. for publishing unverified consumer complaints on this web site using unreliable methodologies for auto lending the agency has proven time and time again that it will present only the most convenient of quote facts for its purposes. not bleeding data to validate a regulatory outcome is not sound public policy. this is junk science. the cfpb's focus on responding to actual allegations of consumer fraud and discrimination rather than collecting data for the purposes of undertaking costly and abusive expeditions that i welcome our panel here today of witnesses and i look forward to hearing from them as they present their testimony. i nagged you five minutes to the

jumo protects is the ranking member mr. green for five minutes for his opening statement. >> thank you very much mr. chairman but i would like to thank the witnesses for appearing and i would like to acknowledge the presence of the honorable former speaker of the house and for our purposes today because he was the speaker i shall refer to him as mr. speaker. i am mr. chairman antithetical to most of what you said and i am also concerned about something that has occurred. mr. speaker, someone owes you an apology and someone owes you an apology because on the memos that i have received and on the witness list you are acknowledge to to have been the former speaker the former speaker of the house and indeed you should be but there is no

acknowledgment of your affiliation with the u.s. consumer coalition, and generally speaking this is what we do here. i have a document that i shall ask unanimous consent to be placed in the record. >> without objection. at this document is dated july 23, 2015 on the financial services majority staff and its members of the committee about the dodd-frank act five years later. and it indicates that we were having the -- to appear in the case that he was senior partner of u.s. policy metrics and he's a former united states senator. the honorable bradley miller of counsel with grayson ellsworth

llc and former member of congress. i'm going to ask unanimous consent that the record be corrected so that it will be indicated on the memo and the witness list that you are mr. speaker, you are associated with the u.s. consumer coalition. i ask unanimous consent. >> if that's the case, without objection. >> i would also indicate why i have done this mr. chairman. he wrote quite a few articles concerning this coalition, this group. it appears to be a corporate owned and subsidized synthetic

grassroots organization. the activist consumer organizations know very little about it. the 501(c)(4), no way to ascertain who really funds it and i think it's very important for us to know who is really coming after the cfpb, and this organization has a mission statement that coincides with much of what has occurred here in the congress of the united states of america. so i'm going to have to yield some time to the ranking member but i think it's important for us to go into this. i have several articles that i will be entering into the record and having to use the speaker's statement for today. i'm going to assume that is just an oversight because nowhere in the statement does it indicate his affiliation with the u.s. consumer coalition.

this oversight has occurred or than once because it appears that "the wall street journal" said to issue an amplification of the result. this is something that has been called to our attention by various sources, one being media matters. but this i will now yield the remainder and residue of my time to the ranking member. >> thank you very much. i appreciate the time. as we sit here today to talk about the cfpb data collection practices, the cfpb uses the dated users to collect potentially harmful products are not permeate the market to inform the agency's rulemaking effort to conduct critical supervisory oversight and to return money to consumers that have been harmed. unfortunately my colleagues across the aisle are not here

today to discuss data collection practices. instead, this hearing is simply another blatant attempt to mischaracterize the bureau's data collections activity is harmful to consumers. how do we know this? because the chairman of this committee previously sponsored a bill that was enacted with the authorized creation of a national mortgage data repository that will collect the same individualize personalized data that republicans shamed the cfpb for collecting and that's the subject of this very hearing. currently most of the data that the cfpb collects his public and not personally identifiable. but the gao and the cfpb inspector general have indicated that the cfpb is generally compliant with data privacy and security laws. nevertheless my republican colleagues are here today to again criticize and under vine and agencies that is returned

more than $11 billion to 25 million americans. i yield back. >> the gentleman yields back the time that she does not have. the chair recognizes the vice-chairman of this committee mr. fitz patrick for an opening statement. >> thank you chairman for the hearing and welcome to the witnesses this morning. increasingly our cyber and the structure and private records are becoming targets of state and nonstate actors alike. i want to remind anyone here that the personal information from the opposite personal management and i suspect we oversee that letter were significant breaches of consumer data that occurred. any organization especially an agency of the federal government in nine states which consumer data and stored in a single location as the cfpb does especially when according to a gao study the cfpb lacks documentation is for the

security protocol to store private consumer information in a manner sake from hackers. what's more it seems though that the date is off limits to the cfpb. while congress has not been provided a complete picture of these actions we know one of these collections yielded data on 173 million laws would tour to the hearing and today's witness testimony we hope that allows us to develop a better understanding of its practice and if there is a legitimate need for federal practices to continue. i yield back. >> the gentleman yields back. i now want to welcome our witnesses and because they do want to at what point guitar testimony and not going to spend an hour giving all of the things speaker gingrich has done. what i have realized recently though he is a fictional author and just wrote a great look which my wife is completing. it's a page-turner. i didn't realize that but i am going to stick to the basics. he was elected to congress in

1970 from the sixth district of georgia and this will now begin the speaker the house in 1995 to 1998. speaker gingrich welcome and thank you for being here. i want to welcome mr. wayne abernathy. the executive vice president for financial institution policy and regulatory affairs at the american bankers association. welcome. dr. calabria welcome again. he is the financial, the director of financial regulation studies at the cato institute and finally but not least mr. deepak gupta is the founding principle of gupta kessler in washington d.c.. welcome panel. each of you are going to be recognized for five minutes to give an oral presentation of your testimony. without objection the witness's testimony will be made part of the record following their oral remarks. once the witnesses have finished their testimony each member the subcommittee will have five minutes within which to ask the panel questions. as her mind of many of you know

this but on the table you have three lights. one is green and that means go, yellow means you have a minute left and red means you're time is up. i would note if you get a question why your light is yellow i will give you the leniency to finisher question is a goes on to read but please go on for a minute or two. the microphones are sensitive so please make sure you are speaking directly into them. in fact speaker gingrich welcome and you are recognized for your five minute presentation. >> good morning and thank you for allowing me to be here. i do want to say about mr. green's concern if either he or his staff would read the testimony they would find on page three i describe my relationship as an advisor to the u.s. consumer coalition but the subject of today's hearing is important and that we have an agency collecting more information about american's private lives than any

bureaucracy deserves for reasons unrelated to national security. it's also important a broader sense. today the consumer financial protection bureau is so far outside the historic american system of constitutionally limited government and the rule of law it's the perfect case study of the pathologists and bureaucracies at the federal level. it's dictatorial, it's unaccountable, is practically unrestrained and expanding on its expansive mandate from congress and its contemptuous for the right studies and preferences of ordinary americans. the cfpb is all of these things as are many of our large district of bureaucracies in the city, a huge problem. the cfpb is an especially good symbol of these methodologies because of its unique structure among regulatory agencies. in the dodd-frank wall street performing consumer protection act that created the bureau congress berrien wisely in my opinion gave up two of its core constitutional powers for

reining in executive branch agencies. first the cfpb is not subject to the annual congressional appropriations process and instead is funded out of a fixed portion of the federal reserve's budget and ineffective at bureaucratic slush fund that is self defined by the brocker sees on their behalf. second instructor can be fired only by the president and then only under limited circumstances because dodd-frank prohibits protection, dodd-frank protection from being removed by congress. for all practical purposes this means the bureaucracy is free to do whatever it wants in the broadest interpretation of its authority without fear of losing its funding or its leadership. this is a very dangerous recipe for petty dictatorship and its completely foreign to the american model. i always remind people lord acton's faith -- famous dictum

power tends to corrupt. absolute power corrupts absolutely and notice he just attends. no better example of the corruption of power than this agency which is totally secret, totally unaccountable spending vast amount of money having huge cost overruns and doing what ever wants to to have to whoever feels like doing it too. we know this is dangerous because we have watched the bureau's behavior over the past four years. we have seen the contempt with which it treats congress and the american people. the cfpb is prohibited from regulating car dealers. it's done so anyway. it's an absurdly inaccurate technique which by the way in the private sector would lead to lawsuits over fraud. accuse them of racial discrimination and extract find from companies and auto finance companies. he your government is a bully and your government is a blackmailer. this hearing is another good

example of cfpb soper reached one i also discussed to my own article in "the wall street journal" last summer. the cfpb is prohibited in section 1022 of dodd-frank from collecting personally identifiable information on americans but the bureau is doing so anyway and it's doing so on a massive scale. the most controversial collection programs are much less compelling reasons. the cfpb says it aims to monitor at least 95% of all credit card transactions in the u.s. by 2016. toward that end the bureau is collecting data from at least 600 million credit card accounts each month. that's 7 billion records in the last year alone. it's not just credit card data. the cfpb is gathering data on private markers every month, 5.5 million student loans, and hundreds of thousands of auto

sales credit -- these intrusive data operating art taking place without consumer's knowledge and without the ability of consumers to opt out. unless there are occasional oversight hearings with his consumers are unaware that government bureaucrats are pouring over their credit card transactions looking for products to regulate. the cfpb is scooping up or information about law-abiding americans than any government agency should be permitted to collect for reasons unrelated to national security or law enforcement. in fact in a recent poll conducted by zogby the dealer's consumer coalition which i happen to -- let me repeat that census director but i want to share particularly with mr. green staff were to happen to advise. i'm not secret about the relationship. one in five americans said the cfpb should be allowed to gather credit card statements without consumer's knowledge.

those were concerned about the intelligence data collection effort i don't see how you can be worried about the potential for abuse and the justified lack of transparency and national security agencies and not be concerned about the same dangers in this large amount of bureaucracy armed with similar kinds of information. this is the absurdity of being told homeland security will not look at facebook pages of foreigners out of concern for the privacy while cfpb is gathering up all this data. let me just say certainly for the purpose of preventing terrorism to cfpb should need a warrant to. what we have at the cpfb is an agency not accountable to congress or the american people. an agency that is stretching the boundaries of its authority as far as a canopy or proceed which for all practical purposes is out of control. as the mac and peoples represents a congress that should bother you no matter what side of the aisle you're on and whatever you think are the preferred regulations.

it's imperative that we move moved toward abolishing the consumer financial protection bureau and at the very least subject it to annual appropriations process in addition to restructuring its leadership to make sure it's accountable to congress. thank you i look forward to your questions. >> mr. abernathy you are recognized for five minutes. >> thank you chairman duffy and ranking member green for this opportunity to testify. my name is wayne abernathy. the customers of thousands of member banks were affected by the actions, policies and decisions of the consumer bureau. the bureau has enormous authority for retail financial property, those who provide them and therefore over the people who use them. this power comes with little more than phenomenal oversight and accountability. it would be hard to find a federal agency where the gap between regulatory power and public accountability is greater

officials repeatedly assert that the bureau as a transparent and data-driven agency. public exposure and data are to be the checks on the natural tendency for any such agency to stray into arbitrary actions. i emphasize the bureau is governed by one person. no one in the agency can address him without ultimately bending to that one person's policy judgment. knowing that at some point in the discussion at will and with yes sir. we welcome the subcommittees inquiry into the question of how strong a check on arbitrary behavior are the bureau's data policy. and practices. how much is the bureau in fact data-driven and by which data, from which sources and how would we know?

director cordray stated the following quote at the consumer bureau we are dated driven agency. the best decisions will be those that are best informed and quote. the bureau strategic plan for fy2013 through 2017 includes the following quote, we take in data manage its storage sure to properly protected from unauthorized access unquote and this from the bureau's web site on a page titled. transparency is at the core of our agenda and it is a key part of how we operate and quote. we support those statements. the bureau practices however have not lived up to the standards and there is little to require that they do so. the dodd-frank at the expense of the bureau impressive authorities while requiring information. the oversight structure is much less impressive.

problematic for a data practices have undermined the effective use of data to serve as a check on arbitrary action and weakens the quality of policymaking placing at risk of bureau's mission to protect consumers. in my written statement i discuss several examples which i will merely list for you at this point. public disclosure laws such as the paperwork reduction act while cherry-picking data. in selected data samples the bureau's skews results and mischaracterizing consumer markets. the bureau has misrepresented its data-gathering on overdrafts unless web site the bureau publishes unverified complaint information. interpreters instead of the bureau ignores its own data. to promote its policy on indirect auto lending the bureau has manufactured data that does not exist. i'll explain briefly one of these as an example. in verified complaint

information. the bureau publishes on its webpage at the top of which are the words and official web site of the united states government. they publish consumer complaints that are unverified for accuracy or ferocity. by adding their voice consumers help improve the financial marketplace and quote. but how can this be true if the information provided is unreliable and misleading? what would disappear offer to protect the consumer from acting on erroneous information published on the bureau's own web site? aba offers for recommendations in our written statement. i would emphasize our report. the governance of the bureau should be changed from a sole directorship to governance by a bipartisan commission. with a bipartisan structure weekend light from a variety of different people posing

different questions from different backgrounds all more likely to poke and prod the data and all of them likely to be intolerant of information. on behalf of aba and its member banks and all business models serving hundreds of millions of people, our customers and your constituents impacted by bureau decisions by the consumer bureau i want to thank the subcommittee for this very important hearing could i would be happy to respond to any questions right now. >> thank you. dr. calabria you recognize. >> i thank you for the invitation to appear in today's word hearing. the concerns i will raise are not unique to the cfpb. they apply across the federal government. let me know that my colleagues and i indicate we have consistently raised these concerns regardless of politics or the mission of the agency that we have been vocal in abuses of law enforcement and national security.

we expend more resources trying to undo party doctrine so again this is not something new to us pretty bad we have spent more time on the patriot acts that we have on surveillance of the consumer protection bureau so against this is nothing new for us. let me also -- the massive data collection is one of choice. there's no explicit mandate or requirement for this level of data collection. if someone who is priebus matches one of the offices that have been transmitted cfpb i can say the extent of this data collection is unnecessary to fulfill its responsibilities. nearly doubled enforcement to increase enforcement action we did so without having to resort to a massive dragnet of consumer data. unfortunately -- the problems with respa and their consumer financial protection are the

underlines that choose which i greatly encourage congress to revisit. we have seen this play out in the air of national security where the public is repeatedly told that if only we had more data various attacks would have been avoided. repeatedly the intelligence failures we witness are not from a lack of data. there are from an inability to connect the dots. similarly the financial crisis was met with demands for more data. the overheated housing and mortgage markets are not obvious enough from aggregate data. they were obvious to me of a decade ago. of course we are regulators ignore them and of course more data does not necessarily help you but you continue to ignore. the cfpb -- has engaged in at least 12 large-scale data collection efforts through the least. these include information not directly identifies individual consumers. combining this information with other sources could allow information to be identified on

consumers. in my opinion granted as a monthly or i believe these collections do not comply with the right to financial privacy act and let me state as a formal federal employee subject to the opm bridge i don't trust any part of the government with my data. the cfpb or otherwise. consolidating this financial information one place the cfpb has left consumers extremely vulnerable to hackers and identity theft. those are the lead threats from outside the bureau. of course in the cfpb data collection poses significant threats to our fourth amendment protections which apply to everybody. bo a checking account may well record the citizens activities opinions believes as fully as the transcript records. credit cards are today's checks. such current concerns are not reflections of the watergate era. as recently as 2012 justice sotomayor correctly observed quote awareness of the

government may be watched associational and expressive freedoms. governments unrestrained power to assemble data that reveals private aspects is susceptible to abuse. justice sotomayor's words not mine. medications purchased on line by retailers such a purchase could theoretically identify data collections. for a variety of reasons is i think this hearing is demonstrated across have the cfpb has become a highly partisan issue. we are to use its records of its critics in it attempt to silence his critics who would not be the first agency to do so in this institute we receive our donations via credit card and this is a very robust and certainly one that we worry about. i will only quote justice thurgood marshall who observe quote the technique of examining bank robert records is unfortunately not a real one.

as someone who takes a stand at some pub in washington i shared the concern. my suggestion would be the cfpb and data collections but i would submit there is more than enough work to do responding to consumer complaints. i think the subcommittee for their time and look forward to your questions. >> mr. gupta you are now recognized for a summary. >> i will make three points this morning based on my perspective as a former cfpb official and an advocate for consumers including data privacy cases. first privacy and the security of consumer data are important issues and if they subcommittee were really concerned there are real problems we could be addressing. a major data of breaches in which credit card information was stolen from consumers at target and home depot for example. the subcommittee hasn't held a single hearing of those real-world threats. instead we are having a hearing of the imagined problems that exist only in the minds of the

cfpb political opponents. in fact if you asked the consumer privacy groups they voice support of cfpb data collection efforts in their state been entered into the record today or will be. as one privacy advocate. the reason you don't hear from privacy or consumer groups is that the cfpb is not doing anything that concerns us nor for that matter isn't doing much differently than other regulators have always done. second, to the extent that is doing anything different the collection of data is creating the kind of oversight and consumer protection that we are we are missing before the financial crisis. for example the compilation of anonymous account level data and i want to stress that anonymous account level data from the credit card database has allowed the bureau to study important topics such as credit card marketing practices and the widespread use of force arbitration clauses in consumer contracts something congress requires the cfpb to study. data collection is crucial to the bureau's ability to identify

systemic violations of consumer laws discrepancies and credit score reporting and harmful effects from checking account overdraft programs to name a few examples. the cfpb data collection insures the agency's regulation and enforcement are data-driven and based on the best understanding of the market trends in empirical reality. that's the whole point of having expert administrative agencies in the first place. unless your profits come from deceiving comes consumers you should welcome the cf db data collection. i'm finally the existence of this hearing illustrates one danger that can occur when public officials don't case actions and data. we have a made-up controversy based on made-up facts. the cfpb is not spying on american citizens. it is not the nsa or does not interest in the details of people's personal activities nor would with the data the agency is currently collecting enable it to investigate those abuses even if it weren't just didn't

say what you plan to buy tomorrow with your credit card for a christmas present for your grandmother. in fact the vast majority of the data collected by the cfpb is already public such as data on mortgages already recorded in land records or auto sales on record with the dmv. most of it is aggregate level data aggregate data be, will moderate the transactional level design to be -- get agency picture what financial institutions not what individual consumers up to. the gao looks into this controversy and a detailed review found that none of the major problems that the cfpb's opponents have alleged exist or that the 12 major projects analyzed by the gao only three potentially involve any personal consumer data and the gao found the cfpb had taken steps to protect and secure the data it collects and has a system for anonymizing any material involving identifying information. i want to correct one and accuracy that i have heard

several times already this morning. none of the ongoing data collections but the cfpb contains personally identifiable information. the fact is then verified by the gao. agencies have been collecting the same things for years and nobody has complained. the story of consumer complaint in december. the inspector. the inspector general did an exhaustive review and uncovered no major problems but the 250,000 complaints examined the igs audit found accuracy rate of 99-point 99% an error rate of 0.01%. i wish most of the work products that emanated from this building for example could meet that accuracy standard. meanwhile the financial industry is collecting far more personally identifiable data that could open up real questions about consumer privacy jpmorgan chase released a report that came from a dataset of 12 million consumer transactions soap we are really worried about the collection of this country's data we should be

more concerned about the private market developing this data. the real problems with consumer finance it's unfortunate subcommittee feels the need to hold a hearing today on this non-issue. thank you for inviting me to testify and i'm happy to answer any questions. >> thank you panel. the chair recognizes by german the panel the gentleman from pennsylvania mr. fitzpatrick for five minutes. >> thank you for calling the hearing. it's critically important given the security breaches we have been hearing about and reading about and the private sector of the economy. most importantly in the public sector and most of those cases the average american citizen does not know that their information is being collected by the federal government or security has been breached. they just don't know that. speaker gingrich he talked about the two constitutional provisions within a state congress essentially walked away from in passing dodd-frank and creating the cfpb and you

testified about the personally identifiable information of the cfpb is collecting. i have two questions. first week concerned about the cfpb's ability to protect and secure that information from breaches and the second question is when you have an agency of the federal government essentially lacks the accountability or oversight from congress what is the interest or the vigilance the agency would have to protect that information? how is the cfpb different from other agencies? >> thank you for the question. let me say first of all anybody who believes that anyone has the ability to guarantee security of information is totally out of touch with the real world. when you look at the size of the breaches in new book of the number of actors around the planet and you look at the intensity which people are trying to figure out how to do this there is no place we can aggregate information unless you take a totally off-line that you will see a real true security.

the systems are growing very rapidly. they're getting much more sophisticated and we are going to be in a very different world words just like the wild west. this is not like 10 years ago and it's going to get worse. second i will point out in "the wall street journal" article i cited a stanford study on how to save metadata from telephones and connect them with individual identity and an m.i.t. study of credit cards of people say we are only gathering in personal information, the fact is they don't understand how that data has evolved in the fact that you can reassess and redefine people if you have enough data points. i find it much more frightening to have government bureaucracies that are uncontrolled having that level of information and power. the private sector, it is and it works if you are a citizen into

bureaucrats show up at your front door. >> mr. deepak gupta -- had their personal information or her fernand shahab was stolen from a database in cfpb how would you explain to her that it was necessary for the federal government to collect and store this information the first place? >> i would first explain to her the premise of the question is false because i said none of the ongoing collection efforts by the cfpb involve any personally identifiable information. that is verified by the gao report and pursuant to the statutory authority to the authority that this congress gave the cfpb to do ongoing market monitoring expressly comes with a limitation that says that market monitoring, that data does not include personally identical fashion to identifiable information and the cfpb is complying with that mandate.

it's going to be because she provided as part of a consumer complaint and that information is not going to be information that would be damaging. with the information it requires and allows agency to get in touch with her or for example when their supervision and enforcement in agency needs of persons information to get in touch with them to return to reimburse them. those are small exceptions. >> do you concur by constituents should have no concern? >> i do not concur. my read of it is clear that at least three of those programs to have personally identify with permission and there's also a question of can you take the information in those programs and link them to other programs that aren't personally identifiable and i think there's a real risk there. again as i noted in my testimony i was a victim of the opm breach. opm has now made sure i get a least a year of credit check free and that's very touching that i would personally like the chinese to give the money information back and not to use

it. it's hard to close the barn door after the horses outside think we need to get ahead. the point to react is not after the breached. >> i think most of us who were affected by the same breach would agree with you. i yield back rays the chair now recognizes the ranking member ms. slaughter for five minutes. >> thank you very much and let me welcome our panel is here today and specially speaker gingrich. welcome, welcome, welcome. speaker gingrich, who are you representing here today? >> i represent myself. >> what is the name of the pr firm you work for? >> the u.s. consumer coalition is not a pr firm. his organization has been raising questions, work with them and i've said that publicly and in fact in the testimony we submitted here. i think the questions they raised are very good ones.

>> excuse me i'm not registered in that right now. the coalition has hired a pr firm that you work for. you work with a pr firm firm. is at right? >> i work with the coalition. >> do work for the pr firm hired by the coalition? >> i would have to check to see. >> okay. >> we work with the coalition. >> with the ranking member yield if you would? mr. speaker i have your "wall street journal" article and there's an indication that the end that you are a paid advisor to the public affairs group that are you denying this mr. speaker? >> that was the question ranking members asking and i yield back to the ranking member. >> thank you very much and the coalition is funded by what industries? >> i don't know.

>> the coalition represents any other consumer groups? to the advocate for any other consumer groups or just organize to do with their concerns and the consumer financial protection bureau? >> my impression is they think that the threat from the cfpb is large enough that is their primary focus. >> mr. speaker is that exactly what they do just the consumer financial protection bureau? >> you'll have to call them and ask them. u.s. made by someone thing. >> i know you're very smart mr. speaker and he would work with somebody that you didn't know, who they are and what they do so that's why ascii but let me just move on because i know you understand how this place works. he talked about the fact that it's the only agency that operates in the way that it does it's the only agency that does

not have to go before the appropriations committee. do you now understand that to be true? >> that is certainly my impression. if you find other agencies that have perpetual life by drawing money and manners that has nothing to do the congress i think congress ought to hold hearings in ring them up in the constitution. >> are you aware of where for example they fhfa has one director appointed by the president and can only be removed by the president and does not go before any appropriations committee? are you aware of that? >> i was not aware of it. as such is said to the degree you'd like to give us it was give us it was that we could suggest a congress that they bring under appropriations. >> sir i knows you know how this plays runs and you ran it with a hands i know you understand how works. does the fdic go before an appropriations committee? >> only one subject to

congressional supervision. >> that was not my question. in terms of what the president is able to do in determining whether or not a director continues as director, the occ for example, the director can only be fired by the present in the same thing with the fhfa. is that correct? >> that's correct. >> and the fed they don't go before appropriations committee. >> they have been auditing the fed for that very reason. santa present can only remove the head of fcc come is that right? >> yes. >> so i want us to be clear when we could compare the consumer financial protection bureau with other agencies some of us are very appreciative that dodd-frank created the consumer financial protection bureau because prior to the meltdown, the recession that we entered

into nobody was protecting the consumers. we have all of our oversight agencies who basically were supposed to be responsible for soundness etc. but they did nothing for consumers. so now we have the consumer financial protection bureau and we have the whole effort to destroy it to the other side of the aisle has made this a top priority and everything that they do. just as mr. gupta said wealthy at this breach with target and others never have we had a hearing on any of that. i'm glad that you are here today but i want you to share your knowledge with us and tell us what you know and what you understand rather than some of the other stuff i'm hearing and i yield back a balance of my time. >> maybe you can ask -- the chair recognizes a drummon from colorado mr. tipton for five minutes. >> thank you chairman duffy. mr. speaker.

>> i wanted to comment the gentlelady is pointed out all these perrysburg reseize were responsible responsible for oversight prior 2007 failed to the answers let's build another prophecy to look after the failed bureaucracies is supposedly being appointed these bureaucracies failed? i think it's a fascinating difference of opinion and i appreciate your pointing out that we should have a study which cato may have of all the agencies that should be under congressional annual appropriations prevent thought that was a useful contribution. >> thank you mr. speaker. mr. gupta i would like to start with you with regard to personal information. you made the comment that no personal information is collected. is gender and identifier? >> is gender and identifier? gender standing alone with nothing else. >> would have included h.? >> there would be i identifier of those two together? >> we included those elements are those things that can be used to identify an individual?

>> i take your point and you are right in a constellation of data can be used to identify someone without their name in the sea of tb is very concerned about that. that's why in the gao report you will see they have the data intake team that carefully describes the data before it enters the bureau and is disseminated to ensure you don't have a constellation of data that can be assembled to identify anybody. >> mr. gupta under the cfpb would be mmbtu -- mnbtu they require gender age and -- mr. calabria we like to comment on that? >> again i would agree they only a small information is. >> as i pointed out in my testimony the federal reserve inspector general pointed out a significant amount of data collection is maintained by contractors on cloud computing which might pinion granted not an expert but leads to hacking.

i would certainly encourage the cfpb to bring that data collection. >> this gao report that cfpb does not have security protocols in place to secure this data? >> that is correct and that is a very big concern of mine the security of this data. >> if i could follow-up with you for a long time. her bodies the heart may be in the right place but we need to look at outcomes predicate a general sense going back to speaker gingrich's point that we have an institution right now to the cfpb that is completely off the books and congress has no control to be able to control it too directed. do you have a sense that we have a system in place that's continuing to build design to be able to find and punish rather

than help and improve? >> there's a fair-mindedness psychology literature but when people feel they are wrapped up in a cause that self-righteous and certainly the cfpb attitude we are crusade, we are going to fix a financial crisis. he saw the same thing in the intelligence community after nine 9/11. when you get caught up in this mentality to get blinders and you get tunnel vision. a lot of research clearly demonstrates that. >> and i would reference one of the citations in my testimony by cass sunstein about people who argued that the need to have procedures and checks in place so dissent is heard. the value of report is that somebody sits there and says just like this committee can have this dialogue in this back-and-forth there needs to be this back-and-forth and wayne talked about at the end of the day every employee at cfpb needs to say yes sir to mr. cordray. none of us have all the answers

for this dialogue in this back-and-forth in this give-and-take. you need that. there are other places that don't have those that don't do well. it was mentioned in another -- a number of agencies. we saw how that turned out. again the attitude come you can't have this give-and-take is critically important and also we need single direction is captured by the industry. i'm not a mathematician but the last i checked a thing would be easier to capture one person than to capture five. >> one thing that concerns me about this if we were to play the same rules to the cfpb that they are trying to apply to everyone else if we were getting ready to -- and again going back to the comments in terms of identifiers about a gender and identity you are collecting data with no consumer knowledge. how is the cfpb address the private sector?

>> let me make two quick points. first of all the jpmorgan example i can choose not to use jpmorgan and i can sue them if they distribute my data in a personal way. target took a big hit. you don't see any of this with the federal government but lastly we don't have to wonder how this works. the example weather is not personally identifiable information that you can leak it to the courthouse identities. not that hard. >> the chair recognizes mr. cleaver for five minutes. >> thank you very much mr. chairman. i thank all of you for being here. appreciate it very much. mr. speaker you may have misspoken and say that the cfpb was totally secret so i'm assuming -- this is not a

catcher wrong question but when you made the comment i didn't think you were saying that the cfpb was the agency. >> my impression is if you look at various hearings and various interrogatories that the leader of the cfpb has remarkably little interest in sharing with congress and whole range of information including the cost overruns including salaries and so forth. my impression is that they are remarkably secretive organization for a non-national securitization. >> i agree with you that is markedly secretive as opposed to totally secretive because it was totally secretive when it was hearing. tonight i'm happy to be amended to remarkably. >> thank you.

mr. abernathy, do you think it's important that we have evidence-based policies? >> absolutely congressman. in our view when you have an agency that would buy just one individual without all of the other checks and balances and oversight get out their agencies are subject to you are left with just one check and that is the exposure to the public. ..

>> >> but they have the series the elected officials and they are peers of one another and check their activities that prevents the use of data because they will say madame chairwoman there is more information you need to take into account no one is like that the bureau of copier or director. and most of those around the country but on people with

mortgages. you and to think about of the of commercial data that is available. does it not have a lot of data about individuals? we back they do. but what makes it different is the queue but the pieces together looky under dodd/frank there is virtually nothing that they cannot and with those enormous amounts of those data.

>> it is erroneous to say 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 incompetent 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 entirely unchecked, 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.