They pulled off the kid gloves and the boxing gloves at the House Financial Services Committee, going full-on bare-knuckle and then even brass knuckles on the Consumer Financial Protection Bureau and its director, who was there to give his semi-annual report to Congress.
Any pretense from previous hearings seemed to have been cast aside as Republicans and Democrats fired direct broadsides – Republicans targeting the CFPB, and the Democrats targeting Republicans.
The hearing was more of a grilling than CFPB director Richard Cordray got last week before the Senate Banking Committee, which was uncharacteristically heated.
Majority Republican members accused the agency of the worst kinds of operational and financial mismanagement, collecting private personal data on U.S. citizens, for being on non-transparent and for a culture of discrimination at the CFPB. Also in the mix was the now $185 million renovation the CFPB is undertaking on an office building it does not own, a renovation that costs more than the actual building itself.
House Financial Services Committee Chairman Jeb Hensarling, R-Texas, launched the opening salvo.
“Properly designed, the CFPB is capable of great good on behalf of consumers. It is also capable of great harm,” Hensarling said. “In just three years, the CFPB has grown into an unaccountable federal leviathan of nearly 1,400 employees with over a half billion dollar budget and the unrestrained power to dictate which Americans can receive credit and which Americas cannot. Knowledgeable Americas are rightfully alarmed as the threat and the harm begins to mount.”
Hensarling said the CFPB as constituted hobbles businesses at a time when the economic is stalling out.
“Since Director Cordray last appeared before our committee in January, we have learned much. First, we have learned in the first quarter of this year we actually had negative economic growth of one percent,” Hensarling said. “And when you speak to practically any small businessperson, any community banker they will tell you the sheer weight, volume, complexity of the regulatory red tape burden is one of the primary reasons that they cannot expand and hire more people.”
U.S. Rep. Maxine Waters, D-Calif., the ranking Democrat on the committee, immediately jumped to the CFPB’s defense.
Waters said that House Republicans want to bog the CFPB down with burdensome regulations, paperwork and accountability requirements – ironically, this is what Republicans say the CFPB imposes on private businesses.
“Republicans have been hard at work – drafting and passing burdensome legislation that would gut your agency and its ability to stand up for our nation’s consumers. In the past six months, Republicans have advanced a number of these harmful measures through this committee – and this House – that would undermine the CFPB’s ability to protect consumers from deceptive marketing, unlawful debt collection, lending discrimination, illegal fees and other prohibited activity,” Waters said.
“I’m disappointed that a package to destabilize CFPB’s leadership, end its autonomy, and tie its funding to the whims of the Congressional appropriations process made its way through the House of Representatives,” she said. “If enacted into law, we would be one step closer to Republicans’ goal of ending the CFPB’s ability to protect all consumers – including students, seniors, families and service members. It saddens me that my colleagues on the other side of the aisle have aligned themselves with Wall Street, predatory lenders and other bad actors in our financial system at the expense of protecting consumers.”
Republicans were particularly concerned about the CFPB’s collection of data for its National Mortgage Database on consumers including names, Social Security numbers, IP addresses, GPS coordinates, phone numbers, addresses, religious faith and political affiliation, education and employment records, and other personal data.
“…The joint database project by the CFPB and the FHFA will undeniably collect personally identifiable information on millions of Americans in the National Mortgage Database. I’m not speaking merely of names, addresses and phone numbers – though the database will certainly include those – but shockingly also people’s Social Security numbers, their race, religion, personal financial information, and even the GPS coordinates of their homes,” Hensarling said. “A breach of this database could cause untold harm to consumers by the very agency that purports to protect them.”
Hensarling didn’t hold back in condemning the National Mortgage Database.
“Without a doubt, this National Mortgage Database is an unwarranted and shocking intrusion into the privacy of American citizens. It is a database I would fully expect to see in either Russia or China, but I’m appalled to see it in the United States of America,” he said.
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