Newt Gingrich Brings Fireworks and Intrigue to CFPB Hearing

Few issues are politically contentious enough to lure Newt Gingrich to testify before a House subcommittee the week before Christmas. His presence on Capitol Hill Wednesday underscores the partisan brawl that characterizes much of the oversight of the Consumer Financial Protection Bureau.

The House Financial Services Committee has had a banner year in terms of bipartisan accomplishments. Twenty-two of its bills were signed into law, more than any other committee. But the panel ended the calendar year with a barbed subcommittee hearing on data collection at the CFPB.

Republicans and their invited witnesses, including former House Speaker Gingrich, blasted the CFPB for its “dictatorial” practices and “crusade”-like mentality. Democrats spent most of their time trying to undermine the former speaker’s credibility.

Lawmakers did manage to discuss the hearing’s topic, mass data collection, but the sharp exchanges underscore the degree to which the very existence of the CFPB has become politicized.

“It is dictatorial. It is unaccountable. It is practically unrestrained in expanding on its already expansive mandate from Congress,” Gingrich said. “This is your government as a bully, and it is your government as a blackmailer.”

Republicans on the committee, as well as their witnesses, asked about the CFPB’s methods of collecting credit card and other financial data from consumers. The agency uses the information to make sure that consumers aren’t being overcharged. The CFPB maintains that its data has been scrubbed of personally-identifying information But the witnesses and Republicans said that individual identities could still be ascertained by using only a few data points from a credit card bill.

They drew a distinction between the data collected by government agencies like the CFPB and similar data activities of private companies. Consumers can choose to opt out of their relationship with private companies, the Republicans argue. They cannot do the same with the federal government.

As a private citizen or the CEO of a company, Gingrich explained, “The big difference is that I can’t go to somebody and threaten to cut off their bank accounts. I can’t threaten to throw them in jail.” The government can.

The CFPB was not represented on the panel of witnesses. A former CFPB official who is now in private practice, Deepak Gupta, was invited by the Democrats. He pushed back on Republican claims that the bureau has overstepped in its data collection efforts.

“We’re having a hearing about a set of imagined problems that exist only in the minds of the CFPB’s political opponents,” Gupta said in written testimony. “In fact, if you ask the actual privacy groups, they voice support for the CFPB’s ‘acquisition and analysis of commercial databases to help it ensure the public is fairly treated by the financial marketplace.’”

Democrats focused most of their time pressing Gingrich about his reasons for testifying. “Mr. Former Speaker, could you please tell me what your expertise is in this area?”

That was how Rep. Joyce Beatty (D-Ohio) began her questioning.

From the start of the hearing, Oversight and Investigations Subcommittee Ranking Member Al Green (D-Texas) zeroed in on Gingrich’s affiliation with a group called the U.S. Consumer Coalition. The group actively advocates against the CFPB.

“There is no acknowledgement of your involvement with the U.S. Consumer Coalition,” Green said. “It appears to be a corporate-owned and subsidized synthetic grassroots organization. It’s important to know who is funding action against he CFPB.”

The U.S. Consumer Coalition is governed under 501(c)(4) of the tax code, meaning it does not have to disclose the sources of its funding. However, it shares staff with the Wise Public Affairs Group, a Virginia public relations firm with ties to the Republican Party. Gingrich is paid by the Wise Public Affairs Group.

Committee memos about the hearing did not mention Gingrich’s affiliation with the USCC. His written testimony did make a brief mention of his association with the USCC, which he advises.

Gingrich repeatedly responded “I don’t know” to Financial Services Committee Ranking Member Maxine Waters’ (D-Calif.) questions about what exactly the U.S. Consumer Coalition does other than oppose the existence of the CFPB.

“I represent myself. The U.S. Consumer Coalition is not a PR firm. It’s a group that is raising questions,” Gingrich said. “My impression is that they think that the CFPB is enough of a problem to focus on.”

In an interview with Morning Consult after the hearing, Gingrich brushed off questions about the USCC’s other activities. “I know that they’re concerned about what the CFPB is doing. I’m concerned about it. It seems to me that’s all you need to know at this point,” he said.

For all the sniping back and forth, both sides seemed to be in agreement about each other’s intentions: Democrats seek to preserve the CFPB in its current form, and Republicans want to limit its powers or eliminate the agency altogether.

“It’s imperative that we move toward abolishing the Consumer Financial Protection Bureau, and at the very least subject it to the annual budgeting and appropriations process, in addition to restructuring its leadership, to make sure it is accountable to Congress,” Gingrich said.

“My Republican colleagues are here again today to criticize and undermine an agency that has returned more than $11 billion to 25 million Americans,” said Waters.

Briefings

Finance Brief: SEC Says Corporate Filing System Was Hacked in 2016

The Securities and Exchange Commission said its system for storing documents filed by publicly traded companies was hacked sometime last year. In an eight-page statement on cybersecurity, SEC Chairman Jay Clayton said no personal information was stolen in the cyberattack, which was detected last year, but the SEC learned last month that the data “may have provided the basis for illicit gain through trading.”

Finance Brief: Week in Review & What’s Ahead

The fallout from the massive data breach at Equifax Inc. has the potential to derail congressional GOP efforts to pass legislation that would limit civil penalties for credit reporting companies sued by consumers. Lawmakers such as Sen. Elizabeth Warren (D-Mass.) are now investigating the Equifax breach, as is the Federal Trade Commission.

Finance Brief: Warren Begins Equifax Investigation

Sen. Elizabeth Warren (D-Mass.) said her office is now investigating the massive data breach at Equifax Inc. and is pushing for legislation that would allow consumers to freeze access to their credit files without paying a fee. Warren also asked TransUnion Inc. and Experian Inc., two of Equifax’s top competitors, to weigh in alongside federal regulators on whether Congress should pass legislation to strengthen consumer protections.

Load More