Transcripts For CSPAN2 Key Capitol Hill Hearings 20240622

Subpar and illegal practices and providing almost 200 million in redressed 1. 6 million consumers. We have now handled, as we have mentioned, 650,000 complaints, a matter that is particularly important to us. This includes all manners of Financial Products and services. This includes each of the states. One excerpt from a Service Member in alabama reads that we open an account we became unable to pay the full amount and we made it an agreement to pay a lesser amount and campaign by allotment. And i was not served with the judgment prior to court or after, i was informed of it when my wages began to be garnished and we have asked to have this issue fixed. We have paid this company for a computer hutch, table and chairs, and the furniture has not lasted, however the payments continue. We need assistance as we have tried every other step possible. And another excerpt in my home state of ohio and ranking members home state reads that i elected to a reduced rate payment plan with a Student Loan Service or in addition to being charged incorrect Interest Rates my Monthly Payment was incorrectly allocated, which is resulting in late fees and the delinquency notice. And these are the stories that motivate us in our work. Our most recent semiannual report, we described describe the efforts to achieve our vital efforts on behalf of individuals during the timeframe covered, we have helped to secure Enforcement Actions for millions and dollars in relief for Consumer Protection laws along with over 32 million in civil money penalties. We have taken action against the company for legal Debt Collection practices that resulted in 2. 5 million in relief or Service Member. We also stop an illegal kick a scheme for Marketing Services the result of 11. 1 million for wronged consumers. We work with the department of education to obtain 480 million in debt relief for student loan borrowers who were wronged by a forprofit chain of colleges that have violated the law and have since declared bankruptcy. The bureau also issued the numbers proposed and final rules. We issued a final rule to reduce burdens by promoting more effective privacy disclosures. The bureau issued this and they have no such protections. The bureau issued a proposal to clarify various provisions for the Mortgage Servicing and in january of 2015th we propose this to facilitate mortgage lending particularly those in underserved areas and Credit Unions. This would increase the number of Financial Institutions able to offer these mortgages in underserved areas and help small creditors adjust the Business Practices to comply with the new rules. As a data driven institution the Consumer Bureau published several reports during this reporting time that highlight important topics and Consumer Finance such as medical debt, arbitration reverse mortgages consumer perspectives on Credit Scores and Credit Reports area and we also released a new know before you mortgage tool to help people to better understand how to go about the important task of buying a home. In the years to come we look forward to fulfilling Congress Vision of an agency that is dedicated to cultivating a Consumer Financial marketplace based on transparency and responsible practices sound innovation and excellent Customer Service. I look forward to your questions. You have said, director richard cordray, that you are accountable to congress. Many members of congress have experienced strong disapproval of the costly Building Renovations which include a waterfall and a fourstory glass staircase that stands out more than 3. 5 times the original estimate. As of this caused you to change your renovation in any way and tell us what changes you made, if any. The overall accountability and oversight, we are accountable or this congress in numerous ways that are better than our stature, the gao does a regular audit of the extensions and expenditures each year which is not common for federal agencies. We are subject to an independent audit also by our statutes and subject to reduced. [inaudible] i am qualified and this is where the congress put the jurisdiction in your vigorous oversight twice a year in the House Financial Services Committee Twice a year and we have numerous other accountability mechanisms as well. Like the other banking agencies we are not subject to the appropriation process, but that is not unique. It would be odd as if we were different from the others in that respect. As for the building project that has been overhyped and misrepresented. The costs have remained essentially static from before we took on this building and they had performed an audit and the Construction Costs have been pretty steady between 95 and 125 million approximately. And they know more about it than i do and they have felt and have stated that this is an appropriate government renovation project well within the cost estimate. That is my understanding of that issue. Thank you. Yesterday the bureau announced the settlement of an enforcement action against american honda finance corporation. We are the nations largest auto industry. [inaudible] and they resent american thinker article quoted from a memo stating that the bureau is seeking to accomplish these significant limitations of dealer discretions. Considering auto dealers are explicitly part of this. Can this be seen as anything other than a backdoor effort to regulate auto dealers that were basically exempt from doddfrank three things. The Justice Department. We did resolve a matter of and its the hottest credit. And the discretionary markup, which we think has led to discrimination for consumers and the Justice Department says it has led to this for consumers as well. But it was industry leadership that honda has demonstrated yesterday and i commend them for that. Second in terms of our responsibility we have been very careful to observe a line that was not necessarily a logical mind the congress through, which was to say they have jurisdiction over on auto lenders and dealers and ides i understand that was given to the federal trade commission and we feel that that means that the law has spoken clearly and that we have a responsibility to address any sort of issues of discrimination violations of law but not by dealers. And this could be illogical but that is the line we have and we have taken our responsibilities seriously and we have a partner which is the department of justice and we Work Together to address these issues. I think thats been appropriate. But im always willing to hear more from members of the committee and members of congress and we are looking to enforce the law and do it accurately and appropriately. The bureau released an outline of the proposed plans to end payday debt tracks. Every state, to my understanding, is something that regulates or outright prohibits this. This includes state laws and regulations and if you have it could you provide that analysis to the committee. In our statute there were four issues that were very explicitly given full jurisdiction to the Consumer Bureau Mortgage Servicing payday lending, and private student london, those were explicitly called out in the statute, we have been working on the issue of small in it for years since we have become an agency and we have published too expensive papers that detail the analysis would involve scrutiny upwards of 15 million loans, it is the most conference of work that has ever been done on this industry. What we concluded from that was that the problem of debt tracks and rollovers of loans was a significant problem for consumers who are in the small dollar loan market. There is a representation that this is a product of people repay it and they get in and they get out and they dont end up in a trap or at what they found out is that well over half of the loans are repeat loans in sequences of six and eight in 10, 12 loans where people are living their lives and that is the issue that we are looking and working to address. Its a complex issue and we want to preserve access to credit for people who need that credit and we recognize that there is a demand for the credit at the same time. Then we do not want consumers to end up harmed by being stuck in a trap that they cannot get out and harm financials further. That is what we are trying to confront there. Nicu, mr. Chairman. I would like to comment on this the House Appropriations committee passed a bill that kills the independence of the cfpb. Including the idea that the cfpb governance should be changed to this commission. The argument that they would be better led by commissions is clearly designed to cripple and set up one nomination fight after another. We are i believe, the only committee in the senate that has yet to hold a hearing on any of our nominees who were sent to the committee in january, by contrasting 2007 when we join this committee and we were in the 70 or of the Bush Administration and democrats were in the majority, this committee had three nomination hearings and reported a dozen or so nominees before the august recess. We have important jobs open and with that to a treasury for terrorism and financial crimes, changing the governance would stop the agency in its tracks and would again leave consumers without a federal watchdog. And i would again point out what the criticism that we hear so frequently on budgets and buildings and all of that that they have returned over 10 billion to 70 million americans. I would encourage the director to see this release of the audi as we would have required an wall street reform and i am concerned but not surprised that the bureau found no evidence that forced arbitration leads to lower prices for consumers and that three out of four consumers did not even know that they were subject to an arbitration clause. And a number of them sent a letter to the bureau urging swift rulemaking to ban forced arbitration in consumer contracts. What is the bureaus thinking on this issue and when can we expect to see this action reign. Thank you, ranking member. All i can say is that i was very pleased to have the opportunity to be confirmed by the senate in july 2013, it took a while in which the Senate Considered this nomination. We did issue an arbitration report the congress required us to do that. As part of the doddfrank act. What they said was that they were going to outright ban any kind of arbitration clauses and any mortgage contracts. This was a significant shift from the permissive attitude for the federal arbitration act that had developed over a decade. They also said and this is what we are getting to hear that with the rest of consumer Financial Products and services, they were wired to bureau and mandated that the bureau perform a study in a report to congress on the potential effects of arbitration agreements of that time. And we did that very carefully and deliberately, it took us a couple years of work with lots of research and ultimately a significant report that looked in the area that had not been looked into before comparing arbitration in the context with judicial resolutions. We issued a report to Congress Earlier this year. What the statute says is having performed that task it was then for the bureau to consider what could be done consistent with the Public Interest and the results of that study to modify or address the predisputed arbitration agreements for other Consumer Product and services. We have determined having digested the study that we will be moving ahead with rulemaking in this area and we will be in due course convening a Small Business review panel as the first step in considering what actions to take. And so that is where it stands. We have heard from banks about issues related to coordinations of exams. I know the Inspector General reported that they have not found duplication of regulators oversight responsibilities. What is the value of the Supervision Authority and particularly, obviously exams can be costly and we want to make sure that there is not duplication. This is an area of focus and one that we have made a amount of focus. We will only minimally be staffed up we were about a third of what we needed in terms of manpower. The coordination was not as good as we would have liked it to be. And i would say that we coordinate and this includes numerous includes numerous exams and we share information consistently appeared with the other agencies which is also quite important because they have safety and soundness, which is significant over these institutions law mandates that we collaborate and that we share examination reports which we do back and forth. And it mandates that as we go about proposing rules that they have a lot of insight and input into those rules, which they have had. And i think that that has improved enormously. And i think this includes collaborating with the cfpb and we have distinct and special rules so that institutions dont have to face what i would regard as a very unfair situation where they are hearing Different Things from different regulators and they would not know how to proceed. I dont think that we are hearing that. I tell institutions, let us know about the complaints in this regards we can fix them and i think theres been tremendous progress over the last three years. Thank you mr. Chairman. Director, as you know, recently in congress we have been debating the question as to whether the nsa should be allowed to access telephone records of americans. I have been very concerned about the massive Data Collection that the cfpb has been engaged in. And they are being held to these following. And this includes five and a half million private student loan spirit actually think the numbers are higher than that. But is that in the ballpark of the Data Collection that the agent is engaging with in . Yes, they did a very careful evaluation over the better part of the year and we have worked closely with them and i have nothing to dispute in that report. This inhibits them from collecting personally identifiable information. They claim that its not do collecting certain things like name and Social Security number and address of the person whose credit care data they are collecting. Can you tell me what data points they are not collecting on those credit Card Transactions . You mention the fact that we have developed a credit card database and were working on a National Mortgage database Consumer Credit panel. All of those areas, this information is really significant because its often misunderstood. This is the anonymize information Social Security number and account number is not included in any of that material and that includes you or i being concerned about privacy. But it gives us a sense of patterns and its like the gdp and Unemployment Rate and its not like what we do in this way. Its also relatively easy to do the anonymize it. That includes that they found just the dates and locations are enough to identify about 90 of people in the credit card data set. This is only a problem to us doing our work, it creates all kinds of issues in this includes making extra work for ourselves on these issues. Is to get clear. Industry has told us that its more efficient and less costly for them to simply do a data dump than to have to organize a representative situation. This is consistent with the others at the same issues sumac because of time i want to continue this. And i do believe that the protection for americans is not adequate. Doublespeak you further and her staff wherever you would like. The last question is the paperwork reduction act was designed to ensure the greatest possible Public Benefit from and maximizing the utility including maintaining and use and disseminated by the federal government and to improve the quality and use of federal information and decisionmaking and so forth. And its my understanding that each of the orders issued today which is the orders to collect this data has been sent to fewer than Nine Companies to avoid the review request by the office of management and budget. Can you tell me how many times have they utilize the exception for data request by sending these requests to fewer than 10 companies . We have utilized it several times and we have also gone through that full process several times. It is one that we have characterize what we have done is we are seeking data is we can limit the number of institutions so that we dont have to burden other institutions, i assume thats what you would like us to do. And so rather than eking the data from hundreds of institutions its easier for us than institutions. Can you clarify this more sumac maybe you can do this on a written response. Rather than several times this way or that way. I would like to know that out of all of the data request, how many have avoided this review. Fair enough, we are going to get you that. Thank you mr. Chairman. Until today it is fitting that you should be here. This is one of the prouder achievements which includes being on the organization. So thank you for all you are doing to help the servicemen and women. The basic Legal Protection for these Young Americans goes back to the civil war. The enforcement is scattered about as a civil act with deregulation and the enforcement is lax. I have pointed out as we said last week when he did a report that indicated that Service Members continue to obtain this protection of 6 on loans but this going back a long time ago particularly Student Loans was the focus. And i have put legislation into this as well at the cfpb justice background. So if Congress Went on to enact this legislation, how would this be too better protect individuals from financial harm . I think it stands to reason and theres more to protect our troops in terms of potential abuses or problems in Financial Products and services, which for them are just a distraction from their ability to focus on their job, which is defending and protecting all of us that that would be a helpful thing. I note that congress a couple of years ago, i think it was under your urging, they did provide the Enforcement Authority to the military lending act and i thought that was a positive step forward. What we do is work with the department of justice who has been active in this area and again they only have so many resources if there is ever an area where we should be training and focusing resources on the problem that is making sure that Service Members are treated appropriately. And are in the financial marketplace so they dont have to worry about those problems. Sumac that was passed for the fiscal year 2007. And it gives you the chance to create the framework of the rules and regulations. And that includes intentions that did not address the problems of the servicemen and women are part of herriot can you briefly explain this in rules that we hope can be forthcoming . We have a constant and sharp focus on these issues and we have seen to it that progress moves along in this area. We are very close to having a new set of military lending act rules and i commend the department of defense and there was originally a set of rules, but it was too narrow and too easily circumvented and thats very much the problem that the senator pointed out of people being able to swim around otherwise some of the well intentioned rules in this includes those at triple digit percentages and some of them at 600 and they are appallingly perfectly legal under the current rules which is why the congress, as i understand it has directed that this be done. And this includes great speed to addressing it a very shortly we are going to have a new set of rules and Service Members are going to have new and protections that they probably shouldve had several years ago. We say that repeatedly, but if their rights can be adequately protected the rhetoric is nice but its better to have access to the rules and protections. I am preparing. I think its quite important. Thank you mr. Chairman. Thank you mr. Richard cordray. Like a lot of members in this and i am really concerned about the vast amounts of data that is collected on all citizens. And this includes being related to financial transactions. I have not been able to allow any citizen to see what personal data at the cfpb has collected on them once a year. Would you support that concept. In general, our approach to this issue is that we are not having instant data where we can at all avoid it because it only causes problems for us as an agency in our work. And the data we are collecting and you all ask us from time to time whether laws have gone too far and that is different from the morning data on what the senator does and we have some personally identifiable data in two respects where they give us the status of a can work on the complaint the same way that constituents go to your office as well. We have no reason to do that. You dont need to collect any of that remapped. No, for example the credit our data, we do not have names and address and Social Security number or an account number. We are interested in the pattern of what goes on. Who gets it into scrubs is . It depends on the database that we are talking about and so private companies have also cared very much for what you and i do as a personal transaction and they are always marketing to the. Okay, what about these databases and that includes 100,000 500000 accounts that contain deposit account and transaction level data. We have had this to work on particular reports. We are not interested in transaction level data. What i referenced does include transactions and transaction level data. There a number of different collections, if you would like us to have people come to your office and speak very specifically about anything that you want to know more about, we are happy to do it. And i dont think youll find it problematic that one should be able to work it through. But the problem in your mind, its a problem in our mind. Give us a chance to preview and we can break this. There are all sorts of data usage that involve that information at least before it gets to you. In any case however large or small this universe is, would you support citizens being able to see what data is being collected because of regulations . Typically the data that we are collecting we would not be able to tell you which citizen is what. You and i dont want us to know that. It would only apply to what i am describing and would you support citizens having access to that to understand what is being collected. If it isnt enforcement or supervisory action to get relief to people, we need to know who should get the relief and work with the institutions took almost that. In terms of general datagathering i dont want to know who an individual is and we typically do not know it and we could not tell an individual anything about their data because we dont even know whose data is and that is the way that i want it. Thank you mr. Chairman. Gentleman . Thank you, mr. Chairman. There has been a lot of discussion about whether there could be room for it improvement and what challenges still remain. Stand up the agency from scratch. I want to commend you for being a force for good. There are twotheyre are two areas i would like to get into. One is about mortgage servicers. And some of the credit card reforms that i fought for in the 2,009 credit card act. I am pleased that the bureau has made these a priority while our economy and Housing Market continued to come recover from crisis theyre are still parts of the country struggling including my home state of new jersey which is the highestranking the country of home currently in foreclosure. Despite the cfp be knew rules many homeowners behind on there mortgages continue to face obstacles to obtain modifications that could help. Until Mortgage Services mark applications as complete homeowners are not eligible for dual tracking protections which prohibit a servicer for moving forward with a foreclosure while the homeowners pursuing loss mitigation. While homeowners scramble to put together a document after document they came late additional fees and burden that make them even more likely to fall. Some servicers request documents on a piecemeal basis and repeatedly request the same documents making prompt and effective loss mitigation a pipe dream for distressed homeowners. Do you have concerns that servicers are obstructing the loss mitigation process to favor foreclosure . If so, what can be done to . We do and i do have concerns. For me they they go back to when i was a state and county treasurer and saw the difficulties that Mortgage Servicing problems were creating for individual homeowners who really did not deserve to have that heaped on top of the financial distress. When we created our knew Mortgage Servicing rules which went into effect in january of 2014 we look closely at those issues which we no our pain points for consumers. We worked to address them. We have had further work were doing and Enforcement Actions, several Enforcement Actions where this is been part of the problems and part of the answer and orders that we had to impose and also supervisory work were doing with institutions that we highlighted in our supervisory highlights so that all of industry can no that this was a focus a problem that has been persisting for years and is one that they need to clean up. Itup. It is a complex problem and as you noted different states have different situations with underwater homeowners or foreclosure processes that differ dramatically. But this has been a pretty constant. I like to follow up. Saving American Consumers. 2013. Also identified market practices that are concerned. Before the card act, before the financial crisis i would say there are three reasons. Correcting problems and late fees, universal the spot default, other issues. Credit Card Companies themselves have been a great job. And handling credit card calls for customers has been an enormous shift putting financial incentives behind the way people handle those calls so that they are more consistent with what the customer is looking for rather than just trying to get them off the phone. I want to give the companys credit. I asked them to think about using that promotions renders principles. That we will be a good thing. If if they no how they should. Consumers themselves coming out of the financial crisis more responsible but thinking about how to troopers the Credit Card Debt when your consumer having a better experiencea better experience this knew going to have a better experience with your company that has been one of the success stories. Deferred interest is an issue of some concern. How the rewards programs are advertised, we want to be careful. Appoint a particular focus. Much of that has been cleaned up its and also when they understand the importance of doing it themselves have the ability to clean up their act. As im sure you are aware South Carolina has become an automotive giant sectors we certainly have seen a lot of jobs created by these. Particularly concerned by the 2013 bulletin. A onesizefitsall cookiecutter regulation on lenders and dealers. No jurisdiction. But your bureau regulating heavily the relationship between lenders and dealers. My concern, not as concerned about the dealers on lenders the governments involvement in trying to make things better. Compete for customers business. How do we explain . The involvement. Shopping for vehicles to pay higher Interest Rates how does that provide greater Consumer Protection. A couple things. Understand my background gm, ford chrysler, honda very significant presences. All of the issues, chrysler and general motors. Burdensome for everyone involved but ultimately came to a good result being that we understand the importance of employment in that area pensions and healthcare for people who work in that field and its importance to our economy. The director of the Consumer Financial protection bureau. The last thing i want is to hamstring important things. If i do that it would be to the detriment of my agency the last four years the way of ever have before in the history of this country. That is the same time the Consumer Bureau was gathering its wings. In your area has in mind, mind, if you dont have the ability to go around through a car truck you really in a lot of trouble we also believe theyre should not be subject to higher prices or more onerous terms the board you describe the stage was a pretty straightforward restatement subject to the equal credit opportunity act you need to think carefully. Thank you. I hate to interrupt you. Theyre is legislation being promulgated working its way through the house with a number of members a large number. The lending market is inconsistent with the outcome sincerely desirable to achieve. Before we start of the panel as it relates to the rest. Figures. Her sometime. The Mortgage Business more time than october less liability exposure. Thank you. Members of congress on both sides of capitol hill about what we call no for your mortgage will which is Something Congress required us to do just as a reminder. Its in the law, and its a good thing. The consumer had. Two different forms of the application stage and then two different forms the closing stage. Very consuming. Impenetrable. Everyone recognizes thats a good thing. Pain in any kind of transition. That requirement was a law five years ago. Worked on this carefully we had a 21 month implementation data long implementation. Nonetheless as we get to the end of it. Mothers in the spring. Example of the oversight. Raising on behalf of your constituents people trying to serve as well. It was due to an error on our part. We did back up the implementation date which was important to a number of people. Its now under consideration to put that in october. A lot of people dont like something mylike january. They do a firstround of mortgage rules and river under requirement time frames it was january. So many systems changes were systems freezes that is actually inconvenient for people. The other thing is specific response to your question was that we were now to work with the other agencies to get an agreement which we have. The early examination of this we will be diagnostic and correct. We dont think people are out theyre trying to exploit consumers. They are just trying to get it right. For the 1st time which may last many months to the other agencies and ourselves we will. Out what they are and how they should be corrected but not be looking to be. If. We said that explicitly. That is howthat is how it we will be. What we said about the mortgage rules two years ago is how it has been no one has said otherwise of complaint command we have taken that to heart. Happy to talk further but we have been trying to give a fair amount of leeway while the same time moving forward with the change is good for consumers. Thank you. Senator tester. Thank you, mr. Chairman. Thank you for having this hearing and being here today i appreciate what you are doing command i also want to say as senator scott did call we appreciate the egg density you gave. You did respond to a letter that i had many on this committee assigned. I want to talk a little bit about native americans little different ballgame because of the issues of sovereignty and the issues of consultation. You no since we talked about it before, very unhappy with the consultation process. Process. To be fair i have also heard from Oklahoma Bank that you are doing good things. The question comes up is the consultation process is theyre a policy on what you do and how you do it that applies to every tribe across the country . If true, can you give me an idea what it is . We in fact, in response to back and forth that you and i have had and others from that area of the country in particular, but other parts of the country we did put together a policy on consultation and formalize that and shared it and get input on it from the leading travel council since then had a request, can we put together an mru that would be more specific about the aspects of how this works. We workedwe worked at this and did develop it and have shouted back to the tribes as a whole. I dont want to have to get in the having individual consultations is my understanding is theyre more than500 across the country, but we are trying to deal with them as a group they are concerned about the small dollar lending, the potential regulations. We havewe have had two distinct consultations with them on that subject at there request and had a considerable amount of input of course, we are open. We try to be very accessible to people to come and see us and tell us what they are concerned about. Iabout. I always feel like that improves our work. I think we have been trying to be very full some in our approach to this. I know you have emphasize that to me again and again. Im happy to here further from you. Trying to help will we can. Appreciate that. Earlier this year the Bureau Proposed several changes to facilitate mortgage lending. Well i think theyre are things we can keep working on, we are appreciative of what the bureau did. One ofone of which was expanding the definition out into the proposed changes. Almost the entire state of montana which is correct. My question is, are you still hearing from folks who think there in a whirl areas that the cfp be has not defined very well . I stilli still recall a meeting in your office which you pressed upon me i understood something. You said, i dont think you really no what wereworld means of montana and give me a little schooling on that which led in part to our thinking about how to expand this definition. Definition. If you go back, the Federal Reserve 1st proposed definition before we came into being as an agency, and agency and there definition would uncovered 2. 2 percent of the American Population which was plausible if not somewhat narrow. We looked at in the decided it was too narrow. We came out with a different definition is more like 9. 9 percent of the population. About quintupled it. And after that people showed me maps of ohio county by county. Senator brown and i could do this in our sleep. A bunch of counties were clearly rural in my mind that were not covered under the definition. We felt the need to go back and do it again. One of the things i appreciate how we want to get it right. If we did not get it right we wont pretend like we did and say we cant change it. We now have a definition that is much more broad. Almost the entire state, 22 of the American Population whether is too broad or not not, i dont know, but it feels appropriate. Weve had disagreements but were working to finalize rules which we should do by the end of summer. I think for the most part they have been fairly wellreceived. Although oncealthough once we here from people and they see how they work with think more about it. One last. That you dont have to answer. I was concerned before this hearing but the information. Because of the data breach the concern was that maybe this database had been breach of. I would say i was encouraged that you are not collecting Social Security numbers, names, addresses, count numbers. We have numbers. We have to be careful as policymakers if we were to pass a bill that allows you to release any personal personally had in the book personally identifiable data that you have to go back and put names and addresses to the data which would take a tona ton of time and make me concerned about whats going on. I wouldi would not like to have to do that. Thank you very much. Sen. Senator kirk. Director, i want to raise the issue with several people on the cost of your building. I understand from your Inspector General, the total cost of this building which is to be used by the office of supervision 216 billion all in. This is a lease facility which you have got it and there putting in a twostory waterfall and glass staircases. If you look at the number of employees, 1459 which would lead to a per employee cost of 148,000 46,000 per employee. I would say says this building was way off game, how comegame how come you need to what is 16 million in upgrades . Several things. Things. Number one is followup, how the twostory waterfall helps you do your job. And that one in particular i would sayi would say i dont begin to see how it helps us to our job and we probably wont end up with a waterfall and this building. I think that has been very overstated. But in any event the office of thrift supervision which have this building before it went defunct had already recognized and on and on it and recognized that the building was in deep need a fundamental repair. Let me interrupt and followon. You certainly would be able to pick up the issue of the ball collection you are doing. Reserve Intelligence Community for over 20 years. Takentaken the specific action, again, taken specific action to take members of congress out of Data Collection and members of the Supreme Court out of your Data Collection . Do you see the issue on separation of powers . You have now kind of pileup to questionspile up to questions that i have not yet had a chance to answer. The office of supervision recognize that systems were reaching the end of there useful life. The secondary question. Have you made sure you have not collected the credit card data of Supreme Court justices . Ill take that we have not collected credit card data on any number of congress or Supreme Court justice. No purpose for me to do so. I do noti do not consider that issue more important than the privacy of individual consumers. [inaudible conversations] make sure you have not collect the supremecollected Supreme Court justice information. Why on earth what i . The separation of power. Why would i be collecting Supreme Court Justice David . A bit like the nsa scandal. You have vacuumedyou have vacuumed up too much in the gives you too much power. I cant even follow the question. Ofquestion. A firstyear law student would pick this up. Separation of powers argument. Give you the ability to abuse this power and intimidate the court. Intimidate the court . I dont follow. Were not doing anything nor what i want to, nor would it make any sense to do that. Sen. Tester picked up on the issue. If your collecting this data the only purpose of collecting data is to be able to access it. As you sen. , not so. For private sector the purpose of collecting information access. It is to monitor market. Chinese Intelligence Service have it before you do . Now that we have seen on the order of ten or 200 Million People compromised come of the problem is we dont even trust you to keep a secure. I can see that you dont trust me. I think you are sitting out hypotheticals that have nothing to do with what were doing. Im happy to have my staff a few more. You want me to go back to the building or which is never can answer that question . Why is 148,000 per employee absolutely necessary your mission . Okay. Those numbers are off. Actually, the numbers of your Inspector General. The talking about things like other rent, other services. The Construction Cost has remained fairly consistently constant. We have let those contracts of air coming in under budget. They are fairly consistent with what the otf 1st opined was necessary six or seven years ago before the cfp be even existed. This is vastly overdone. That is my view, but im happy to talk further with you. I would generally suggest that you want to scrub it. Ill be glad to take a look. A look. I cant imagine that we are and if we are that would reassure us all. Make sure the chinese dont have a before you do. Will look to give you reassurance on that. Senator. Thank you, mr. Chairman. So, since the cfp be has had a Consumer Complaint hotline where consumers can comment, go online, logic complaint about a Financial Product or service. That service. That is where consumers have been doing. They come in and complain about sketchy fees on aa Checking Account errors on a Credit Report, harassment by debt collector. The agency then sends those complaints on to the company who then has some time to respond to the consumer and the cfp be and to try to resolve the issue. Now now,issue. Now, the agency has received more than 650,000 complaints through the hotline. Could you give us a sense, just a ballpark figures fine about how many of those complaints were resolved for the Consumer Satisfaction . And how much consumers have recovered financially through this process . And i we will say the arc r complaints continues to increase in terms of volume which is simply a function of there still a lot of lack of visibility. People dont no what the cfp be years and we will no more overtime. I hope they will see we are providing value. We had Something Like 700 credit card complaints of our 1st month and are now up to about 25,000 across the entire range of Financial Services. What happens then is we get the consumer a chance to tell us whether they were satisfied with the resolution of the complaint or if not what they continue to be concerned about and we then prioritize issues for further investigation or perhaps enforcement action or supervisory activity, and the institutions no that which pushes them to be more thoughtful about how they try to resolve complaints in the 1st instance. And i do not no the exact numbers, but it may be 20 percent of consumers continue to feel they have a dispute once we have worked through our process and then we have further steps that we can take. In terms of how much resolution has been for consumers it has been many millions of dollars. Hard to no exactly for sure. They do not always tell us how the matter was resolved, although many of them come back to our tell your story line and tell us often with your gratitude that they did get a resolution, could not for months and months and months but after speaking to us and us working it they get one probably which really thrills as we here that. But the other thing is, theres a lot of nonmonetary relief that people get from those complaints. Getting something fixed on a Credit Report can loom large and is hard to quantify. Although i take it it certainly does have financial ramifications. Absolutely. It may be that they can get a mortgage. It is hard to quantify. DebtDebt Collection issues are a constant source of irritation for consumers. The wrong debt or not the right person and i cant give people stop calling her home. I dont no how to put a price on that. Getting 12 calls a day, not the right person or whatever it is,is as being able to stop that looms larger people. Another. You made to me is sometimes it is easier always user to quantify the amount of relief we give back to people for things that happened to them before today, and we cannot easily quantify the benefit to them of things that we will happen to them tomorrow because of changes made today. Those go on in the future and accumulate extensively over time. We dont have any way of putting a price tag on that, but i think it is significant. You created this website, roughly 25,000 people a month, the website and rising. And they get some resolution. It looks like roughly 80 percent get some kind of resolution. So the agency also just recently went live with this Consumer Complaint database. Here you have a collection of thousands of narratives from real consumers but problems there having with Financial Products or companies command it is all portable. Possible to portable. Possible to go online and see a byproduct, date, where the consumer lives. Just this morning i went to the database in which all the complaints from massachusetts about mortgages. Its a powerful way to see what kind of issues of popping up in the communities that all of us represent. I no it has only been online for a few weeks but i wondered if you could describe how you think this we will help improve the market for Financial Product the database is actually been online longer kemal those broken into generic categories which were less insightful for people in hearing in the consumers own words what the problem was as they sought. I think thati think that is incredibly important. We describe the narrative is the heart and soul of the complaint. For me to make a complaint and have it be categorized as somehow Debt Collection, rocky mount, one of a number of complaints it is just not nearly as insightful as to be able to here exactly what happened. Because i got home the effect on my life. It is justit is just tangible, real, the difference between statistics and Actual Stories which is very significant. The database i think is causing institutions to have to compete on Customer Service which is aa good thing, and the good ones are competing well. Others areothers are having to improve and that is the kind of pressure that i think is positive. I we will also mention that are members of congress and this committee are now referring complaints to us. We encourage you to do that. We are supposedly the experts and are happy to work the complaint and you can see and keep track of how they go. We want every american with a problem to no to come to us to see if we can get it resolved. We cant always, but we will always try. I seei see this as a prime example of how government can take small steps that we will have a very positive impact on the market. There is now a bit more accountability for companies that mistreat or just plain cheap the customers. On the other hand theyre is stuff acknowledgment for the companies who treat their customers well and resolve complaints quickly. One little followup to the. That senator brown made earlier. Thats about forced arbitration clauses. Senator brown highlighted the report that the cfp be recently released contains some damning findings about how forced arbitration clauses fundamentally tilt the process against consumers and keep them from effectively fighting back. When they have been cheated. It is clear that the biggest banks and some of the republican friends in the house of representatives see the writing on the wall. So they are pushing legislation that would force the cfp be to redo the report before you issue any new rule. I think this is a stall tactic plain and simple. The report took three years and 728 pages to complete. It carefully documents a wide range of problems. I just want to ask you briefly because the chairman is indulging in him over time, but can we get on record to ensure that the study was complete and accurate including soliciting and considering comments from the Financial Services industry. Sure. We did a request for information at the outset to ask how we should go about doing this. We heard a lot from industry and different kinds of markets and also from consumer groups and others. And we erred toward the side of being comprehensive about what they told us we should do in the study and trying to do as much of it as we possibly could. In many areas this was breaking brandnew ground. Theyre was not data easily accumulated on that. Wewe did go to the American Arbitration Association of replica significant data about the arbitration process which shed light on that the people had not have before. We looked at a number of of different ways of trying to get a judicial resolution. We were helped in part because there was Class Action Involving certain institutions who at one time had stopped doing arbitration agreements so you can see what the beforeandafter was. It is save consumers money for them to have this forced arbitration process, and we were able to map that and design that. We looked at enforcement action as another means of effecting the marketplace, and people talked about our Consumer Complaint process has a knew element. It was a comprehensive report. I honestly do not think we could think of a single thing we could have done that we did not do. Were always happy to here more and have had tremendous and put all along and sense we have given roundtables and other opportunities to digest report talk to us about it which is an ongoing process. As we embark on rulemaking there we will be Small Business review panels. And theyre we will be notice and comment process. Everyone we will have there say. We willsay. Listen to it, digest it and do what were supposed to come act and the Public Interest consistent with the results of that report and determine what to do about this. Thank you. Thank you, mr. Chairman, for your indulgence. Senator. Thank you, mr. Chairman. Director cordray, earlier several of the members of the panel requested information concerning collection of data. Probably the reason why it is an item of interest is because of opm and the loss of the data there. A lot of our employees have come in and been concerned about the loss of personal data. We talk about the collection process you used and utilized to collect the data you want it on the market analysis, the question comes in. Are the organizations that are required to submit data do you, are they submitting from them through perhaps a thirdparty or are they providing data that has been scrubbed by the organization itself . Are you aware of how that works in terms of how you actually scrubbed the data were how it gets scrubbed . I am generally aware command we have people who are carefully focused on that and it depends on the Data Collection. Some of it is negotiating with industry. They have all this data. They know everything you are doing, everything im doing. I dont have objection to that. It can be positive or negative. Negative. The repositories of data are much more troublesome than anything we have. Were we can get the data on a sampling basis and asked specifically for certain fields and not others in the cost to us enough form the credit card database is vetted through experience, a Credit Reporting, one of the leading Credit Reporting companies that scrubs the data before it comes to us and remove certain fields. We are trying to make sure our employees do not have access to personally identifiable information. Let me just say, the opm breaches affect my employees as well as yours command we are sensitive to that and it is something we are now dealing with to make sure employees no what there rights are always available. The notion we would contribute to that ourselves is not something what it did was brought to light the fact that when we collect data we have an additional obligation to protect the data. What i was curious about was whether you actually receive the data and then scrub it or if it was delivered to you by a thirdparty. It sounds like what you have indicated is that in the case of some of the larger both data is being scrubbed by a thirdparty before it gets to you. A Credit Reporting agency with access to this data anyway. I be happy to have her folks, and present to you. Ii want you to have comfort on this. Were trying to be careful. I read and see the stories about the nsa. Im an american citizen have the same concerns that you do. But i think it is distinct from what were talking about here. Your main concerns. I think thats a good way to leave it and we will request that. Let me just move on several appraisals. We have had challenges. Im not sure how deep it is your gut, but overall appraisals of been tough to get. Im not sure how they are the urban areas, butareas, but rural south dakota trying to get the appraisal has been difficult. I no that you try to set it up so that we can identify rural locations. Im asking if theres another way in which we can get a 3rd or 4th look because we have communities and western south dakota that are clearly rural in nature but are not identified as such. Is theyre a process in place where we can get the challenge to place them in the appropriate category . We had a number of mortgage rules are required to do by law and one of them had to do with appraisals. The other was an interagency role of the Federal Reserve. I have always been somewhat concerned as to whether we got that right. One of the big issues is in rural areas theyre are fewer comparables. As more difficult. Appraisers might have to come from a greater distance, so they are not as accessible. Just barriers to be able to make the transaction. We have been working at trying to alleviate that, but i encourage you to continue to press on that. We will talk to the Federal Reserve. If there is more relief we can give because its a peculiar as and we want people to be able to get mortgages just as they can. Two Different Things. The appraisals themselves and what is expected of them and cops which many cases do not exist. Along with that your seeing legislation proposed that would create the ability for some of the banks were literally holding those mortgages because they cannot qualify on the secondary market. We want to make sure those are still considered an appropriate asset for those banks that end of doing that. Up doing that. If i could i just have one more question. I noi no when you work through the qualifying for the consolidated statements and the goal was to perhaps up for some of it. Last year is always moving around one of my Community Bankers said look, i just got a copy of the most recent release with a qualification statement and says that is closer statement has proposed is 164 pages. That was the pdf. Now the only reason i bring this up is if that is the case and is accurate in his definition and his explanation look, we have to have disclosures that people will actually read. Look, that is not correct. Correct. What he was talking about was the regulation, rule that implemented these forms is lengthy. I wish it were not one, but it is. The actual forms themselves are not 164 pages. That would be ridiculous. They are shorter than they were before when you have the two but are not as short as my friend over here really wanted to be. We were not able to achieve that. Five pages in three pages. We might find something we agree on. Look,look, if congress legislates congress legislate. Were at five and three pages. It is the Key Information the executive summary of the whole transaction. Were looking at trying to do electronic closings so that a lot of the paper just taken off and you can focus on the key form. We have tested those forms with consumers and they found them to be easier and more accessible and understandable. Thats the key. You know, it might matter in some sense in the abstract, but these are not lengthy forms. They are meant to be key summarized forms which is what were doing. Again, on the rural and underserved im glad to here more. I heard a lot from senator johnson. Here from senator tester and others about western states the population is more spread out. We are working to give more latitude to Community Banks and Credit Unions, portfolio mortgages in there own portfolio and have the beginning all the protections of the rule. I think we are to a good place that we will here more as we go. What i would say my time is up. Community banks are increasing their market share on the mortgage market. Thank you. Sen. Thanksenator. Thank you mr. Chairmans. Great to see you again. Two or three areas i want to touch on. I will try to be brief. One is when we started to see the hacking huge concerns i am hopeful that the acting director will move aggressively. One aggressively. One of the areas we start seeing this in the private sector side early on in terms of credit card debit card hacking was an area that i was not that familiar with them of the differential Consumer Protection between credit and debit cards. I no and think particularly about Million People using debit card having credit cards. They have different business models. Howhow do we clean this and to make sure. We have legislation which would harmonize protections. Will you speak to how we kind of better informed particularly as aa parent of dollars that use debit cards and credit cards, how we equalize his productions. I we will, and some of the regulation grows up through historical circumstances that do not necessarily make logical sense. Critical protections were developed that a different time and for different purposes than debit card protections. Another example of this is prepaid cards. Currently with no Consumer Protection. That is why we have been working to get that we will finalized so that we cover the gap. What youre saying is credit and debit cards started out as being seen as distinct. Credit cards were about credit and a way to get away from just store cards and give you credit generally. Debit cards were seen as having to do with atms and other things. They merged morethey merged more together as payment mechanisms. People often now may pull out one part of the other cannot think that carefully about them although some people are quite careful but there are differential protections. The Fraud Protections. The Fraud Protection of the credit card is 50 limit of exposure. And debit cards its 500. It made more sense when debit cards really only about the atm. I dont no if it makes us today. Its something i would invite congress to think about. And you may have guidance on that. Whether we can fix ourselves or have to have a statutory fix them a clear on. This is an area where i find either within the industry theyre is interest in our organization. Folks ought to no theyre are different projections. Let me move to another subject. One of the areas ive spent time on his looking at this dramatic growth, and they get economy with economy with the sharing economy on the ondemand economy particularly amongst millennials. One of the good side and bad sides, a lot of freedom with these knew work environments for some folks is quite lucrative to cobble together. There are a whole host of questions around the fact that there is a lack of social safety net areas not necessarily for your purview but something we we will have to work through maybe not with a topdown solution for publicprivate often opt out. One area we have been starting as more and more some estimates, much estimates, much of a 3rd of the workforce falls somewhere along this continued contingent workers. As we think about qualifying mortgages we have some concern and have heard concern that this emerging knew kind of 10994 contingent workforce, the traditional Banking System does not report their income in an appropriate way. Their ability to qualify is somewhat undermined. My undermined. My understanding is that excuse is the section that includes guidance for verifying and documenting. Is this an area you have taken a look at . If not i understand because there are now onnot a lot of policymakers looking at it. But the fastestgrowing sector of our economy. Anytime anybody asks the question and includes the phrase appendix q i know they are commendably in the weeds. Let me apologize. Any event the. You raise is an interesting one and something i have become increasingly aware of and concerned about. Theyre are different aspects. Were moving to an economy in which we have fewer fulltime full salary employees in the old model just as we moved over time away from definedbenefit pension systems, defined contribution pension systems interestingly the healthcare law is pro liberty as a peace of legislation in the sense that it does not cause people that have to be stuck in a job to get healthcare. But i would say several things. It creates more complications for people qualifying for a mortgage because it is harder to document income. Income may be more fluctuated. You start adding who is intermittent, whose contract, is temporary seasonal. A huge portion of the American Population. We need to look at mortgage rules in light of that. Is not an easy thing to handle but something that we need to go back and think about. From the standpoint of wealth and retirement accumulation for americans this is going to be an increase inincreasing the big problem. Pension plans and 4 o 1 k contributions tend to be limiteds to the fulltime. I people and everyone else does not have access to the ability to put away savings and we have to think hard about what we do about that. Falling behind in wealth and retirement disparity. Thank you. Thank you, mr. Chairman. Thank you for being here. In our office we talked a little bit about to him. I know we were all working on this issue way back when in the bad old days when so much was happening. We were all concerned about the 5 percent risksharing if you remember. Remember. That is where everyones focus was an trying to figure out a way to get that right. One of the things we have looked at and legislation is dealing with qualified mortgages the institutions giving 100 percent of the risk i wonder how we try to differentiate between small Institutions Holding qualified mortgages i know we talked a little bit about it. We generally are trying to find ways to consider to encourage Community Banks to do mortgage lending. That is why we have focused portfolio provisions to benefit them. Ive concerned about it at upper levels because the logic of it may or may not obtain a larger levels. Experientially i am experience we i am aware we had a number of institutions that a lot of portfolio and in the blue up. Washington mutual countrywide, america west. Some of these companies that really threaten the economy Community Banks and Credit Unions would have borne the risk in themand have been highly responsible about it we are looking to encourage them. I agree with much of what you just said. It seems to metheres Something Different than just stopping at a 2 billion. I manufactured housing i live in a state where you know you know, we have a lot of people that had difficulty affording housing senator brown lives in a state where theyre are a lot of people that have difficulty affording housing. Associated with doing that up front end up bumping up against some of the regulations we have. I just wondered if you might address that and at least address the fact that you understand that is a problem and i mind wondering if we might collectively generate a solution. The problem i happen concerned about, and it is a real problem and isnt limited to manufacturing housing, you go to the lower end of the spectrum for loans, the smaller the loan, there is still a certain amount of cost that have to be incurred to get the loan. At 25 50,000, many homes like manufactured homes are that cost. The law we implemented provided for that saying under 100,000 fees and point cap risuse ps to four and five. And rather those numbers are at the right spot is a point of attention. Manufacturing and housing falls into the spectrum and i want to know people at the lower end of the cost spectrum can get access to mortgages are not are blocked from that by something in the administration or cost of this just as automobile lending is going down the spectrum. People need cars and to me that is a good thing. I am happy to talk further with that. We have been trying to look at the data on manufactured housing. People have been raising if this is a problem or not a problem. What we do see is every month of last year from the Census Survey data manufactured housing lending was up from the year before. Some of the leading manufacturers are going to be profitable and i dont know what to make of the concerns people are raising to me. I will say this issue of cost on a smaller loan is a universal issue and problem and one maybe we should be thinking further about whether the thresholds are right. Mr. Chairman, thank you for the time and a i appreciate you looking lookingidate looking at the data. We have seen data where numbers of these people are unable to be served and are paying more for rental housing than they could be paying for actually purchasing a lowercost home of either type rather conventional or manufacturing. That doesnt sound optimal. Senator heitkamp . I am listening here but i feel we are not hearing. You dont require the transfer of personal identification other than to do Consumer Services based on a complaint. Is that what im hearing . In matters with where we will get money back to consumers we need to have information to get the money back. They would not be individual complaints but a broad sweeping investigation where you then would require individual information . I could not institutions with credit card matters. We need to get the funds back. In terms of Data Collection the only way you would have personal identified data would be if were necessary to serve the consumer. I believe that is correct. There is no purpose in having it otherwise. Do institutions send you a bulk amount of data having that information with it requiring you to scrub it or do you always get information that has been scrubbed where Social Security numbers and personal identified information would be removed. I would like my staff come brief your staff. I think maybe just a report back to the committee would be helpful. That is fine. That is typically our aim and i believe it is through an all circumstances but i am most hesitant to say all without making sure the staff says it is correct. I want to make one final point on this which is interesting to me. Where we are deeply concerned we should be equally concerned about the Cyber Security of the information where it resides which is with the companies that you access every day. And so they are going to have any breach of their data is more damaging than access to your data that is being used for market analysis. Sure. Target, home depot is account information, Social Security numbers is very problematic. I think another thing that would be helpful and we have found great response from your agency on what is rural and what isnt. We think you have probably made the right decisions in north dakota but i am curious about the percentage of land mass in the country you determine is rural so if you could get that to me that would be great. Also reiterate the concern about the consultation and i would be interested in that as well. We need all agencies to appreciate what that means. I know you have me promising to come visit you. I was going to mention that. I do have to say where we can disagree i think your personal integrity and unimpeachable and you are doing a difficult job and i want to thank you for your service. I believe having clerked for the Supreme Court at one point with your great academic background is someone who is valuable and i am partial of course. I want to reiterate some of the points you have been hearing about where we are at with the people we are trying to protect and what i think what we are all trying to get out is how do you balance protecting the consumer against access to necessary credit whether it is small dollar ending manufactured housing, access to Rural Communities or native American Communities to the market. I think there is a balance there. And i know i have told you my story, i was probably one of the first people getting beat up by shutting down preditory lending and learned something in the process. Sometimes people need diversity and sometimes they need gas and have a flat tire and cant fix it. These are folks living on the margin. I understand the need to protect people. But i understand the need to have some form of small dollar short term lending. What do you think those products, and this is my last question, what do you think those products should look like and how do we achieve that balance and how do you as the director i think address the concerns that we have which is lets give people access to credit. It helps build their credit. It helps build america. But lets also protect them. That is a tough balance with this population. It really is. And by the way we sought this issue with mortgage rules and in the dodd frank act they passed certain things that was required at a time when it was overheated and responsible and the underwriting deteroited and we wrote the rules and became aware with how to balance protections, which we want, which access to credit, which we dont want to check off. I think we did well with this but we are monitoring and trying think about. Same thing now in these small dollar rules. We know people have a demand for small dollar credit. They had it for over a hundred years. And they get that demand served in various ways. Some products are more responsible and some less but people have a demand. We cannot choke off a supply to them but at the same time we are concerned about the issue of the debt trap and people thinking they are getting in and getting out but many roll over and get stuck at a high cost. That is the issue we are trying to address. Whether the model relyies on that to subsidize loans i am not clear. It is something we are trying to figure out as we work on the rules. I have the same objective in mind you describe. People need access to money and not everybody has an uncle or sister or mother in law they can go to for 300 or 500. If they did it once or twice they may not be able to go a third time and we get that. I dont know if i am the right person to say what all of the right products are. We are trying to identify there are certain wrong products we want to rein in and leave access to credit. How to get there is a difficult issue and i am hopeful and we are working hard to try to under it enough to get it right. Thank you, mr. Chairman. I think senator heitkamp raised a real important issue and we talked about this before mr. Cordray, we dont want to drive the small marginal consumer underground where there is no regulations because that is what we had before. And i believe that goes right to the thrust of her question. How do we do this without over regulating this and how do we have access to some type of credit . Senator cotton . I want to talk about Affordable Housing that senator corker touched on. Hud data is indicating there may not be a single county in the country that has enough Affordable Housing this is acute in rule states and i represent a rural country and where i live there are not a large amount of homes being built or stock of rental units which is why manufactured housing is the most affordable option for many. They pay less on a mortgage for a manufactured home then they would pay for a limited supply of rental stock. As you describe there is a basic math problem where it takes a certain amount of time and resources to process any loan whether it is 40,000 or 4 million and over a bigger loan that cost is spread out across a bigger base and therefore the percentage cost dont appear to be as high. Over a smaller loan like manufactured housing it is smaller base and spread out and appears to be higher reer even though that is the preference of the consumer. Can you explain why you havent used that and maybe if you are looking ahead to grant relief for families and lenders . We did consider this and careful with input at the time we adopted our mortgage rules, our big set of mortgage rules in 2013, and this issue was raised and the 3 was not seen as appropriate for loans under 100,000 and it went to four certain levels and five at lower levels and a dollar figure at the lowest levels. Now, that was an effort to try to address the issue you are raising i see as a legit issue. Whether we got the numbers right, whether we should reconsider them and think further about them just as we reconsidered about the rural and underserved issue is a fair point. It is one i will take back from this hearing. I do remain concerned that credited at the smaller, lower dollar end of the spectrum it is tight it is tight for people who often have lower Credit Scores and more difficult access to credit. I dont want to try to pretend to redo underwriting that is being done by institutions on that. But whether those numbers are set at the right level and 100,000 is the right level or things i am not clear on it. I think we should look at more issues and we should have a fruitful discourse on whether there should be changes. Thank you for that. And in your reference to senator corker about some encouraging data i think that is limited to the sale of new manufactured housing. There is a still a robust market for refinancing and for secondary sales. Manufactured housing doesnt have the same life time Single Family housing does but often times families need the housing at a change when newly married or children and going through economic changes and ready to move into a different kind of home when there is another family willing to buy their manufactured home. I would like to turn to another question. You brought enforcement action against phh. You didnt file a lawsuit but went in front of an administrator judge who ruled 6. 4 million and you overturned that and imposed nine of 109 million. Can you explain why you pursued an Administrative Law junel as judge and what decision went into imposing your decision and make the fine much more . It was discretionary decision and we used Administrative Law judges sparingly. We have been in court, and we are in court in many, many matters. One difference is the alj route can be faster with more streamlined streamlined. Rather that is good or bad is in the eye of the beholder and that happens to be the purchase used in this matter. As for the decision, that decision is published. And the reasons for it are set out on their face. I think it was maybe a 36page decision. So it is lengthy. The particular point you are getting out had to do with whether under the law, and this is not an obvious point, and the Administrative Law judge saw it one way and i saw it another, under the law whether if you violate the statute, is the right relief only contracts that violated the rest of the statute after a certain date . Or is it payment made after certain dates on contracts that violated the statue but has to do with limitations here. Not an obvious point but once decided one way or the other it makes a difference. That is the soul reason for it. I thought the law pretty clearly was one way. Others may see it differently. But we tried to come to the right result as we understood the law. Thank you for that explanation, director. You are right the concern i am driving about is more about the structure of the Decision Making between your own bureau and agency as a whole. Your own bureau has features that make the problem worse the fact the budget isnt subject to up appropriation and these are not concerns on you but the nature of the bureau. Madison said the accumulation of all power in the same hands may very justly be the definition of tyranny. So independent of your judgment in this case or other case i am going to continue to have these concerns. Having said that, i am here in front you have and consistently and happy to be speaking to you i regard the legislative oversight is vigorous and the decision is subject to appeal. It is being appealed to a court. I hope they will see the case the same way i did and think i did it right. If they disagree they will tell us and we will abide by that ruling. So we are subject to review in that way. We are glad to have you and have the review but the original fact finders without tenure and protection is different that agenciesburrowseaureaurowseaubureaus. Regulators issuing rules under the force of law can impose penalties. We have to answer to people we serve home for the wisdom of the rules. Not a specific commentary on this case. Senator merkley. Thank you very much, mr. Chairman and thank you director cordray for your testimony. But i want to thank you in particular for your leadership of finally having a watch dog fighting for consumers and fairness in financial transactions. In your testimony, you note that the Bureau Enforcement activities results in more than 10. 1 billion in relief for 17 million consumers. This is specific funds that come from addressing pred tory practices that has been returned to 17 million families. Some is direct restitution, some is uncompensated victims, some is mortgage relief some of it is debt they would other wise be required to pay and might be subject to further cost and Court Proceedings that are forgiven and wiped from the books. It is relief from a American Consumers and the other point senator warren made is every time we correct practices the same things dont happen Going Forward and you can expect the same money is being saved each year in the future but it is hard to quantify that. It is hard to quantify but every time a consumer gets a fair Mortgage Loan a great deal of help has been created in terms of the wealth building enterprise versus a wealth stripping one. I want to turn to the subject of pay day loans. You are engaged in playing out the policy and framework of not yet a draft regulation and taking feedback on it. In oregon, we proceeded to establish a rigorous framework reestablishing a usery cap on the full range of loans, consumer loans title loans, pay day loans, because we saw the migration from one area to another where states tried to tackle the 500 percent Interest Rate in pay day loans. But we see aggressive outreach by pay day Loan Companies to solicit people online and do so outside of the framework of state law. And in that regard, about once a week i get a text message like this one that came the other day, dillion, i dont know who that is but whoever he is he is one click away from a loan. Do you need extra dollars . Bad credit is okay. Approved in four minutes. Click here. I am convinced this is not a pay day lender operating here and it is probably offshore. I receive phone calls for dillion. If dillion is out there anywhere and wants his phone messages please contact me. So folks then respond to this and say okay this is convenient. I dont have to go the brick and motor pay day loan and we still have those stories in oregon even though they are operating at 36 credit rate. They are providing credit as is every state who cracked down on the 500 Interest Rate. They are getting snared by the online solicitation. This works because these companies are able to use Electronic Fund transfers and or remotely generated checks and once they have the number of the accounts of the individual they reach in and dprb grab the money even though their loan is in violation of the law. How do we stop this . Maybe you need a better spam filter on your phone. Or maybe you getting good intel. Second, this is a problem in many states. I hear about it as attorney general in ohio, and hear about it at the Justice Department who battle with this especially something that is international in scope like a scam from this year with some folks based in kansas city but they were incorporated in turks and cakes, which i dont know where that is. Maybe it is in the caribbean . Caribbean, all right. The enforcement of that is quite difficulty but important. One might not online lending would be more efficient because you had not need brick and motor. What does it tell you about a customer they are iacquireing if they think think is worth the 400 the get them on the line. 720 percent Interest Rates is what we are looking at and that is a major concern. In terms of the small dollar lending rules we are working on now, that is a big piece of it. The account access where they can take the munoney from your account creates risks. That was the problem with the Kansas City Group we shutdown earlier last year. These things were something we were wrestling with because the account access creates vulnerability for consumers and causes them to be trapped in the loans and they dont appreciate what is happening in the fine print. It is something we are trying think carefully about but we are aware of and very sensitive and concerned about the problem you described. Thank you for your efforts to wrestle with this issue. It matters a lot to a family whether or not they acquire a pay day loan in oregon under a 36 Interest Rate cap or respond to the text message or phone call and end up with a 500 percent interest loan from a group that is operating with no accountability and reaches in and just takes money without authorization. There has to be a solution to this. I have suggested several in my stopping abuse and fraud. The electronic ending act safe act in 2013 continued to look for a way for fair lending to happen to help families succeed and stop these practices. I know that is the business you are in and you are doing a great job and thank you for the work you do. Director cordray, thank you for appearing, again, before the Banking Committee and we appreciate your testimony and your frankness. Meeting is adjourned. Thank you. Nasa science held a meeting. Road to the white house begins tonight. At 8 eastern we are live for the Democratic Party hall of fame dinner. All day saturday starting at 11 a. M. Eastern we are live at the family leadership summit in iowa and sunday evening a little after 6 30 interviews with two president ial candidates. We are live from the harlem book fair on cspan2 over the weekend with talks on africanamerican identity, race and politics. And sunday night at 10 00 an coulter says the greatest issue facing the United States is immigration. And on cspan3 we are live with talks on the first ladies including including michelle obama. And a little after 9 00 the National Archives of kansas city shows how the United States used proper propaganda to get female female people to join the military during world war ii. Nasa discusses the newest finds from the new horizons to pluto and then we talk about the talks of who shot down the malaysian plane a year ago and then we talk about criminal Justice Reform efforts. Nasa scientist held a news briefing to discuss the latest findings of the new horizons spacecraft that took the first images of the dwarf planet