Transcripts For CSPAN3 CFPB Director Kathleen Kraninger Testifies On Agencys Semi-Annual Report 20240712

Up next testimony from dacts lien kraniger. She talks about her agencys role in protecting consumers during the pandemic. This hearing will come to order. This hearing is another remote video hearing. Ill go through quickly some of the standard reminders to remind everybody, once you start speaking, there will be a slight delay before your picture shows on the screen. To minimize background noise, please remember to click the mute button until it is your and if theres a technology issue, weve move on until it gets resolved. The fiveminute time still some senators say they dont seem to be able to find that. If you go to the righthand side of the screen and move your mouse, some options will show up. One of them is the grid view. If you click grid view, you will see a grid of everybody, and one of the things youll see is the clock. Ill try to gently remind people, because some senator have asked for the reminder because they cant see the clock. Again senator brown and i have agreed to go by seniority in this hearing. Today we are receiving testimony from cfp director kathy kraniger. On the cfpbs semiannual report. The report outside lines its significant work between october 2019 and march 2020, including rulemaking and supervisor regulatory activity. It also provides inpsysightinsi. It planned three days before President Trump declared a National State of emergency related to the covid19 act. Shortly thereafter the cares act was signed into laws which helped families directly, and to stabilize our markets. In implementing the cares act, the cfpb has taken important action to Consumer Credit reporting and data reporting to further address the Economic Impact of the ongoing pandemic. The cfpb has also announced several policies, intended to help consumers take steps to protect their finances, and to ensure that regulated entities can take reasonable and prudent steps to by the coronavirus. I commend director kraniger and her staff for taking these steps to help consumers families and Small Businesses as they continue to weather this global coronavirus pandemic. Last month, the Supreme Court issued a ruling that found that the agencys structure led by a single director only, only removed for cause, is unconstitutional. The courts decision on this case is consistent with ma many in congress have long said. The cfpbs structure lacks sufficient accountability and transparency. I continue to advocate for establishing a bipartisan board of directors to oversee the cfpb, subjecting them to the annual appropriations process similar to our federal regulators, and establishing a safety and soundness check for regulators. They timized a rule of the small dollar loan rule. The availability of short term small dollar credit is essential to millions of americans. Updating this rule is an important step toward ensuring the availability of credit that is essential to so many consumers who struggle to access or qualify for other options. The changes made, the final rule carefully balance ensuring the widespread availability of credit to all americans, while preserves strong protections for all consumers. During this hearing, i look forward to hearing more about the impact of the covid19 emergency on consumers and the financial marketplace, key covid19 in addition tills underdane, additional regulatory changes that can further support the economy, and the directors priorities for the upcoming work period. Director kraniger, thank you for joininged committee this morning. Senator brown. Y you. Thank you, senator. And thank you, director for participating in this meeting. Across the country in big cities and small towns alike, americans are calling for their government to work for them. Nearly everyone has had their lives upended by this pandemic. You know, ms. Kraniger have seen worker see their while washington shovels more tax cuts. Families expenses have only grown, the cost of housing, child care, prescription drugs, all those costs have gone up, leaving 40 of americans unible to come up with 400 innage emergency. Black and brown americans have never had their hard work pay off like it should, and they live every day with systemic racism that threatants that are health and safety. From jim crow do redlining, you know black families have never had the same freedom and opportunity to choose where they live. The urban snunt said this, the gap in Home Ownership a gap in Home Ownership rate between black and white families in the u. S. Is bigger today than it was when it was legal to refuse to sell someone a house because of the color of their skin. The racial wealth gap has increased the average white family now has ten times the wealth of the average black family director, you know that black and brown consumers disproportionately lack access to basic Financial Services, forcing them to rely on costly alternatives. This leads to socalled reverse redlighting where there are exploitive loans and other thats why its easy to find a payday lender than a branch bank in certain areas. People are angry and frustrated. Americans watch ceos pay themselves while laying off workers. They see corporations scam people and get away with it. Theyre told to pull themselves up by their bootstraps while wall street gets bailouts and handouts. Americans feel like no one is on their side, especially in this administration. Thats where the Consumer Financial Protection Bureau is supposed to come in. Your job, director kraniger is to look out for everyone else. The workers and families without lockyists. Thats why we created this agency a decade ago. In a moment when americans of all ages and backgrounds are demanding justice for our black and brown neighbors and accountability for the corporations that exploit them, you have the power as the director to actually do something about it. Cfpb has the tools, resources and legal requirement to root out discrimination in lending and protect communities of color from shady Financial Products that strip away their wealth. Under director cordre, returning more than 500 million to black, latinx and asian americans. The Consumer Bureau did not bring one single action, one single case of illegal discrimination for more than 2 1 2 years. Sadly thats about what we would expect from a president who seems to have made it his mission to roll back civil rights protections, and at cant of the United States who openly uses race to divide us. We might have hoped in this moment of National Crisis, 30 millions americans have lost their jobs, we might have hoped in this moment of National Crisis President Trump and his appointees would rise to the occasion. Instead, director kraniger, like other pointes you have exploited the pandemic to roll back protections for American Families instead of strengthening them. During the pandemic, americans have reached out in record numbers seeking your help. We have seen an 86 increase in complaints about credit reporting, but instead of cracking down, director kraniger, nothing would do nothing to punish banks or other cropses who make mistakes on consumers credit reports. Instead of helping struggling homeowners, Consumers Bureau weakened rirmtsds that banks and lenders contact homeowners to help them avoid foreclosure. And last, families have been forced to turn to credit cards to make ends ends meet. The cfpb is supposed to look out for them has made it easier, not harder for the Credit Card Companies to rip off consumers making it easier for credit cards to hide their terms in true place. Director kraninger decided that a pandemic is the right time to push consumers into predatory pay day loans. In march the bureau released guidelines encouraging banks to get into the pay day business. In may the Consumer Bureau released information on how banks offer pay day loans could apply for immunity from bureau oversight and enforcement and in july, despite extensive evidence of a corrupted rule making process and calls for any Inspector General requirement, that lenders make sure a consumer could pay back the loan. Direct kraninger has told Financial Firms they will give them a pass when they break the law so long as they make a good faith effort to comply. This is exactly why most people think our system is broken. If your utility payment is withdrawn before your paycheck clears, if you overdraw your account, the bank doesnt waive the fee because you make a good faith effort to deposit that check. We have one system for the powerful and wealthy and well connected where you could get away with anything in this town and around the country and a different one for everyone else for your good faith effort never seems to be nif. Dr. Kraninger, we didnt need a Supreme Court decision to tell you would not be independent from President Trump. Ive got to hand it to you, youve gone exactly the job the president of the United States has asked to you do. You protected corporations with sun set of rules and a different set of rules for everyone else. Thank you, mr. Chairman. Thank you, senator brown. Director kraninger, thank you for being here today. We appreciate your attendance and look forward to our discussion with you. I would like to ask you to remember to honor the five minute rule for your oral testimony and remind our senators that we have the five minute rule and we have the clock and i intend to stick with it. With that, director kraninger, please begin your statement. Thank you, mr. Chairman. Mr. Chairman, Ranking Member brown, members of the committee, thank you for this opportunity to provide you with an update of the cfpb important work. I appear before you as the country is engaged in a National Conversation on racial inequality. As well as confronting the unprecedented pandemic. Today i would like to discuss both topics with you. Under my leadership, the cfpb is taking steps to create real and sustainable changes in our Financial System so that africanamericans and other minorities have equal opportunities to build wealth and close the economic divide. Yesterday i authored a blog outlining the bureaus important work on fair lending. We also issued a request for information on how best to create a Regulatory Environment that prevents credit discrimination in all aspects of the transaction and expands access to credit. The information that is submitted will help us enforce the equal opportunity credit act or eoca. Among the topics are how to better protect consumers with limited English Proficiency and applicants from any public assistance program. I encourage the public to respond so we could build a Financial System that treats everyone fairly and provides clear rules of the road. Recently the bureau filed a lawsuit alleging a lender have violated ocoa by discouraging africanamericans from loans. And a Mortgage Corporation violated the Home Mortgage act by submitted years of Mortgage Loan data that contained errors in the field of race, ethnicity and sex. Since my last testimony before the committee, i have requested critical authority from congress to allow the bureau to compensate whistleblowers. In our enforcement work weve seen firsthand that whistleblower could provide key information. I want to thank senator courtes masto for introducing legislation similar to what i suggested and stand ready to secure this important authority. Now let me take a moment to discuss how were protecting consumers during the pandemic. Weve worked to expand our reach to consumers to provide them with actionable useful information about their rights, options and expectations in the market place for Consumer Financial products and services. Weve produced over 70 blogs and videos accessed directly by more than 3 million users. Their social media staff estimates materials have been sent to 41 million users. These materials are available in seven different languages and constantly updated to adapt to the changing dynamics. Weve also promoted our Consumer Complaint system, when consumers submit complaints they help inform our work in supervision, enforcement and regulation and education. Specifically in response to complaints and other market and Stakeholder Feedback during the pandemic, we worked with inner agency parktners as well as c. A. R. E. S. Act payment concerns. From january 1st through july 26, 2020, consumers have submitted more than 270 complaints to the bureau of which more than 14,000 complaints reference coronavirus. Each month from march through june set a new monthly record for complaints yet our Consumer Contact Center and our online portal have operated efficiently and effectively throughout the pandemic and take Consumer Complaints and refer them to companies for a response. We also partnered with other federal agencies to develop and launch a unified housing website to provide consumers with comprehensive and Accurate Information on their rights during this time. The bureau has developed a new targeted supervisory approach to focus on markets and institutions that pose the greatest risk of consumer harm as a result of the pandemicrelated issues. We remain fully engaged in the execution of the Critical Mission including continued progress on our regulatory agenda which is relevant to the kpik recovery as well as our advisory work. Realizing the Important Role in our Consumer Protection mission and preventing harm. Im proud of the bureaus staff and the excellent work during these challenging times and i thank you for the opportunity to testify today and look forward to your questions. Thank you, direct kraninger. This month the cfpb issued a final rule amending the 2017 small dollar loan rule by rescinding the mandatory underwriting provision. They revised the rule after evidence of provisions was not sufficient lid robust and reliable to support their continued inclusion in the rule. I appreciate the cfpb for taking action to ensure that regulations that could affect consumers access to credit are based on solid evidence and Legal Support rather than flawed analysis. Can you explain why the 2017 analysis on mandatory underwriting provisions was flawed and limited rather than facilitating Consumer Choice . Thank you, senator, for raising this important issue. Weve seen that the demand for small dollar products is substantial. Consumers need that access to credit. That absolutely includes responsible small dollar products from banks and Credit Unions and in the past decade a number of different policy and actions by governments and others have limited the availability of that krieind of credit. The pay day rule as we looked at it and reconsidered it, looking at again the evidence and the impact that it had on the aveil ability by the bureaus own analysis in the 2017 rule it would reduce the availability of that credit by at least 70 . So looking again wholistically and taking a step back at what is available in the market and taking a look at evidence that was there, promoting competition and enabling consumers to understand the products available to them is a huge part of where we are today. Both rescinding the mandatory underwriting provisions that were very specific and did not avail themselves to small dollar lending, putting forward the payment provisions so it is my intention working through the litigation to have the payment provisions go into effect. And also doing the work were doing on testing disclosures to again see if we could promote greater understanding of those products. That is the best approach for how to proceed in this small dollar market place. Thank you. To me, the notion that the previous rule, the 2017 rule would reduce access by 70 by the bureaus own statistic, that is correct, what you found, or what the bureau found. Yes, sir. That is remarkable. Now the bureau and you are being criticized for this adjustment to the rule claiming that it is pushing people into the laps of predatory lenders. How would you respond to that . Senator, i think, as i noted, the desire to increase competition and ensure that there are fair and transparent markets as part of the bureaus mission, that is our focus. I could tell you we still are very much engaged in supervision and enforcement in this space. We have taken public enforcement action against bad actors in this market. There are bad actors in every market that the bureau supervised and enforces against. But that is not something that should preclude the actions of those that are seeking to comply with the law and are seeking to provide options to consumers. In addition to recognizing that the states have made their own determinations about what kinds of products should be available to their consumers and continuing to enable the states to again oversee those aspects of the market. Will proposed new rule open access to companies, Financial Institutions that are currently not presiding small dollar loans but giving them the opportunity to provide the small dollar loans. That is absolutely part of the intent, senator. In addition to that we issued a no action template to encourage banks to offer small dollar products and we anticipate that a number of them will do that in the coming months. So looking forward to again continuing to promote that. There are also Credit Unions that offer similar products and were trying to, again, facilitate that kind of availability for credit for consumers who need that. So it seems to me that the intended outcome here is what we maintain protection and security against predatory practices and significantly increase access to credit. Absolutely, senator. That is the intent. Thank you. Senator brown. Thank you. Id like to ask you about the pay day rule that cuts protection for consumers. I have an internal cfpb about the rule making made public in april. This momento is written by a senior career employee closely involved in the pay day rule making. Have you read this memo, director . Senator, i have. Thank you. The memo, as you know, describes repeated efforts by your political appointees to manipulate economic research, containing details specific dates and names of individuals involves, identifies corroborating emails and other documents, according to the memo your political appointees ignored research they disagreed with in order to repeal the loan. Is it proop for cfpb to ignore research. It is available in the process well i know youre good at testimony. Youre very good. But the question is, is it appropriate to ignore research as this memo claims that is it appropriate to ignore it . It is a different view on is it appropriate to ignore the research. We have a full record of research that we relied on in the entire process and it is youre obviously not going to answer. The fact that you proceeded to finalize a rule, director, despite a clearly corrupted process again that youve read raises questions about whether you follow the law. So let me ask some quick basic questions. Under the administrative procedures act should the cfpb determine the outcome before it begins rulemaking process, yes or no. That is never occurred. Process and the public back and forth are critical to it. I testified to that with respect to this topic and others before the certainly from this memo it certainly did. Let me ask another question. Under the afta should it ignore research that the agency disagrees with, yes or no . Senator, the full record again is out there for Public Comment and my decision was based on that. Okay. According to this, not. But i have the basic question, should the director overturn what recommendations are. So if the cfpb had done any of these things during the pay day rule making process would it violate the apa, yes or no, if they ignored and overridden and ignored and not taken into account, is that a violation of the apa . Senator, some of this is hypothetical and that is your nonanswer raises questions about your leadership and concerns of so many about the corruption of the rule making process that again shows that you are doing the bidding of the president of the United States. The president who always sides with corporate interest and with big banks and with pay day lenders against the public. Let me shift to fair lending. Ive been highly critical of your decision to restrict the office of fair lending of oversight duties and i warned this would cripple fair lending cases. You assured us this is not the case. Look at how things have turned out. During the to consumers who have been discriminated against by Credit Card Companies and lenders and mortgage lenders. Duringyer tenure how much has the cfpb returned to consumers discriminated against by Credit Card Companies. What is the figure . Senator, i dont know that there has been a continuation of the kinds of cases youre noting. Id like to note that could be read as a success of the original Enforcement Actions i dont think that those companies have actually 500 million with cordray and 0 with kraninger is not what the world got cleaned up when President Trump came to town and cleaned up the swamp. And this bureau is not doing anything. And how much is cfpb returned to consumers discriminated against by auto lenders . Is that number also zero . Senator, all of our restitution and Enforcement Actions that are public are out there. I take your point. Fair lending cases are actually incredibly challenging to bring. That is why ive sought whistleblower Compensation Authority but we are proceeding theyre challenging to bring against auto lenders, mortgage lenders, Credit Card Companies. But they werent so challenging that director cordray couldnt recover 500 million. So weve seen the cfpb hasnt returned a single dollar to victims of discrimination since you became director, that record speaks for itself. Thank you, mr. Chairman. Thank you. Senator kennedy, are you there . Senator kennedy . I think we have several of the other senators who are not yet at their theyve had to check in at other hearings. Im going to wait another five or ten seconds and go from senator kennedy to senator me menendez. Senators who are available click your camera. I see senator tester, senator tester, well go to you. Thanks, mike. I appreciate you having this hearing and thank you to the Ranking Member also. I want to kind of follow up on the Ranking Members questions. Because the statistics out there, i mean you talked about in your opening statement, what a find job that is being done on supervision and enforcement. But in 2015 there were 55 Enforcement Actions taken and these figures may be incorrect, if they are let me know. In 2018 there were 11. That is an 80 cut if my math is correct. What do you attribute that to, if in fact as youve stated that youre aggressively taking action against bad actors . Senator, i could tell you speci certainly in 2018 i was not at the bureau but the transition in leadership that i have testified to is logically requiring folks get up to speed and getting comfortable. Every enforcement action is a decision by the director and that i take seriously. Last year we had 22 public Enforcement Actions in addition to resolving a number of prior litigation actions and i expect that that number at the end of this fiscal year will be notably higher. We continue to work our way through appropriate Enforcement Actions and one real focus area for me is actually making sure we have timely action both for those who are potential victims and lets just follow this up. I had a friend that worked for an auto dealership in a was a lender and i quit the job because he didnt feel right because he knew he was taking advantage of people. This is long before i got in the senate. The Ranking Member brought up the fact that there were 0 returned to consumers from auto lenders. Could you tell me why you dont think auto lending is within your purview or you dont think theyre doing anything wrong or what is the reason . Senator, the question that senator brown asked was with respect. This is the question that i asked. I would like to distinguish the questions because youre asking in general about auto lenders as opposed to a fair lending case, just to be clear and related to discrimination. But there has been Enforcement Actions against auto lenders including restitution and compensation through our supervisory activities as well. Some of that, what we get through public enforcement action is public and i could get you that number is any of that returned to the consumer . Any of those dollars . Yes. Yes, they have been. How much . Off the top of my head, im sorry sir, i cant, but well get back to you on that number. I would appreciate that. Has the bureau changed Enforcement Actions during this crisis . Yes. Senator, we continue to robustly engage in it. We are very mindful of inner action discussions around fraud and scams and keeping an eye out for those kinds of activities in our slice of the market. Have Enforcement Actions increased because of this crisis . I could tell you that the number of investigations ongoing has increased, were moving as quickly as we can. By how much. The number of investigations open is not a public number. Im actually looking at that senator because i know that people ask im asking for a percentage. A percentage increase, again i wont want you to give you a increase off the top of my head but we could certainly talk about numbers with your office that are appropriate given the confidential nature of Enforcement Actions. Mr. Chairman, i will tell you that director kraninger has been very, very good at not answering questions. By the way, that is not a good quality. I did that once on a news show and i had a say youre an idiot and never did it again. These hearings, with dr. Kraninger have been a total waste of time. I hope this administration goes away because quite frankly we need somebody who will protect consumers and not just give us spiel. Thank you, mr. Chairman. Thank you. Senator menendez. Thank you, mr. Chairman. Since the survey data indicates that about 17 of black homeowners and 8 of latino homeowners reported having missed their mortgage payment in may compared to about only 4 of white homeowners. Adding to this hardship is the fact that black and latino households are much less likely than white homeowners to access foreclosure prevention measures like turning into forbearance plans leaving minority communities out of homesaving relief. The numbers are clear. Black and latino homeowners are four and 2. 2 times respectively more likely to report completely missing mortgage payments and deferring payments. White homeowners are only 1. 4 times more likely to miss payments than defer mortgage payments. It is clear there is a major problem with minority families accessing mortgage forbearance so director kraninger, what are you doing to address this problem and ensure that minority homeowners are taking advantage of mortgage forbearance and loan modification options. Thank you, senator. It is a crucial question during the times were facing now. Two responses, one is making clear that servicers are held to the requirements under the c. A. R. E. S. Act. Were doing that in partnership with the other federal regulators so we send a clear message to them. Weve worked on scripps so when borrowers call them they have the right information and clear information about rights. The second aspect of this is in addition to the unified housing website that weve pulled together, really doing everything we can to reach consumers through consumer advocate groups and other Community Organizations through their lenders, weve produce videos and blogs of what their rights are under the c. A. R. E. S. Act and the questions that they should ask their servicers when they contact them to try to provide both sides of that. Let me just say, the cfpb released the joint supervisory statement regarding Mortgage Servicing rules back in april. Black and latino homeowners have not entered into mortgage deferred programs at the same rate as white homeowners since the beginning of this pandemic. Now this could be for a myriad of reasons. Perhaps the mortgage is not covered by the c. A. R. E. S. Act or perhaps theyre not aware of rights under the c. A. R. E. S. Act. The fact remains that minority homeowners are missing mortgage payments at a higher rate than they are entering into forbearance including since the time the cfpb joints supervisory statement. As well as that in terms of Consumer Education, that website has been up for months. So it is clear that your Consumer Education efforts are not closing the gap here to ensure all homeowners receive necessary relief. And id also note that you still dont encourage homeowners to file a fair lending complaint with you. People are send to hud and told to call the cfpb only if the servicer doesnt fix the problem first which makes it seem that the cfpb doesnt want to hear about discrimination. And frankly it doesnt inspire much confidence that youll take a Racial Disparity problem seriously. So ill ask you again, what are you going to do to make sure that black and hispanic homeowners dont fall into greater dire circumstances, lose their homes . Are you ready to be more proactive, because if not, were going to see a tsunami of foreclosures on communities that could ill afford the one element they have for wealth is their home. Senator, again, i agree with you that this is a critical issue. I do want to distinguish between the Fair Housing Act and the equal credit opportunity act. We dont have jurisdiction over the Fair Housing Act. That is the distinction were trying to make. I welcome your ideas or thoughts with respect how we could continue to be as proactive as possible in getting consumers the information they need. They have rights and they have options and weve again tried to reached over 3 Million People directly including that video on evidently youre not reaching black and hispanic homeowners, i could tell you that right now. One final question, covid19 Health Crisis created an economic crisis. Country unemployment is 11. 1 according to the Federal Reserve and some had lost one job by may. As endebted it is only a matter of time we suffer abuse and harassment by some debt collectors. Do you expect debt collectors to go after more americans given the current state of affairs and what and what if i may finish my question and what are you going to hold them to in terms of the standard. Mr. Chairman, i guess very quickly i could respond. Senator, it is an important question. And we are working hard to, you know, to address the issues you raised and to see where we could go. So these are important issues but i know im out of time here. Well, it deserves a better answer than that. Thank you. Senator kennedy, are you on . Senator moran . Mr. Chairman, i am here. This is jerry moran. Go ahead, jerry. Thank you. Mrs. Kraninger, good morning. I want to talk about data privacy for a moment. I chair a subcommittee in the Commerce Committee that is jurisdiction over data privacy and worked with a number of my colleagues for democrats trying to develop a data privacy bill. Let me talk about it in a thin text arena which our subcommittee would not have jurisdiction and not have chairman crepo thinker stepping on his toes based on the conversations weve had. Nontraditional Financial Service providers have grown significantly in past years, as americans have increasingly used mobile devices for banking, for investing, for Borrowing Services and many of those Financial Technology companies aggregate significant amounts of data from Bank Websites after being given authorization by the bank customer, by the consumer. Given the rise of Third Party Access to the sensitive Consumer Financial information, data privacy and security is become even more important and a topic that we need to deal with. Section 1033 of the dodd frank act ensures that consumers have access to and the ability to leverage data in their records subjected to rules by the cfpb and on july the 24th, the cfpb announced plans to issue an advanced notice of proposed rule making relating to consumer access records. What are the goals of the cfpb in this rulemaking process . What are the specific data privacy risks that are posed that youre attempting to address . And what voluntary actions have you done to make sure consumer data is protected. Thank you, senator. Section 1033 as congress anticipated an issue in this area did note that consumers should have the ability to authorize access to their own Financial Data and there has been quite a bit of activity in this space as you noted with tech providers being engaged in it. Congress anticipating rule making, i would say the bureau has issued principals in the past that remain true today. Certainly allowing consumers to provide that permission. But there security and cybersecurity implications and privacy implications for some of the data as well as proprietary issues that some of the Financial Service providers have with what data is accessed and certainly what data aggregators could do when they access it. And we had a symposium this year where we pulled together experts, i was impressed with the conversation because we were able to in just a few hours encapsulate a lot of the different dynamics happening in this space. But it is clear at least to the bureau at this point that we want to move forward in a way that is slightly more formal with that advanced notice of proposed rule making to get some more fidelity over whether we should do a rule making. It is a challenging area. Again, the principle that consumers should control their oeb data is clear, but precisely what that means, if the kpurs are providing their credentials to their bank and their Bank Information to a third party and what that means in terms of the banks ability to fulfill their responsibilities to protect that data. So those are some of the dynamics that are at play here. But i think it is clear that Consumers Want to share their data, they like the services that a lot of the fin tech providers are providing them and the cfpb was told by congress engage in this space and so there is an opportunity for us to continue to move forward to make sure that it is operating the way it should. I would say, just with respect to industry action, there has been progress on rather than screen scraping that data away, using api to get to that data. And so we are again following that dynamic as well in the market. I cant see the clock, so im going to just follow up. What your answer suggests so me is this is very early in the process . In what youre going to develop . Im sorry, senator is what im going to develop what i take from your answer is that the cfpb is just beginning the process to determine what its rules might be. Yes. And therefore there is nothing that you could announce as where youre headed. It is not that specific or that known. Thats correct. Other than the principals that the cfpb issued several years ago remain the principles at play here. Thank you. Thank you. Senator warner. Thank you. It is good to see you, albeit remotely. You and i have spoken a couple of times on the cfpb proposed changes to the ability to repay and the qm rule and i do appreciate your engagement with me on this issue. Because i really think the bureau needs to work to make changes that will help increase access to borrowers of color and particularly gig workers who i think have been disproportionately challenged in a variety of rule makings. We know that consumer groups have said that efforts to make a hard dti and appendix q, while adding a cap would benefit consumers while maintaining appropriate loan quality. I actually think, again, eliminating the strict bti cap would particularly help those low income borrowers, gig workers in particular, have a difficulty at times in documenting their earnings. Under the current rule, lets f face it, have been excluded from getting mortgages and i think those folks are suffering right now in the midst of a pandemic. So ive got a couple of questions about where i hope were headed. While the rule that you proposed appropriately proposes moving away from the hard pti cap for qm. Now i would hope that the bureau still plans to maintain the responsibility on lenders to consider and verify debt and income borrowers, is that correct . Can you speak to that. Yes, senator. And that is in title 14. So that is statutory. And the little bit of devil in the details as to what that means as you noted for selfemployed people and gig workers but the requirement to consider debt and income is essential. And to be clear, while youre going through this proposal on a final, cfpb isnt planning on eliminating any of the other Consumer Protections that are part of qualified mortgages, including provisions that bar interest only loans or those with excessive balloon payments, those have estimated to hit about half of the foreclosures during the financial crisis. So youre not going to move away from these Consumer Protections in your final rule, are you . Again, statutory precluded features in qualified mortgages would continue. How are we going to make sure, again, on a more generalized basis, youre going to make sure that responsible credit is available, particularly for the low income communities and, again, particular interest of mine and i see senator shot on the line as well, of gig workers. Senator, i think it comes down to and this is a conversation were very interested in getting comments on. What verification and consideration of debt and income look like. What standards the stakeholders could come together on. Definitely encouraging industry and consumer advocates to come together in some kind of Stakeholder Group to develop standards that would get to the issues that youre raising. We havent had enough time to do that ourselves and i dont know that the bureau should do that. I think there is an opportunity here for other standards. Also rely on the other federal standards, in addition to asking for comment on whether fannie and freddie standards should be considered asable under the rule as well. So that is where this really comes in play. But as you noted appendix q was fairly limit and strict and it did if it were to be applied more broadly would affect gig workers and selfemployed folks severely. Well we want to work with you on getting rid of the cap and working on appenda q but not at the sacrifice of the Consumer Protection. I have one more question. Weve seen a huge uptick, i think, kriincreased by 86 of complaints about credit reporting agencies. And matter of fact, in march i sent a letter to the big three credit reporting agencies and you guys urging you to make sure that consumers that have been disproportionately hurt by the coronavirus dont have permanent marring of their credit. Unfortunately, one of the few actions cfpb has taken, is simply to give the Credit Bureaus more time to pursue these actions. So i really hope we could expect more. Weve seen this uptick in negative comments. I think we need to make sure that we dont bar people permanently for their credit during the coronavirus and i know our time has expired. But this is an issue that i want to come back and visit with you in great detail. It is terribly important. Senator, it is incredibly important. So thank you. Thank you, mr. Chairman. Thank you. Senator kennedy . Thank you, mr. Chairman. Miss kraninger, good morning. Can you hear me okay . I can. How many entities do you regulate . Many thousands. It depends on whether were talking about the regulations we issue, the entities that we examine directly. All of them. Thousands upon thousands. What percentage of them do you think are honest . Senator, that is a tough one to put a number on. I think it probably getting to how many people you generally think are honest in those you associate with and those in the world generally. I think there are many who are and there are some who are not. How many of them intentionally abuse consumers . Id say, senator, unfortunately more than wed like there to be. Well is it most of them . I certainly do not believe that, no, sir. Is it 40 . Again, i would hesitate to put a number on this specifically and that is why i said more than wed like there to be because clearly there are some. And some of the challenges in sorting out who are intentionally seeking to do that, and those who make mistakes and those who are absolutely complying with the law. So that is our job to sort that out. Has anybody ever checked . In terms of checking compliance across, we certainly are doing our best to tackle that in a layered approach way. We have continued to im not interested in a layered approach. Im interested in whether any academic or otherwise, or the agency, have ever assessed what percentage of the entities you regulate intentionally abuse consumers. Im not aware of anything, senator, in terms of an actual analysis of that. It may very well exist. But im not aware of it. How much money did your agency spend last year . Roughly about 500 million for our own activities. All the rules and regulations and actions that your agency takes, whats the cost of that on our economy . Well, senator, again, i dont know that there is a full analysis of the cost on that. Much less the benefit of Consumer Protections. Its a fair question. But i think there is a little bit of cost and benefit there as well. Well, if you were in the private sector, and you went to your bank and asked to borrow half a billion dollars, i think they would ask you what for . And you would tell them. And they would ask or question that in effect would be what are your costs an benefits . We havent done that for your agency . Not specifically in those terms, sir. I certainly would concede that in the wake of the financial crisis there was a certainly a conclusion that Consumer Protection needed to be done by so that consolidation let me ask you one last question, madam director, because im about to run out of time, how does the United States of america and its businesses rank against the other economies throughout the world in terms of honesty and consumer abuse, in your opinion . Senator, i really have not done a good comparative across the world. But i would certainly say that we have a robust set of laws and regulations intended to protect consumers and promote that fair i know that. But how do we rank with other countries . This is my final comment. It looks to me like were flying blind here. That is all i have, mr. Chairman. Thank you. Senator warren. Thank you, mr. Chairman. So in 2008 when the bottom fell out of the economy and people were cheated on mortgages and credit cards and auto loans and other Financial Products there was no cop on the beat to protect them. And that is why ten years ago last week president obama created the Consumer Financial Protection Bureau to protect consumers from abuse of Financial Products so now here were in the middle of another financial crisis caused by a Global Pandemic and now more than any time since the last crisis consumers need strong leadership at cfpb. Now, one of the ways that the cfpb monitors problems is through its Consumer Complaint hotline. Director kraninger, down how much the volume of Consumer Complaints that the bureau receives every month has increased since this pandemic started . It is close to 30. As i noted in the opening, march, april, may, all did set records in terms of how many complaints weve received in an individual month. And i looked at your numbers and thought it was 50 . And those are the highest monthly complaints ever in the bureaus history. So lets talk about what they show. Today the biggest category of covid related complaints to the cfpb are coming from people struggling to pay their mortgages. Its the cfpbs job to ensure that the companies that handle mortgages are following the law so families dont end up in foreclosure when the law said they shouldnt. So over 9 Million People lost their homes to foreclosure during the last crisis and now we have rules to guard against those foirreclosures but you te servicers that so long as they act, quote, in good faith, the bureau wont step in if they break the law. Director, could you give me other examples of when Law Enforcement says, for example, to a thief, that as long as you claim youre in good faith, youre not going to be held responsible when you break the law. Senator, if i could, the number of mortgage complaints were early in that process in march and april and i think theyre a great example of the bureau responding to that and working with our federal partners to well, i i would just like an answer to my question. Could you give me another example in law when enforcement steps in and says as long as you guys are in good faith, were not going to enforce the law. Thats not what our guidance said. It says the compliance with the law is critical. However you know well the discretion that all Law Enforcement entities have with respect to the cases they take on and where they spend their energy. So the ability to let me just stop you right there. Actually, the guidance specifically said that the rules written into law, will not be enforced so long as the mortgage servicer claims that it is in good faith and im just asking because i know of nowhere else that guidances like that are put out. If congress had wanted to write into law a good faith exception, we certainly would have done that. But we didnt do it. Not enforcing the law has a real impact and in the two months since you handed out a getoutofjailfree card to every mortgage servicer, Consumer Complaints related to foreclosures have gone up, not down. The bureau even acknowledged this in latest bulletin it put out this month, to summarize the coronavirus compliance complaint. So lets move on to credit reporting. Errors on individuals credit reports could cost consumers thousands of dollars, hurt their scores for years to come. People are under a lot of financial pressure right now so lets take a look at what youve done. You told the Credit Reporting Companies that they didnt need to bother complying with the law when a consumer disputes something on a credit report. So, why do you think your job is to write the rules to allow Credit Reporting Companies to break the law . Senator, i would say that is false. The point of fact with respect to dispute resolution is that it needs to be done but it is difficult to resolve a dispute if, for example, the merchant, the Small Business that could be subject of this is actually closed and the Credit Reporting Agency cant reach them. So we still that is a good faith example comes into play director kraninger, i read what you actually put out and what you put out said youre not going to enforce the 30 or 45day deadlines that are written into law under the fair credit reporting act so long as the credit reporting agencies are making a good faith effort. For me, you didnt limit it to Small Businesses, you didnt say well take one off advice on when we think someone is in good faith and you just sent it out there across the board and to me that is an invitation to break the law. And it matters. Because when we know now there is an 86 increase in the complaints about credit reporting since the pandemic started. Your own data shows that since you put out this guidance, complaints have continued to go up, not down. So lets recap. Youre getting more and more complaints from desperate consumers but instead of using the bureaus full authorities to enforce the law, you just told companies youre going to help them when they cheat consumers and the same companies have no problem screwing over consumers during the last financial crisis. Look, there is no doubt that consumers are in a better position because the cfpb is out there and im grateful to the employees who do this every day. But youre leadership has been a miserable failure based on your actions on this pandemic. You should resign. Senator scott. I hope youre doing well, director kraninger, thanks for being with us today. I have a couple of questions as it related to Home Ownership and it is important to recognize that as many people pursue the american dream, apart and parcel of acleaving that dream is Home Ownership and so we could build wealth in homes throughout this country and families and in family assistance throughout the country. So i think it is really important for us to maintain the strong focus on Home Ownership. One of the questions that i have, i know there is a proposal for us to go as they call the dti, the debt to income ratio, the 43 to more of a pricing model. So my question for you is, can you explain the rationale leaving the safe harbor at the 150 basity points because that might actually make it more challenging for some folks to become homeowners if we go from the debt to income of 43 to a pricing model. Thank you, senator. Certainly the intent and it is a rule making out for comment, but the intention is to address many of the issues in the original atrqm rule that didnt bear out. The patch had a distortion effect because 43 dti was not a hard and fast cap for the gses and roughly a third of the loans backed in 2018 had dtis that were higher than 43 and that data is nur rule making. So looking at that and understanding that the intent here is that pricing is more holistic, it is not just debt to income ratio alone but other factors that might allow particularly minority borrowers to come into the system again if we could demonstrate the ability to repay and theyre getting loans that are meeting the qm features in the statute. So i think there is an opportunity here to look at all of that. But we are taking your point on the 200 basis points against the presumption standards. The thresholds for safe harbor and prebuttable presumption are the current thresholds but it is something were taking comment and thinking about how this all works together. But the intent is to balance that. Congress clearly told us the ability to repay is critical. So were balancing that against making sure that we could continue to enable Home Ownership, particularly for other for minority communities in particular. Yeah, i would agree with you. I think we should do all that we can for credit worthy borrows to become homeowners. I think harmonizing the qm and the safe harbor might make it easier for Financial Institutions to not go to the default position of the safe harbor that is 50 points lower. Let me hop to another question as my time starts to seep away so quickly during these hearings. So, i know our friends in the house so to speak passed a heroes act and part of the heroes act is this notion of suppressing bad debt during the pandemic. And it is hard to argue that would you not want to give some leeway, some flexibility to borrowers to catch up, hence the 120 day provision afterwards. Here is my question to you. And youll have to work with me as i dont say it as artfully as i like to. If we suppress bad debt, especially indefinitely after the pandemic is over, dont we start distorting the market and if we distort the market, doesnt that make it harder for the Decision Makers at institutions to make good, sound judgment, and if that happens, wouldnt many creditors decide to pull back, away from extending credit, as opposed to leaning into credit worthy folks because there is clarity in the market place. Am i missing that point or not . Youre raising a very important point. Because that is why accuracy is so important in the law with respect to the credit reporting system. But we are to your point making at least some accommodations. For example in the qm notice proposed rule making we asked for comment how income and debt during this time period should be treated and how we could think about that. So i think there are perhaps other ways to get at this than reducing the accuracy and the credit reporting system. But i would also note, obviously any Action Congress takes on this that becomes law will be something that we would enforce. Let me use my final 20 seconds to say this. I hope that the cfpb will commit to ensuring that absent any congressional action, they will administer no rule that requires credit Market Participants to suppress or delete credit data. That will make it harder for credit worthy borrowers, not easier in the long run. Thank you so much. Thank you. Senator shots. Thank you, director kraninger, for being here. Credit reporting agencies under the c. A. R. E. S. Act are supposed to report consumers as current if they receive any accommodation under the c. A. R. E. S. Act. What is the cfpb doing to make sure that actually happens . So, senator, weve actually worked very closely with the big National Credit reporting agencies as well as with furnishers so weve had a number of webinars, weve worked with them on the direction they send out to furnishers, you know well there are thousands of entities across the country that furnish data so trying to make sure they understand what current means is important. So we have worked so you do some sort of i mean you have to do this education process with furnishers an the agency. What happens if there is noncompliance, and someone who received an accommodation under the c. A. R. E. S. Act and is reported as not current and an error, then they go to the cfpb and complain and how do you dispose of that complaint . We have a good example in the student loan space because there were also other provisions related to Student Loans in the c. A. R. E. S. Act. There was a student loan servicer reporting information affecting Credit Scores that was immediately seen by a number of students and other borrowers who submitted complaints and we heard from stake homelanders in the market saying what is going on with this. It was with respect to one particular scoring mechanism. We intervened quickly with the department of education, anifigd out what was going and it was cleared on the front end and it was the the model. So does this worry you as sort of a global problem, do you think youve got do you think that this is no longer occurring except in individual instances or do you think you need to continue . Because im all for getting the word out. But i do think that that is fine but you need a stick. And just educating the furnishers may not be enough. So do i have your commitment to lay eyes on this problem from the perspective of being an Enforcement Agency as well as Everything Else that you do . Senator, i give you one quick example, too, it our assessments were sending examiners in to furnishers and we have a constant presence at the ncra to look at this. Great. The c. A. R. E. S. Act established a National Eviction moratorium spanning multiple agencies and it also prohibits fees and penalties for missed payments during that time. You have the same problem here, small landlords who may not exactly know what their tenants rights are or big landlords who want to systematically ignore the c. A. R. E. S. Act for their own financial reasons. So here is the question. Are you collecting any data on eviction actions taken, are you collecting any data on penalties assessed so you could not just you and i could characterize the scale of this problem as a percentage of the whole, but were just supporting how big this problem is. Do you have your arms around this in terms of actual data. Going back to what senator kennedy said and kennedy said, his question was unanswerable. This is not an unanswerable question. Are you collecting data on the extent of compliance with this sort of pillar of what the c. A. R. E. S. Act was all about, which is everybody is supposed to get a little bit of officially speaking, forebaerns, b but also a little bit of kindness and room. And the room i see you providing is to the big boys, the credit reporting agent sis, to the lendors. Im wondering to what extent are you aggressively collecting data on the legislative intent of the c. A. R. E. S. Act originally, which is youve got to give regular people a little bit of room and not just assume that the big boys are complying with the statute. Are you collecting the data necessary to ensure compliance . Let me quickly answer you on that. There was not an enforcement mechanism for any federal agency, and this is outside of the purview in terms of Data Collection or enforcement on that. What we have done is make sure with education efforts, again, making sure that state attorneys general are all right. You go through this education process, im all for that. I think that is part of that. But its not that you just because the c. A. R. E. S. Act didnt direct the cfp to collect data that you were prohibited of collecting data. Thats a statutory mandate of the agency. You dont need specific instructions from the c. A. R. E. S. Act to protect mortgage holders and renters. Thats your job. Thank you. Senator cotton . Thank you, mr. Chairman. My office has been in touch with your bureau about encouraging transparency. We spoke about that in march. You said the bureau was going to be implementing new Feedback Mechanism to allow Financial Institutions to provide feedback on their exams and bring problems to the agencys attention. At the time in march, you predicted the new process would be implemented in roughly two to three months. I, of course, understand the pandemic might have delayed this procedure from starting as quickly as you would have expected. But please give me an updated timeline on what this Feedback Mechanism will be implemented . Yes, senator. It is certainly my hope that we can do that in the fall. Part of the dynamic is that we need to have the traditional exams in place to facilitate that. And our ombudsman is very dedicated to working within the industry to understand their challenges and what they would like that Feedback Mechanism to look like. She has very robust processes and she has a measure of independence. But this is something that we are committed to doing. I think its an excellent idea. Can you be a little more specific from september 20th to december 20th roughly . I agree. As i said, the ombudsman measure of independence, she didnt even want me to say the fall. I fully believe we should be able to do it in that time frame, and well get you some more specificity of activities shes jumundertaking to make th happen. Thank you. You do agree that there are problems with say the use of guidance, if everyone involved knew the exam, the Financial Institution had a chance to fill out a survey with specific questions like was the guidance used appropriately, was it used inappropriately . I think its an important mechanism to get this feedback. I do think the examiners have clear guidance and are following about the use in her application of guidance that would be inappropriate. Were there to assure compliance with the law, which includes regulations, but not guidance. And thats because i mean, most people tend to behave somewhat differently if they know that theres going to be transparency and accountability for their actions, as opposed to if there is no transparency, no accountability. Would you agree with that . I would like to think people generally would comply with the law in general because they need to. But yes, i would say thats one principle of examination. We send the examiners in, expecting institutions to comply and that will foster greater compliance because they know theyre being watched. Similarly to your point, the fact that there could be feedback on the examiners activity should have a similar effect. Has the bureau given any thought to allowing institutions to record their interactions with regulators . Senator, no one has raised that with me in the past. I suppose so i this is a new one. At least for me. Okay. And how do you assess the performance of your examiners and whether or not theyre behaving and acting properly and performing their job in accordance with law and regulations and your ek pextations of professionalism . Is there any kind of Rating System for examiners the way say the military will provide annual performance reviews and senior commanders can only write so many so high and so many so low . We have a performance system at the bureau that is really pass fail at this point in time. But that doesnt mean we dont value the feedback that we provide. Weve got a good field manager structure in place. We have liaisons to institutions that are separate from the exam team. So there is that opportunity to try to get feedback. I think the mechanism weve been talking about of doing surveys, post exam surveys, it will be another mechanism to get that good feedback. But i would say our training regime, as well as our commissioning process of trying to continue to build the skills and capabilities of the examination forces is important, too. Thank you very much for your answers, doctor. Director grabbing igraninger. Ive give you a doctorate if you want one. Director, thanks for being here and thanks for the report that you provide to the congress, as well. So since december of 2018, when you arrived at the bureau, it looks like there have been 39 Enforcement Actions, which include multiple companies and individuals that you have taken, thats about right . I think thats right. Okay. And this is what you and i have talked about and continue to talk about, because this is a concern of mine. I noted a number of these cases resulted in suspended judgments. Meaning that particularly as i look at the Debt Collection companies along with auto title and travel companies, they paid much smaller fines than was agreed to in the original judgment. Let me give an example. In florida, a Debt Collection company was charged illegal fees to 7,300 customers. And to resolve the case, which went to court, the company was ordered to pay a 3. 8 million judgment. However, the bureau suspended that nearly 4 million judgment, and required the company to pay only 5,000 and the two Business Owners to pay only 7,000 and 10,000 respectively. So i guess not i guess, i know. My question to you is why was 99 of the fine suspended if the bureau found that customers, 7,300 of them, were illegally overcharged 4 million, but those responsible only pay 23,000 . Senator, i do greatly respect your interest in this issue, and its an important one for how we carry out our enforcement tool. I think you know well too that t the settling some of these judgments is something that does happen frequently in the Law Enforcement context in trying to get to resolution, particularly when its determined as is part of our statutory process for mitigating factors, if the entity does not have the, you know, resources to pay. So thats what you looked for in this particular case as to whether this payday lender had the ability to pay the judgment . Senator, i dont want to stipulate anything with that particular case in mind. We can come back to you on it, if theres anything more that needs to be said or could be said there. But generally speaking, yes, that is a significant part of it. Its the estimation of how much time we want to spend, continuing to litigate, which of course is our resources and how much effort there would be to go after funds. So making that determination, do you get an official document from them, do you get a sworn affidavit verifying by that company that they dont have the ability to pay, is that how it works . Its a conversation between the enforcement attorneys and the other parties. So, again, depending on where the case is or what case, i dont want to hold myself to that particular case, but it is a career staff conversation that generally im not involved in. So can i ask you this . How do the customers get redress . If the companies, the bad players, the 4 million judgment is not followed through, how do customers get redress then . In many cases, thats why were charging a civil money penalty of a dollar, which does get some attention or of a a lesser amount so that they can access the Civil Money Penalty Fund that we have at the bureau. So that is a means by which at least again, i dont want to specify this case, but in cases generally, that we continue to get redress for consumers we can identify. So do you see the hypocrisy here. You have bad paris in the payday lending. You determine whether they have the ability to pay their judgments and then you bail them out by using the civil monetary fund. But then the borrower or the payday lender, we dont look at their ability to pay. And theres predatory lenders out there. Do you see the hypocrisy out there . Youre looking out for big corporations and bailing them out with this civil monetary penalty fund, but when it comes to the borrower, youre saying they dont have to look at their ability to pay. Its hypocritical. That is the concern you see from my colleagues, and why were talking about why are all these bad players getting away with taking advantage of consumers and the consumers are not being protected . I know my time is up. Ill submit the rest of my questions for the record. Thank you, mr. Chairman. Thank you, senator. Senator van holland . Thank you, mr. Chairman. I just want to pick up where my colleague, senator cortez, left off with respect to the payday lending rule. You provided this big payday to payday lenders at the extense of consumers. I think its about a 7 billion payday for those that make loans, knowing that the people who are receiving the loans cant repay them. And then coming after them. And its bad at any time, but especially egregious at a moment when so many families are struggling to make ends meet. So this has been a conversation you and i and others have had since the beginning of this administration, really, really outrageous that this rule was finalized and consumers will be badly hurt. Let me really turn to the flip side of that, which is the Debt Collection part, because many of these people who received predatory loans or victims of predatory lending end up on the Debt Collection end of this spectrum. I understand that youre working on a Debt Collection rule that im also worried will undermine the rights of consumers. But were in the middle of a pandemic. Many people are out of work, hard to pay their bills. Senator murphy and i just introduced a bill in the senate yesterday that says that during this pandemic, a Hospital Systems and Major Medical providers that are receiving hundreds of millions of dollars in taxpayer assistance to do important work. But they shouldnt be turning around during this pandemic and garnishing peoples wages or medical debt. Have you considered issuing any emergency protections against collection of practices like garnishment of wages or seizing Bank Accounts for the collection of medical debt during this pandemic . Senator, we have given very clear direction as the financial regulators, this is with the prudential regulators, that accommodation of their customers of consumers and borrowers at this time is paramount. That is balanced by safety and soundness considerations and the continued compliance with Consumer Protection law. But that is the requirement at play that we provided in terms of direction. And i would also note on the rule making that were engaged in, the continued enforcement of abusive activities around Debt Collection continues to be the case. So thats something thats been established by courts. So the more abusive activities or i should say unfair and deceptive activities and constant harassing phone calls or otherwise contacts, that is still precluded and will be. So my understanding, and correct me if im wrong, at least the current drafts of this rule would actually make it easier for debt collectors to sort of harass people via things like Text Messages and instant messages, is that true . Not harassing contact, because that again continues to be precluded. What were trying to at least afford is clarity around how consumers can be contacted, and letting consumers frankly dictate how they would like to be contacted. There are a measure of consumers who would prefer a text to a phone call or prefer an email to a phone call. So its using the contact mechanism that the consumer used with their creditor before that were trying to provide some clarity around. No final decision has been made on what this threshold is. Its very much something that weve had a lot of comments on, which i welcome. And so were poring through those comments. All right. As you said, if the purpose is to prevent harassment, people can be harassed via text message as well as they can by phone calls. Let me just close. I just have a few seconds left, asking you to get back to us on the issue of zombie debt, debt where its past the statute of limitations, but my understanding is the way the current rule is shaping up, you would open the door for people coming after debtors for zombie debt. So if you could get back to me on that issue, its something that were following closely. Senator johns . Thank you, mr. Chairman. Thank you, director graninger for being with us today. I appreciate it. I know there are been a number of my colleagues that ask about the payday lending situation here and the payday lending rule. But its so important to my state. And i know youve got a lot of other things on your plate as director. But that is just so important. I dont want to let it go. In alabama, there are more payday and title lenders in my state, than weve got hospitals, high schools, movie theaters, county courthouses combined. That is a significant number. They can charge up to 456 apr and alabamaens paying 100 million in fees to these payday lenders just last year. Even before the coronavirus, threefourths of American Workers were living paycheck to paycheck with little or no savings. So i want to pick up where we left off in march about the ability to repay, which has now been removed from your rule. When i asked about that in march, you said senator, in fairness, this is a proposed rescinding of the underwriting provision on that and its an ongoing rule making process. The rule was finalized july 7, as you know. So i would like to give you this answer, to give a fulsome response as to show that payday lending rule, that does not include a review of the ability to pay is going to affect the 200,000 people in alabama that now get these payday loans and how it will not keep them from spiraling into a financial death spiral. Senator, thank you for that. I know youre interested and i will tell you we continue to supervise and enforce, particularly udep requirements against payday lenders. Because there are bad actors in this market, as there are in every market. So thats the important action that well continue, has continued and has affected Enforcement Actions that relate to activity in alabama. And entities in alabama. But with respect to the rule, the mandatory underwriting provisions were particularly onerous. The access to small dollar products in general is something that consumers clearly have demonstrated and need a demand for. So were trying to promote competition in this space, make it clear that we want banks and Credit Unions to be offering small dollar credit options to consumers so they have the ability to access those types of products in a responsible way. And also that consumers understand the tradeoffs of the products that are available to them in the marketplace. So we are engaging in disclosure testing around this. I would say a lot of the research that is in the full rule making record demonstrates there are a number of consumers who do understand their engagement with payday products. Heres whats coming up live today on cspan3. The Senate Armed Services commitly will hold a hearing on recommendations from the cyberspace commission, which is developing a strategy to defend the u. S. From cyber attacks. And the Spacex Dragon crew will be talking to reporters about their recent space mission. Watch live coverage at 4 30 eastern on cspan3 and online at csp cspan. Org or listen live with the radio app. Weeknights this month, were featuring American History tv programs as a preview of whats available every weekend on cspan3. Tonight at 8 00 p. M. Eastern, a Police Training film from 1964 on how to handle protests and civil disturbances, including techniques for mob control and the use of tear gas and batons. Federal laboratories, ink, who funded the film, was the manufacturer of a popular riot gun used to fire gas canisters. Watch real america, Police Training films tonight beginning at 8 00 p. M. Eastern. Enjoy American History tv this week and every weekend on cspan3. Next, a virtual discussion on current u. S. Strategy in the indopacific region. We heard about u. S. Relations with china and india, the impact of covid19 in those countries, and u. S. Troop withdrawal from germany. Held during a virtual discussion by the center for strategic and international