Attention to that and done a better job. And if we havent made real discernible progress in that the next several years thenly be disappointed in myself and in the bureau . Very short answer to this one, is there a political future for Richard Cordray . Which would consider running for an Elective Office in ohio . Its not a political job. I understand its a job done in a political con teblings but its a federal context, but its a federal job and thats how i see it. You can send more questions morningmoney if you have something in mind get it ready in the next few minutes. One good question that came in how does this cfpb choose the market and which authority . How do you pick in the nonbank area what you focus on and which tools you use . I think your question there just illustrated there are a lot of choices to be made in terms of how to prioritize our resources and our work. How do you pick in the nonbank area what you focus on and which tools you use . I think your question there just illustrated there are a lot of choices to be made in terms of how to prioritize our resources and our work. And its a already a somewhat complex thing to determine what we choose to take on when and why. I think weve had a thoughtful process around that but it falls into two baskets. Some of it we dont have much choice about. Congress dictated certain portions of our agenda. If they hadnt done so we probably wouldnt have made the same choices anyway. That was the cause of the crisis. So thats understandable. It also is the largest single Consumer Financial market, some are between 10 and 13, some depending on what the evaluation of helping is at a given time. So that made a great deal of sense. Now, as we have a little more room in our agenda to figure out what we think we should be doing without being subject to specific mandates and were still under some, the mortgage rules were peculiar because we were not only mandated to d certain things but we were given a dramatic and urgent time frame for doing it. There were some things that we were required to do they dont necessarily have a time frame. We have more room on our agenda, the Debt Collection, rulemaking that we began on yesterday that may well the lead big changes in the Debt Collection market. Thats a discretionary priority that we think is appropriate and were putting fair amount of resources into that. What we try to do is what i think any of you would try to do if you were trying to make similar choices. We try to think about what is the risk to consumers. What is the scope of the market . What is the extent of consumeder harm . All of those things help guide us in terms of directing resources and thats true not only bureauwide but also within each division. We risk our examinations. We try to prioritize our role making and then as you say on a bureau wide basis we have to make choices among those as well. Auto Lending Initiative would fit into this as well. Tell me a little bit of what you doing there in terms of trying to prevent discrimination in auto lending and particularly on the Interest Rates that people pay on their auto loans. Give us an insight into your approach on this issue. So thats exactly what we want to do. We want to make sure that auto lending programs whether theyre direct loan programs or indirect lending programs do not result in a discrimination against individual consumers. You know, next to a house and frakly for many people are not homeowners even more so than their housing their car becomes a critical element of their life. Its how to get back and forth to work depending on where you live unless youre in d. C. With great public transportation. You may very well be entirely dependent on having a car in order to be able to function and we want to be sure that a consumer who goes into that marketplace is not ending up paying more to borrow, to buy a car based on the color of their skin or their ethnic background. Thats pretty much a fundamental american principle that we all can agree on how to implement that, what the risks are and what actions need to be taken to minimize those risk appropriately is a much harder set of questions and thats what were trying to work through in the moment. Did you find that this was a significant problem that people are being discriminated against and getting higher Interest Rates that they shounlt otherwise get . So i want to be a little careful because its enormous not to speak into too much detail any kind of investigation or examination of this kind. But we have seen indications that convinced there are concerns in this area. And theyre not just similar where the concerns that people saw in the Mortgage Market with the premium and other practices that have resulted in a number of discrimination actions that suggest department and the other banking agencies have pursued in the Mortgage Market. I want to open to audience questions. Folks have question first richard. I think weve got microphones somewhere in the room. Well start up over here. Are there microphones . I could probably hear them. Can you talk a little bit about how you evaluate Credit Availability vs. Regulations . And could you do an actual renewal assessment as to whether or not any action taken is constrained credit . That is in fact, one of the lessons weve learned very forcefully in working on the mortgage rules. Because the Mortgage Market interestly when doddfrank was written. And it was responding to a crisis, you know, in the economy that was caught by an overheated Mortgage Market that became pathological in various respects and a lot of very almost crazily irresponsible practices that have become, you know, very widespread. By the time we came to write the rules to implement doddfrank were now looking at a Mortgage Market that could hardly be more different. Its a market with credit that is real cri tying. This is what happened when you have a boom and a bust and a crash. Mortgage lending was pulled back significantly and what we learned from getting an exceptionally broad range of input is that access to credit is a very significant problem that were going to have to Pay Attention to here. It isnt just adding new Consumer Protections if credit is going to shrink even more. That is currently one of the big problems in the mortgage in helping markets. So that was notable to us. And i think it will inform our approach to all rules. As i said we can write the best most goldplated Consumer Protections for people that we can devise and in and of itself Everything Else being equal. Thats a good thing. But if it means that its going to dry up credit so that consumers cant actually borrow and have the opportunity that borrowing for a number of consumers mean. You know, many individuals have to borrow to get a higher education. Almost Everyone Needs to borrow to buy a house. That creates opportunity in peoples lives. If the lending isnt there to serve consumers then they cant consume. Thats a balance that i think we need to strike with all the rules. As we go forward, we are actually required with every rule we write in our statute to have a look back at least every five years, ago we certainly wont wait that long on major rules like the mortgage rules to be assessing the impact of those. If we find that the affect of the rules is turning up differently than what we expected or theres some sort of new concern that it gives rise to or that we got something wrong, i think weve shown we will not be hesitant to revisit. Were not going to stand on the fact well, we decided it and were stuck with it. What we want to know is that these markets are working well. And we did that with the remy tans rules where we fixed three significant problems that the industry pointed out to us. It delayed the rule a bit but it made it a better rule that took effect a week ago. I think it will be dramatic improvements in that market and how consumers are treated. The mortgage rules we have made a number of tweaks even after we finalized the rule particularly the tweak for small lenders that is very significant for Community Banks and credit unions. And as we go, we encourage people to bring us data on whats actually happening so were not missing thing. Its to get the market right and thats paying attention to the data and how it works. We have a question right behind here. And theres a microphone for you. Director, i think you have a very tough job and youre doing it very well. So i wanted to thank you for your public service. Everyone that provides thats good and provides Consumer Financial products or services wants good outcomes for consumers just like you do. The focus has been enforcing against bad behavior that weve seen come out of the bureau. What is the bureau thinking about or what will it be doing to encourage Good Behavior . Are you thinking about best practices or good incentives to get the right outcomes for consumers . Its a great question. Its one that we grappled with from the beginning. First of all, i appreciate your comments about the difficult of my job. Its nice that people comment on that. They were commenting on the way in that i had a big binder for today. I said some days im getting two of these and it feels like a student when you have unreasonable teachers giving you too much homework. In any event, the question you asked is something we have asked ourselves because do we really want the entirety of the bureau about being the bare minimum people limping over the threshold of complying with the law . Or what about best practices, what about the some of the things that we see that should be more widespread in the market . Thats a hard question because we dont necessarily have Legal Authority to insist on best practices. Although theres much we can do to encourage and the dialogue we have with industry which has been a very good one and a very broad one does give us some ability to influence that. But i would say this the way in which weve had some discernible impact on improving practices beyond just compliance with the law has interesting enough been our Consumer Complaints and our Consumer Complaint database. Youre starting to see a number of stories about how industry is getting the message. Theyre understanding what theyre doing. Weve been really clear about this. We paid attention to consumer Consumer Complaints. It wasnt easy to do. Some of it i thought was valid because when you have a few hundred complaints poured in there it doesnt necessarily give you a good picture. Once you go get the point where you are now weve received and handled 230,000 complaints. Its as though youre adding pixels to the picture and it becomes more fine and more precise an more accurate in terms of indicating the patterns of whats happening to consumers. Its just common sense. If you hear about a problem from two consumers its very different than if youre hearing from 200 or 200,000. It helped us prioritize our enforcement work and our rule making work. Institutions seem to be getting that message that therefore they should get out in front of this and Pay Attention as well. Thats how it becomes a great business and over time if it loses that focus it often doesnt continue to succeed. But businesss that are now paying close attention to the Consumer Complaints that they have Public Access in their own websites and being more responsive to their customers as a result, that builds excellent customer service, helping them to expand and minimize legal risks. We are strongly encouraging and applauding that wherever we see it. Thats the way in which we are pushing up the quality of whats going on in the marketplace quite apart from any particular rule or any particular enforcement action of the kind. Were about to run short of time. But i like to give folks an opportunity at the end of these things to sort of give an assessment of what they hope their legacy will be in the job that they have. When people write about the first era under Richard Cordray, what do you hope theyll say . I hope they will say we created an agency from scratch and built it into a solid agency that takes care of the basics and delivers the kind of confidence and ability that the public has a reason to expect. But second, i hope that they will be able to say that we stayed close to our compass which is how to look out for consumers in the marketplace but that over time we understood that mission in a very balance and comprehensive way which as i indicated before it includes protection First Consumers with access to consumers. I hope they will be able to say that we were good listeners and what we heard and we took broad input informed our work and made it better. But i do hope and expect theyll be able to say that we improved the market and we rooted out a number of bad practices. That got the message that they needed to be more careful and thoughtnt about how they were treating the customers and that they stepped and improved the operations and on mandating the tools. And finally that weve done some of the hard work to create a more informed consumer public in the country that can stand on its own two feet and look out for itself doesnt depend on washington to make everything i right for them but people are in position to know what they need to know, know what they need to figure out, make good choices and good decisions and therefore dont need as much protections. Good choices, sounds like what i say to my kids every day. Sounds like good advice for everybody. Youve got a binder to get back to. So well get let you get back to that. I want to thank the Peterson Foundation and everybody on the live stream and thank you to director cordray for joining us. [applause] [captions Copyright National cable satellite corp. 2013] [captioning performed by national captioning institute] monday is veterans day and they will be hosting a breakfast for veterans. Will attend a wreathlaying ceremony and the president is expected to deliver remarks. Watch live coverage beginning at 11 00 a. M. Beginning on cspan. I spent a lot of time dealing with the sec in my life. It is important that the agency make decisions and make decisions in a timely fashion. Fores nothing worse investment, innovation, job creation, all of the things that thanfrom investment businesses not knowing what the rules are. The chair is right. Moving agency like for that the liberates months on end, it creates uncertainty. Thee know, it is uncertainty of business. If there is one thing we need in the United States in terms of broadband and communications infrastructure, we need investment with dispatch, as chairman wheeler might say. Forn the challenges ahead the new fcc chair tom wheeler monday on the communicators, monday at 8 00 p. M. Eastern on cspan 2. Mrs. Kennedy is very well known as a style icon. She put an awful lot of thought into her wardrobe when she was representing the country both up the white house and while traveling abroad. She would think about what colors would mean something to the country shes about to visit. Canada,er, a visit to she chose this suit by pierre the respect of the canadian maple leaf. She knew the advantage of choosing a color for a style that would make her stand out in a crowd. Kennedy Lady Jacqueline monday night live at 9 00 p. M. Span 3. On an and c also cspan radio band c span. Org. Former New Hampshire senator judd gregg. He called for more regulation of the economy. This is about one hour. Good afternoon and welcome to the National Press club. My name is angela keane. I am reporter for Bloomberg News. We are the worlds leading professional organization for journalists committed to our professions future by hosting events such as this while fostering a free press worldwide. For more information, please visit our website at www. Press. Org. To donate, please visit press. Org\institute. I would like to welcome our speaker. Our head table includes guests of our speaker as well as working journalists who are club members. If you hear applause from the audience, i would note that members of the general public are also attending. It is not necessarily evidence of a lack of journalistic objectivity. I would also like to look at our cspan and public radio audiences. You can follow the action today on twitter using npclunch. After the speech concludes, i will have question and answer period. Now it is time to introduce our guests. Mike, a senior editor. James, washington editor of barrons magazine. Mark, staff writer at cranes investment news. Michael lindenberger, washington correspondent for the dallas morning news. Paul, Washington Bureau chief for crains chicago business. Chet, ceo of Global Private group for james financial. Allison fitzgerald, finance and Investigative Reporter at the center for Public Integrity and the chairwoman of the National Press club speakers committee. Skipping over our speaker, kasha, a u. S. Economy and treasury reporter for Bloomberg News. Molly, freelance journalist and vice chair of the National Press club freelance committee. Cheyenne hopkins, reporter for Bloomberg News covering banking legislation. [applause] our guest today is a longtime member of the republican establishment in washington, a former leader on capitol hill and a respected voice in the movement to rein in federal spending and reduce the u. S. Debt. It came as a surprise earlier this fall when former u. S. Senator judd gregg began a commentary in the hill newspaper with these words, most americans these days are simply ignoring republicans and they should. [laughter] greg was lamenting the strategy of some in his own party to threaten the Government Shutdown and default on the u. S. Debt in their effort to kill president obamas Health Care Reform law. He later called the 16 day Government Shutdown a tactical fiasco. Judd gregg came to washington for the first time in 1981 representing New Hampshire in the u. S. House for nine years. He then went back to the Granite State and as governor, he was champion of Environmental Conservation and helped preserve more than 337,000 acres of sensitive land. After four years in the statehouse house, he returned to washington to begin the first of three terms in the u. S. Senate. His political career was marked by contradictions. He was known to be a staunch fiscal conservative yet he didnt hesitate to work with democrats in congress and in the white house to push policies he believed in. During the financial panic in 2008, senator gregg was the Top Republican negotiator for a program which set aside 700 million to bailout wall street and commercial banks. Four months later, he withdrew his name from consideration to become president obamas First Commerce secretary saying he was opposed to the president s economic stimulus plan. Senator gregg left the senate in 2010 and joined with alan simpson and Michael Bloomberg to become a leader of a Bipartisan Group called six the debt. The group is urging elected officials to cut the federal deficit. As a former senator, gregg hasnt been shy about criticizing democrats and republicans alike. His columns have touched on everything from tax policy to immigration to health care. Today, senator gregg is here as ceo of the securities industry and Financial Markets association. They represent the interests of the investment industry. Its members include the securities arms of jpmorgan, citigroup and fidelity. Senator gregg is here today to discuss an initiative to ensure investor interest are protected. Please help me get a warm National Press called welcome to judd gregg. [applause] thank you very much, angela. Thank you for the opportunity to have this for him. It is very much appreciated by myself and folks elsewhere. It is a pleasure to be joined here by the team and family and our chairman and by our president. To have a chance to talk to you today. Kathy says i should begin by telling you one of our New Hampshire stories. I hesitate to do this in washington because the punchlines are very subtle. [laughter] i noticed that we have these flags here that our New Hampshire flags. I hope nobody has bitten into the flag. That would be a violation of protocol. Ken is from texas. He was a congressman of texas, an excellent member of congress and categories distinguished career. Whenever i see ken i am reminded of a story from our town in New Hampshire. We lived in greenfield which is a town of 600 people. It was a beautiful town up in the foothills. In the fall, a lot of people used to drive through the town. Down the road from us was a fellow named oscar. He was in his late 70s. He was still a farmer. He was working on his fences monday and this huge black suv pulls up with texas writes. This fellow gets out and he has this huge hat, big cowboy hat. He walks up to oscar who isnt as big and says, sir, this your farm . Yep, oscar says. He says, you lived here all your life . Oscar says, not yet. [laughter] he says, how big is your farm . Oscar says, that is a big question. He says, if you go down the road here, you will see a birch tree. Go up that little ridge there and you will find a stone wall. Then you cross that stone wall to a bunch of trees and come down there and come up here, that is my farm. He says, well i am from texas. I can get in my car and drive all day and only be halfway across my farm. Oscar says, yep, used to have a car like that myself. [laughter] [applause] applause from the press . I will tell one more story. That way i will use up all your questioning time. Mildred perkins in austin had lived in town all her life. They had gone to a Church Social and made a pie that mildred thought was a recipe. They didnt speak to each other for like 40 years. Mildred dies. Ethel goes down to the town store and oscar is down there and oscar says, ethel, did you hear that mildred died . Yep, her that. Well, ethel, are you going to go to mildreds funeral . No, she is not coming to mine and i am not going to hers. [laughter] i can go all day like this. I did want to talk today about the role of Financial Markets. Specifically, our role in helping americans succeed in main street. We take this very seriously as an industry. I think to understand where we are, you need to actually go back to the last century. A lot has carried into the second decade of this century because life is a continuum. Two things were clearly decided in the last century, the first was that democracy wins out over to totalitarianism. Democracy defeated fascism. By the end of the last century, most of the western world was democratic. People moved to democracy as a way to govern. The second thing that was decided was that free markets create a great deal more prosperity for the people than collectivist markets. As a result, free markets have become the way of the western world. America is uniquely positioned as the representative of democracy being the worlds oldest democracy after switzerland. The Financial Markets pay a Critical Role in the success of those Financial Markets. This point was made uniquely by Joseph Schiller who is an economist at yale who recently won the nobel prize for economics. He said this in his book, the essential challenge for leaders to contemplate in coming to terms with the future of finance is to understand that it can be used to help broaden the prosperity across an increasingly wide range of social classes. Imagine the development of a new laboratory, the funding of a new medical research center. The building of a new university or the construction of a new subway system. Finance provides the structure to these and other enterprises that institutions throughout society. If finance succeeds for all of us, it will help build a good society. We are not sure it will succeed. There are issues which make it a challenge and in fact, interestingly enough, it was adam smith over 200 years ago developed the concept of free market society. He said, i am paraphrasing here, he said great nations are not impoverished by their people. They are impoverished either governments acting badly. He used the term i replaced it with badly. Basically, it means governments acting inappropriately. Milton friedman said it another way. He said if you put the federal government in charge of the sahara desert, there would be a shortage of sand in five years. [laughter] the simple fact is that there are forces which negatively impact the economy. I would like to mention three of them that i think are really of concern today. The first is our federal debt and deficit. You simply cannot run a country if you run up a deficit and a debt which you cant sustain. We have double tower debt in the last five years. We will triple it by 2020. We are on a pathway which puts us in a debt situation where our debt to gdp will equal other nations who have at extraordinary problems such as greece, italy, ireland, iceland, france. We have the advantage of being the worlds strongest economy and the worlds currency and therefore we have more running room. But the simple fact is that if we continue on our present and, at some point, there is going to be a challenge to our currency. It is viability. When that challenge occurs, it will lead to either significant inflation or some other financial event which will inevitably lead to a diminishing in the standard of living of the American People. Hopefully we will see our Congress Come together to try to do something over the next few months. The second issue that we have which is a concern in my opinion, the piling on of federal regulations. We in the Financial Markets business totally support appropriate regulatory activity, embrace it, want to work with regulatory agencies to construct regulatory activity. Were getting a few more regulations than anybody expected. Every 2. 8 days, new regulations come out in the Financial Markets. We have received 15 Million Words on dodd frank. That represents 22 volumes of war and peace. We are only 39 of the way through dodd frank so we have another 20 Million Words to come. This type of excess is driven in large part by regulators. We want to take risk out of your life. We are basically going to be in charge of your life as regulations. It is a bureaucratic excess in many ways. There is no question that an appropriate regulation is needed in a market economy. But at some point, if you go too far, you end up straining that economy because the energy instead of creating Economic Activity goes to responding to the issues raised by the regulators. The third area is what i call sort of a galloping populism which we have seen. Again, at its core are folks who dont believe in market economies, free market economies especially. It is a belief that doesnt trust the ability of individuals to make decisions on their own. Rather, it says that a collective group of folks should do it in the name of a better society. It has become reflected in statements like those made by michael moore, who i am sure would not turn down the title of spokesman for the progressive left. I think he probably would be attracted to the title. He said, i dont own a single share of stock. He has made this statement outside the New York Stock Exchange during some sort of an event there. I have never owned a single share of stock. I dont support this, pointing at the New York Stock Exchange, this rigged casino. I dont know why anybody would put their hardearned money into this, the New York Stock Exchange. I would refer those folks to twitter. Today, the Twitter Company issued, i think it was 70 million shares of stock. And the interest of purchasing the stock was extraordinary. So extraordinary that the value of that stock went up dramatically from its original issue. What does that reflect . That reflects the core element of a freemarket society. People want to have the right to go out and participate with other people who are trying to create Economic Activity in businesses which they deem they feel would be successful. That is the way this economy works. To reject that is a mistake. To reject that also reflects a certain discomfort that you see among populism with the concept of free markets. I think Milton Friedman got this right. A great economist, he said, a major source of the objection to a free economy is precise and givesisely, that, it people what they want. Instead of what a particular group thinks they ought to want, underlying most arguments against the free market is a lack of belief in freedom itself. Who is harmed by that . Who is going to be harmed by a government that is not fiscally responsible . By people just going way too far in the area of dampening Economic Activity to attempt to address risks . Or by a galloping populism that rejects freemarket as a concept . What i have to tell you, it is not going to be the folks on wall street. It is going to be the folks on main street. It is main street where the jobs arent created or the opportunity doesnt exist if you dont have a vibrant economic engine driving this country. And if you have these retarding events. That is why it is our intention in a Financial Markets industry to make the case for a free market economy that is properly regulated, that has as its most basic elements individual initiatives, supported by readily available capital and reasonably priced credit. To promote the importance of the role of a vibrant Capital Market and a Financial System in the everyday lives of americans and their ability to pass on to their children a more prosperous life. We intend to essentially reconnect with the American People by reinforcing the fact that the Financial Markets basic purpose is to help the American People succeed. And to allow main street to prosper. We intend to do this by basically concentrating on four major areas. The effort will be primarily an attempt to make it clear to folks in a very personal way how important it is to their dayto day life that the Financial Markets participate in our economy in an aggressive and positive way. The job they go to probably is a function of somebody having invested capital in a business. When a person sends their kids to school, it is probably being supported by market activities which allow a loan to be made. When a person goes to an emergency room, that emergency room was probably built with bonds that came from the Financial Market. Somebody in the Financial Market took a risk on building that hospital by supporting it with bonds. When you drive down a good road or even a bad road, it was probably built by bonds where somebody took a risk in order to create that. Last year, in the last five years, business has accessed over 6. 3 trillion in capital through the Financial Markets. Bonds have been issued which have built 8 million miles of road, 1. 5 million bridges and 500,000 miles of water pipes all to the benefit of making a stronger and more prosperous society. Over 3. 3 Million People have received Small Business loans representing 178 billion of investment. These are real folks like carmine and marcus who started in their garage a Food Distribution business. Working with their Financial Advisor, they were able to expand that into a Major Business in southern california. Jill brown, when her husband died, was helped why her advisor to get back on her feet. She began a Small Business of Home Furnishings which she built into the brown Home Goods Stores in houston, texas. Stores that created jobs. Stories about real people whose lives were improved by investments made. We have done a lot of great things as a Capital Market. We even brought back the twinkie. [laughter] i guess the twinkie never went anywhere because it is not biodegradable but as a practical matter, had it gone somewhere, we brought it back. The second thing we are going to concentrate on is the lessons we have learned. We know that too big to fail should not exist. As an industry, we are committed to ending it. We have done this through basically having living wills, by having stress tests, by having resolution authority. Furthermore, the capital of the Banking Industry and the investment industry has been increased dramatically in the last five years to over 800 billion. That gives it much more safe and soundness. Safety and soundness. Even the taxpayers have benefited a fair amount on the financial industrys distress. All the money that was paid out to the financial side of the ledger has been paid back and there is a 20 billion profit for taxpayers that can be used for other things. Going forward, we intend to work for strong and effective regulations that will create transparency and make for a safer and sounder system. The third thing we are going to focus on is education. We believe firmly that a well educated population is going to be a population which can more effectively succeed and prosper. We are going to talk about the importance of capitalism, market, entrepreneurship, profit. Were going to talk about Financial Literacy and how people should invest and how they can invest to make and prepare for their future. How they can deal with their Retirement Savings or their investments coming through their pension funds. In a way that communicates and touches folks in their dayto day lives. We are not going to do this in washington or from new york. Do it with the local rotary clubs, the local boys and girls clubs, the school systems. Basically, one on one, talk about the importance of the financial industry in the day today lives of the people. We work with them to try to help them succeed. That is the most important initiative. We put our customers first. Our commitment to protect our customers right to choice, our commitment to protect our customers savings whether they are being used for investment or retirement. In that role and is part of that effort, a lot of energy has been put into this. We have created a document called, our partnership with you. This is a statement of rights that our customers have and should have. This was not written up by one or two folks sitting down one afternoon. John and his group worked with hundreds, actually thousands of members of the industry to try to make this work, come together with this partnership with people who were committed and bought into it in a way that made it clear that we do put our customers first. Let me read a few of the points in this. I have to put on my glasses to do this assuming i brought them. Ok, i am all set. I buy these at reagan airport, by the way. It is the best place to buy your glasses. 12 for five dollars. [laughter] let me just read from this. As an investor, you have to be committed to providing Educational Resources to better understand the products and services you are investing in and how they work to help you achieve your objectives. It is about the consumer. Our industry continues to embrace the implementation of high standards for interacting with our individual clients including putting the client best interest first one we clients best interest first, when we provide personalized investment advice. Our customers have the right to work with an investment professional of their choosing who will help them clarify their investment goals and help them achieve their stated objectives. They have the right to receive personalized investors advice. To be informed of conflict of interest, to receive reliable information from their financial assistant and to be presented with reasonable investment alternatives. They have the right to receive clear and accurate descriptions of other transactions. They have a right to be informed of the fees associated with their accounts, to be clearly informed about the risks associated with individual investments, to receive accurate and timely periodic statements and to receive clear discretions of policies and practices. Descriptions of their firms policies and practices as they relate to this individual. They have the right to be treated a fair and ethical way at all times. And to receive competent and courteous advice at reasonable prices. And to choose products that are suitable for their investment goals in line with their stated risks. To be able to move their accounts if they wish to do so and to receive proper responses prompt responses from their assistant in the Investment Community. And to have clearly defined processes to resolving any issues that may arise. This is a commitment we are making to our customers because we put our customers first. Joseph again makes the point that the better a line a aligned a societys Financial Institutions are with its goals and ideals, the stronger and more successful that society will be. If its mechanisms fail, finance has the power to subvert such goals. As it did in the subprime Mortgage Market of the past decade. If it is functioning properly it has the potential to promote great levels of prosperity. This is the direction we are going to go. We are going to align our efforts with the purposes of the people who we serve and of a good society. We know that main street is the engine of the American Economy. It is the Financial Markets and the resources they bring to main street that is the fuel of the engine. This is the american advantage, that people who are willing to go out and take a risk and put their sweat equity into pursuing their dreams are able to find other people who are willing to support them with capital and credit at a reasonable price. We have this advantage as a nation and we as an industry are totally committed to it. The financial industry is going to work to be an extraordinarily strong and positive force for helping our customers pursue their dreams. We are going to work to make sure that we can help americans succeed and main street prosper. Thank you very much. [applause] thank you. Tell us, why should consumers, individual Consumers Trust the industry for advice on their protection . Well, first they should go meet their advisor. People who came up through the system get to know them. Get comfortable with them so that they develop a rapport. The advisor is there to be their assistant much like you would go to a doctor or dentist. Your Financial Advisor is there to help you out in an area where you dont have the expertise. That is the opportunity that exists for a person to go to someone who was a true professional who is committed to standards, to be on the side of the customer when the customer has questions about how to invest their money and save for their retirement. Were there any consumer advocate that helped design the program . Yes, we had a lot of consumer input on this proposal. We basically rely on our customers to tell us what they want as we develop this proposal. As part of the effort, do you have any plans to make it any more of a Consumer Organization . Do you plan to do any consumer facing work as an association . Actually, it is our members that do that. It really should be our members. We are very sensitive to any issues that are raised and if anybody wants to call me up, they can call me. As a practical matter, if a consumer has an issue that deals with how they should invest or whether investments are being handled properly, the first opportunity is to talk to their Financial Advisor. You talked about there being what you consider too much regulation of the Financial Services industry. We all lived through 2008. At that time, there was a concern that there was too much regulation back then. What is the right answer if we saw the failures of banks and mortgages than with that level of regulation . Why should there be less now . We are not talking about less. We are talking about rational. Regulation that accomplishes the purpose. First, find the purpose than try to accomplish it through regulation. Purpose, then try to accomplish it through regulation. We embrace the idea of a strong regulatory environment. It is important for transparency, integrity, having confidence in the system. There are a variety of regulations which are more than confusing and some, in our opinion are counterproductive to the basic goals of what the regulation was going to pursue. I think that we are in an atmosphere where so much energy is being put into responding to the Regulatory Regime that resources that should be going out to help the person who has got the idea that they are trying to succeed in are not being used there. They are being used in response to the Regulatory Regime. We will get through this, obviously, as a government. As we move towards resolving all the issues raised, we just have to be sensitive that we dont swing so far that we undermine the basic strength of the American Economy which is that it is a free market where people do take risks in order for it to succeed and where you basically want the Financial Sector to be properly regulated. Without overwhelming the ability of the Financial Sector to be an aggressive player in promoting opportunities for prosperity. Pointing the finger in a different direction, this questioner asks how protection can be advanced while investors themselves continually ask for high risk high return investments . I am not speaking as i dont think it is our job to tell people what risks they take and what risks they dont take. The financial industry as a whole must participate in the efforts of the government and regulators to make sure that systemic risks are muted to the fullest extent possible. Individuals in our society invest. When they invest, they take risk. If somebody wants to invest any more risky way to get a higher return, that is their right. If they want to invest in a more conservative way to protect their resources and not have any downside, that is their right to o. That is an individual choice. Back to regulations, can you give us some specifics of regulations that you think have gone too far and what are you looking to change precisely . The original proposals on the issue would have forced out of the business of giving advice a lot of the industry. The loser in that would have been the consumer because the consumer especially the consumer who doesnt have a huge 401k. They would have found themselves not being able to use advisors in order to determine how they wanted to invest their retirement funds. That is counterproductive. That would have undermined and harmed a lot of folks ability to get ready for retirement. That would be an example of one area where we think regulation simply was misdirected. It would have produced the opposite result of what we expected and what we would want as a society. Are you supportive of a house bill to delay the Labor Department rule . That is the proper approach. Dodd frank made it clear that the sec should take responsibility in this area of establishing rule. We as an industry support the concept. It should be put onward by the sec. The role here should be secondary to the sec moving forward. The sec has primary responsibility. What is the relationship of Financial Advisors to the consumer . Fiduciary relationships have all sorts of legal implications which would limit in many ways the ability of people to give advice in a constructive way or maybe even not allow it at all. It depends on how the term fiduciary is interpreted under the advice being given. For example, the dol fiduciary language would have barred people from giving effective advice to folks who wanted to use it who had smaller accounts. We have another situation like this in the area of Municipal Bonds where advisors are subjected to fiduciary role that bars them from giving the types of advice that the community might want or the bond issuer might want. They will find themselves unable to give the advice which would allow that issuer the most opportunity to get the return they want and pursue the course they want because of the limitations that are arbitrarily in the fiduciary language. A prominent blogger opined that the derivatives business is dead due to increasing regulation. Do you think that is an overstatement or are derivatives disproportionately overburdened by regulations now . I dont agree with that statement. There is still a very vibrant Derivatives Market. What youre seeing is the Derivatives Market moving to much more clarity, transparency. It is moving more into an open arena and that is the way it should evolve. There are some derivatives that dont lend themselves to that type of approach but as a practical matter, i think the Derivatives Market is adjusting to the new regulations. We werent all that comfortable with some of them but the adjustments occurred. You used the example of the twitter ipo as a way of illustrating the benefits of a free market. Of course, most of us individuals couldnt buy the twitter stock at the ipo price. How do you reconcile that disparity . You will have to ask the folks at twitter. They were the ones who chose the amount of the stock they were going to put out. It was a very narrow amount of stock they decided to issue compared to the value of the company. That was a legitimate business decision. They did not want to put the entire company into the marketplace and we can understand why. However, if you want to buy twitter stock, you can go right now and buy some twitter stock. The price will be a lot higher than what the offering originally was but that is called a market economy. You talked about capitalization of banks. Alan greenspan was here last night and talked about this topic of banks needing more capitalization. Do you think progress so far is enough . I think you need to turn to this question constantly. The regulators who were responsible on the issue of the what is the proper capital is a very legitimate question. If you require too much capital, you contract Economic Activity because money that is being used for capital cant be put out to investment or lending. There is no question, the issue of capital is at the core of a sound banking system. It should be constantly looked at. There has been huge progress on the issue of capital. The American Banking system especially is very well capitalized relative to the rest of the world. You talked about the importance of confidence in our public markets. This questioner says, the growing threat of Cyber Attacks could undermine the confidence. Is there a role for the financial industry to address Cyber Security and Information Privacy . That is a great question. We consider this one of the truly big issues that we confront as an industry. Chets firm spends a tremendous amount of time on this. Cyber attacks can be for the purposes of gaining proprietary information which can be used in criminal activity or it can be for the purpose of shutting down the industry. Disrupting the commerce of the country. The industry fully recognizes the seriousness of this and is moving in all sorts of fronts to try to address it. Let me tell you about one. Basically, we set up what amounted to we have done it twice now, a test case of a variety of attacks on the Investment Community and on the exchanges. It was called quantum gone 1. It was a very intensive exercise. It involved a tremendous number of business entities and banks and investment houses. It involved the entire relevant part of the federal government including the treasury and homeland security, the fed and other agencies