Transcripts For CSPAN2 Tonight From Washington 20130913

This is one area that we have done really well in. For the last seven years i have hosted an Energy Summit in las vegas. Governments and president and all kinds of cabinet officers there that is a bipartisan event. One of the things that we do better is recognize some of the smartest and most creative inventors in the world to show their latest discoveries. We learned about an American Company that is developing hightech batteries that has great potential. We want to store solar powered. And it looks like the cost of about a small plane. At the california border just about 2 miles from las vegas, there is a myriad of things going on out there. They have hundreds of thousands of solar panels and three very tall towers that look like skyscrapers. And it is so terrific. Once the sun goes down, it is not producing anymore, but this will no longer be the case because of the system in place. During debate heats up and at night it still produces energy after the sun goes down. And that is 90 completed, so i am constantly amazed by the bright spot during these dark economic times. But americans cannot just rely on signs and banners and break our own reliance on fossil fuels. We need to be part of the solution instead of part of the problem including reducing Energy Consumption at home and work and that is what the shaheen legislation is all about. At home we can start with small choices and we can bring home a lightbulb that is more energy efficient. We are installing your thermostat and regulate it remotely. These choices are real. But we need technology in the communities that we live in and work in. No one is concerned about, at the time that it is constructed, they want it done quickly and the airconditioning in the appliances are not as good as they could be. Much of that electricity created in america is wasted. As a boy growing up, just less than a mile from home where these massive power plants and you could hear the electricity popping. You could hear it here boulder city and think of all the electricity lost. So much that we use is wasted it is one way that we waste so much electricity. This legislation will spur the technologies the Energy Savings act will spur Energy Technologies in private homes as well as the industrial sector. All at the cost of tax payers. So i commend them for bringing this bill to the floor. I think chairman wyden and breaking member murkowski for the management of this measure and this is one of the fastest and most effective ways in our economy and it will make our country more effective and we will save consumers money by lowering energy bills. It will save American Families today 14 billion per year. And approve more than 150,000 new jobs according to some of the studies surrounding the legislation. We hope to adopt official technology and by 2030, even as a young man, 2030 will get here. This year we are taking as many as 17 million cars off the road. Technology that can be used in every state in the nation and it will pay for itself through savings and energy. The federal government also has important savings agents that we havent dealt with much in the past. The single largestpast. The single largest user of this, no one is a Bigger Customer for America Today than the federal government. It will save taxpayers lots of money. Im aware of the amendments and i have been told by senator shaheen that theyre 18 bipartisan amendments to be offered. And so i look forward to working with them in with the managers to help american businesses and reducing our nations Energy Consumption. Because of so many will come from the inventors and research, other things must be in place at the we live and work. We must talk about a great piece of legislation that does it. Even though i have worked with senator shaking, they were diverted totally from what this bill is all about. Why . Because the anarchists have taken over here in the senate. A speaker could not pass a simple see are today. They asked me yesterday, what is next, a young reporter, and he said, if you have a couple of Ideas Committee will be shot down also. Theyre in position where people who dont believe in government, that is what the tea party is all about, it is such a shame. There has not been a single amendment allowed in this legislation that has any breath of energy. The fund obamacare, and i guess that that is as the fiscal year comes to an end, that is what it is all about. We are getting rid of obamacare we will not negotiate the president of the United States says that he is not going to negotiate. And if the republicans in the house cannot pass a funding resolution, then we have this unnecessary activity here. Senator shaking and senator portman have been talking about this. So here we are. We are where we have been and what have we accomplished . Not very much, mr. President. After senator reids remarks, Mitch Mcconnell spoke about health care and said that he plans to offer an amendment to the Energy Efficiency bill that would delay implementation of the employer and individual mandates for a year. This is five minutes. I did a lot of listening over the past several weeks at meetings and events all across kentucky. Last week i participated in my 51st hospital townhall since 2011. And i will tell you that one thing kept emerging over and over. Kentuckians are really worried about obamacare. They have read the same stories about businesses cutting hours and eliminating health care and people being laid off. They have read about how the rollout of the mass of lies becoming a massive mass. And how their personal information could be compromised by scam artists. There are still some of you that support the law who are thinking, well, they will learn to like it. But it is precisely the kind of, well, we know whats good for you attitude that is so upsetting to my constituents. That is what got us into this mess in the first place. So lets at least get this much straight. The doctors and nurses come in to health care professionals, the patients and everyday kentuckians have been speaking with me on this issue. They know what they are talking about. A lot of them know more about health care she is looking at premium increases of nearly 90 there in kentucky. Premium increases of 90 . Now come i think that she summed up the situation pretty well. She wrote that government is crippling the businesses that are keeping this country going. Another constituent said its a matter of conscience and he doesnt want to let his employees go uninsured, but realistically he may no longer have a choice. One of kentuckys biggest employers recently announced plans to stop providing health care to spouses. 15,000 of its employees, also due in part due to obamacare. These are just some of the human causes of this law and it has not even fully, online yet. It is small consolation for Business Owners and they have little time to retrieve this and this mess comes up a year later. We are calling for an outright repeal and news reports suggest that a lot of harsh words were said and i dont think i can even quote all of it on the floor three quarters of its membership could be lost in just the next few years. This is the biggest support that they have calling for outright repeal. So we know that big labor is waiting on the president. And we know that we want them to rewrite the same law that they helped to ram through and hopefully they are listening. But what about everyone else . What about the single mom in bowling green, who will be able to cover rent future for our center cut didnt the administration think that those folks deserve some relief as well . This legislation is the fair thing in the and the right thing to do and its just common sense. But today i will explain how this will provide the same reprieve for individuals that the administration has already offered to businesses. I hope my colleagues on the other side will join me in supporting it as a number of democrats did in the house. I know that they all got an earful from their home last month. Maybe they considered wisdom and fairness of their ear month. Maybe they considered wisdom and fairness of their earlier position and maybe now they will think that individuals and families should be treated no differently than businesses when it comes to protecting them and obamacare. As i indicated, votes from both republicans and democrats, and there is no reason for blocking it here in the senate. We need to pass a oneyear ledet. A oneyear delay of obamacare for everyone. That is what the amendment that i have filed would do. It would put kentuckians and americans in place with something they really need. This job killing mass of a lot. And just what i intend to keep fighting for i dont care what part you are in, youre hearing from us. We have stepbystep reforms that will actually lower costs and mr. President , i yield the floor. Senate majority leader harry reid met with House Speaker john boehner on thursday to talk about funding the government. After that meeting he said House Republicans are wasting time. This is 20 minutes. This is the first time in senator schumers entire career that gives them up for a late for a press conference. [laughter] oh, really . [laughter] leader pelosi and speaker, the meeting lasted for about 45 minutes and as we all know the speaker is trying to get the governmentfunded. We can see what is going on today. There are mounds that we have talked about Energy Efficiency their direction is a direction to shutting down the government. This is not the time for political stunts on the transportation bill, not obamacare or the energy bill. We want to fix these issues that need to be fixed. Changes are going to start in just a matter of a couple weeks for the vast majority. So we have house members and the staff there working on this. We are going to be a part of the exchanges and that is what the law says and we will be part of it. We will be treated like the rest of the federal employees. It is nothing unique employers help pay for medicare. Filled mortar company, sears, fr company. It doesnt matter. It doesnt matter who you work for and the employees involved. It is hard to tell them what we are doing because we are doing nothing. The anarchists are winning. It should and that passing this and understand that this is the right thing to do. Less than half of the republicans in the senate seem to live in an alternative universe and keep the meaning possible. And if the Republican Leaders keep getting into the tea party, meeting possible demands, they must be rooting for a shutdown. And its like, give me a couple of them and we will talk about it. Thank you, senator reid. In the we call this a News Conference and unfortunately, we dont have a lot of meetings. Because what i am about to tell you has been many times over. It is a story that tells about the house, when we come and visit in washington, we cannot do the basics. With the house of representatives wont take up a budget budget resolution and we try to work out our differences. It is a story that cannot pass a farm bill. We have an atbat for two years and we have passed it twice in the senate. Its not news, its an old story, but we believe that this congress and this government can help to make this a better country for the people who live here. I sometimes sympathize, but if he wants to leave, he has to step behind the tea party faction. And if he would talk with us about the u. S. House of representatives from i believe it would pass. And i think it would pass. And he would call of the Senate Budget resolution and it would pass. And he has stopped this and it has bowed to the willful minority at the expense of this government and of this nation. The American People will finally realize that congress and we are being identified for our failures. Ive never seen anything quite like this. Who represents maybe 5 of the elector rate. Unfortunately, close to a mirnlg majority of republican primaries when theres a low turnout dictate what is going on. Hold the country by the neck, and paralyze them. The good news is, we have elections. If they scweed succeed in their platform, theyll fail the way mitt romney failed. They know theyre not going win. They know we will not repeal obamacare. We have the high ground. If we say to them, we dare you to shut down the government, unless you repeal obamacare. We dare you rip the full faith and credit of the United States until we end obamacare. Theyll lose. Thats the data limb ma Mitch Mcconnell and john boehner know this. They have this rabid group. Were making an appeal today to our republican friends. The half of the house caucus, the twothirds of the senate caucus, republicans who know this is wrong stand up and make your voices heard. As many of you did on immigration and the farm bill. I believe those people will stand up. I believe by the time we get close to funding the government and to full faith and credit, renewing full faith and credit of the United States, the more reasonable voices will prevail. But were going have to go through a lot of con have speeches and patrol until it happens. Im not sure its what Speaker Boehner had in mind. But while republicans are busy fighting among themselves, again, democrats are united. We know that the American People are sick and tired of House Republicans pandering to the tea party and pushing us from one artificial crisis to the next. So it really is time for Speaker Boehner to get serious about this. I hope he realizes that tea party is simply interested in not governing, and its time for him to work with us on a bipartisanship budget deal that works for the middle class. Democrats have been working for months to get in a room, work with republicans, and tackle our fiscal and economic challenges responsibly. But not only have republicans refused to negotiate, not only have they blocked a budget conference every time we have tried to start one, but now they are pushing us toward a government shut down in a bizarre attempt to cut off health care for 25 million people, reopen the doughnut hole, make seniors pay more for their prescriptions, and end Preventive Care for seniors and so much more we can talk about. Obamacare is the law of the land. I know, the tea party is fixated on sabotaging it before it begins to help millions of americans. But democrats are going fight for our constituents and going to make sure obamacare is implemented and implemented well. Speaker boehner clearly understands were serious about this. Thats why the cr he un unveiled earlier this week uses gimmick that the government could stay open while funding obamacare. Thats not good for the tea party. They dont want a showvote. They apt shut down. They wont be satisfied until they get one. Im disappointed that republicans have pushed us to the point where we need a cr that now that were here, they need to stop playing games. I really hope that Speaker Boehner realizes the only path forward for him and for our country is a balanced and bipartisan budget deal. I hope he realizes democrats are not delaying obamacare. We certainly arent negotiating over the debt limit, and itself insane to play partisan games with our nations economy. I hope he releases it soon before we lunch in to another completely unnecessary crisis. The tea party wont like seeing democrats and republicans working together. I will tell you the vast majority of americans want us to Work Together and want the government to function once again. All right. This is for you and all of you, actually. Im worlding after wondering after valid my putins go you feel comfortable with russia as a negotiating. And what was your reaction . I believe that in the white house said this. And im going agree with them. He wrote this. I didnt agree with it. But i think he wrote it and i think its good hes appearing in an american newspaper. Hopefully that will allow him to do work that hasnt been done in a long time to tell us the agreement. To help syria do what they need do. He has everything to protect syria and the russia. Warm water port and we understand why hes been so involved in syria. Theres no reason that russia was suffered more with chemical weapons in world war i than any other country. The 1. 2 million casualties in world war i. 440,000 gassed were russians. Theyre a country that should help theyre it. And so its not a question of not trusting him. Reagan said it all. Trust but verify. [inaudible] i dont think hes doing that. Hes looking for an excuse to show off the super bowl ring. [laughter] [inaudible] lets find out what they do. Its hard to negotiate something that doesnt exist. Leader pelosi said on more than occasion. Let us vote. Let the house of representatives vote. As senator durbin said, thats the key to get all of this done. He is really being so unfair to america to have this majority of his majority of his control no more than than 5 or 7 of the American People doing everything. Im not going to get in to whether senator murrays budget number is an appropriate one. Well deal with whatever they send us. I made the message clear, my three colleagues made the message clear. Lets go to something else. Get away from obamacare. Send us something else. That is the correct question. Thats what we should be talking about right now. What number we are willing to keep the government open at. I wish that was the number that we were sitting down and negotiating over, and not over whether theyre going to repeal obamacare, shut down the government, or do whatever else theyre going to do to create a crisis. Reporter [inaudible] what specifically did you tell him you can and cannot do i told you what i told him. Thats basically it. I said to him, what can i do to help . Because i want we had a personal discussion. We didnt go any further than that. It was not a yelling at each other meeting. It was a very nice meeting, and we had and i he listened. I like john boehner, i like him. But i know how you said, dick, you feel sorry for him but not so much. But i do. [laughter] i feel sorry for him. He has to break away from those people that are ruining the republican party, and hurting our country. Yeah . Reporter at what point in time if the house is not able to pass anything do you put a cr on the floor one of the shells and the cr over here . Well, the drop dead date is october 1st. Im sure that the house knows that we dont have anything here to mess with what tax builts they bills they have been careful not to send anything. We would have to scrounge hard to find something. You said youre willing to work with Speaker Boehner on fixing obamacare. If there are fixes that need to be made why dont democrat weve done it we have passed it. We have done it legislatively. Remember the thing with Small Businesses . We have done a lot of stuff. And of course, the white house has done it. What theyre doing is not a fix. What they want to do is repeal. And the other games theyre playing with our health care and my Staffs Health care. Reporter assuming that the House Republicans dont send over an obamacare cr [inaudible] cast aside. On the principle of sequestration, and it becomes the baseline i know you dont want to talk about 988, are you standing absolutely by the principle that sequestration should not become a baseline in the bill . Okay. You always get ahead of where we are. The issue today is the cr. The issue in a couple of weeks is the debt creeding. Ceiling. Thats right. After january 15th, its sequestration. But were not there yet. Last question . Patty, please. Reporter thats the whole point of our budget replace sequestration in a responsible way, and the house budget did not. We have funding bills but need to be done for 2014, that is the issue we need to be talking about. How were going address this. We are unified in our caulk us with. We need to replace sequestration responsibly. We have been fighting for that. What we have on the other side is a whole mishmash of things not dealing with the budget. The last question. [inaudible] im sorry say that again. [inaudible] reporter is it your goal send the cr back . Yes. Thanks, everybody. [inaudible conversations] cspan student cam video competition is underway. Its open to all middle and high school students. This year were doubling the number of winners and prize money. Create a five to sevenminute documentary on the most important issue you think congress should consider in 2014. Entries should include cspan video, show varying point of view, and due by january 20th, 2014. Need more information . Visit student cam. Org. On cspan2 tonight Richard Cordray the head of the Consumer Financial Protection Bureau rue delivering a report to congress. A congressional hearing on dental health costs. Later senator leaders on Health Care Amendments being offered on the Energy Efficiency bill. Well continue the discussion on syria on our next washington journal. Bill cris tam joins us to talk about the divide within the republican party. More about syria as well as congressional battle over funding the government. And attempt to repeal the health care law. Our guest is steve kornacki. Washington journal is live every day at 7 00 a. M. Eastern on cspan. House Intelligence Committee chairman, mike rogers, and Ranking Member spoke at the intelligence and National Security summit about u. S. Policy toward syria. Here is some of what they said. The russians have been on the ground since the beginning. They have been supplying weapons, before, during. They want to do it whatever happens in syria. They need that warmwater port. They need to keep that warm water port. They have a strategic they believe a military strategic interest in keeping their footprint in syria. We should try to eliminate pretty quickly some benevolent interest. Theyre concerned about losing a strategic asset. Thats their number one primary concern. By the way, they have been on the ground providing advisers, providing intelligence packages, and its in their interest to probably make sure that the first people who might show up at the chemical storage facility, i think the russians want to be the first in the door. I imagine there is something in there that might cause some concern. I dont know. Im just guessing. It can work, but our interests have to align. We have to push their interests to align. I believe you need a credible military threat in order to continue to have an negotiations in success. I really believe that. Which is exactly why the russians said they would not allow that to happen in the United Nations. Take out chapter 7 which allow a United Nations military threat if we couldnt get a handle on the chemical weapons. I think theyre buying themselves they got exactly what they wanted on day one, which was time. They needed assad to have more time, so it gives them time to dig in, to engage in denial and deception campaigns on the ground about their chemical weapons program. It allows them to continue to supply arms financing and other things. And it sends a pretty dangerous message to the opposition that hes going to be there for a length of time. It is im skeptical. I hope it works. I just dont think it will work if we dont have some real credible threat to say, guess what . This negotiation doesnt go well. We have whole another set of options. Youre not going to like any of them. I worry that without that we dont this just becomes a game of taking four months to decide when to meet, four months to decide after that who gets to meet. Another six months to decide who gets to go in to syria. And that i dont think is helpful to what is happening on the ground. Do you agree there needs to be this credible threat of military force . Without a doubt. We are here because of a threat of military force. If you look at the history, when a lot of this startedden, started when the opposition was starting to gain momentum, russia basically wanted us to come to the table and see what we could resolve. Why did russia do this . Putin will the only do what is good for putin and second russia. Thats my opinion. And they know theyre on the wrong side of the issue. Especially as it comes to chemical weapons, but also theyre their interest in syria and the middle east. Thats the only jurisdiction that really works with russia. So it was to their advantage. When hezbollah got in the game. Things changed. We know iran was there. At that point, they said we dont need were winning. And that was why we decided to coordinate. No boots on the ground but the quarterback that helps the opposition and the other allies to try to at least help them somehow change the tide. And the whole goal then was to get russia back to the table. Well, then in the position now where we are. I think the president made the right decision because the only leverage we have now with the players that are there are force. Assad killed 100,000 of his people, women and children. Ive met with aside. Assad. Ive met with him. Im amazed. Ting bothers people in iran people are pulling his strength. Its all about maintaining that kind of power. I think we have to verify, trust but verify. I think we need time limitation. This is a stalling tack tactic we have to continue with the threat of force or nothing is going to happen. We have verify with the people that are going to go in the country. How its going to happen. Its going to be a tough situation. Countries still at war, will the people are check to see where the weapons are, and if they are leaving are they going to be safe . These are things we have to deal with. Friday, the American Action forum exams the 2008 financial crisis. Five years later. Former congressman barn barney frank. And commissioner douglas among the panelists. Thats live at noon eastern on cspan. Consumer Financial Protection Bureau Richard Cordray testified before the House Financial Services committee thursday. About the bureaus semiannual report. Including college cost, access to loans, and the cfpd collection data practices. This is just over three hours. The chair is authorized to declare recess to the committee at any time. For members who are arriving and seeing our hearing room for the First Time Since our last hearing, yes, it did receive a coat of paint. For those of you who were wondering when chairman franks portrait would make its appearance, it is here now. As i said to him and at the unveiling ceremony of this portrait as a conservative republican, i have long since look forward to the day where Bashar Barney could be seen but not heard. [laughter] that day has arrived. I could say it seemed to illicit a chuckle from our former chairman. I dont know how chairman frank got to my right. I dont know. That disturbs us both. Recognizing the time constraints this morning, we are expecting first votes somewhere between 10 15 and 10 35. The Ranking Member and i have agreed to limit Opening Statements to eight minutes per side without objection. So ordered. At this time. I will recognize myself for five minutes for an Opening Statement. This morning we welcome director Richard Cordray. Director of the cfpb to deliver the latest semiannual report. He recognized that the bureaus latest semiannual report may be a little bit dated due to the legal controversy that previously surrounded your appointment and thus delayed your timely appearance. Nonetheless, we welcome you today and congratulate you on the recent senate conformation. It is arguably the single most powerful and least accountable federal agency in the history of america. Thus it is an agency that demands rigorous oversight and subsequently undoubtly demand numerous congressional hearings. We look forward to welcoming you to our hearing room for many further appearances before us. As all of us know, it was designed to operate outside the usual system of checks and balances. That applies to almost every other government agency. Number one, the cfpb is effectively unaccountable to congress. Its exempted from congressional budgetary and appropriations process. Like many other agencies, theres thus no check to ensure that the cfpb director is sending the peoples money effectively to promote consumer. In a time of run away debt and deficit. Not even the agency from which cfpb obtains the funding. The Federal Reserve has oversight. It is unaccountable to the executive branch. The director once appointed and confirmed can only be removed by the president for cause. Neither can the chief executive force discipline on the bureau. Its not subject to the office and management and budget. Nor do they have their own inspector general. Im also finding fascinating that as syria has dominated our national consciousness, that it merely takes a majority vote of congress to launch military action or to go to war. It takes a super majority vote to the executive branch, Financial Stability oversight counsel to overturn a ruling at the cfpb, phonal the ruling can be threaten the safety and soundness of the entire u. S. Financial system. Its uniquely unaccountable to the section 1022 of the doddfrank act. Federal Consumer Financial law, reviewing court must give deference to the bureaus view. Finally, many respect it is uniquely unaccountable even to itself. Theres fundamentally no it, no they, only a he. There is no commission, only one director. Fundamentally accountable to no one. Along with the breathtaking accountability is a grand of power to the cfpb director which is unliteral. The director can declare virtually any Financial Product or service as unfair or abusive at which point americans will be denied that product or service. Even it if they need it. Understand it, and want. The National Benevolent Financial Product dictator mr. Richard cordray is now empowered fundamentally to decide what type of credit cards americans are allowed to have. What types of mortgages they may have. Whether or not they can access a bay day lender. All of this backs the question who will protect consume freers the Consumer Financial Protection Bureau . True Consumer Protection requires access to competitive, transparent, and markets. True Consumer Protection empowers consumers and respects their economic freedoms to make informed choices free from government interference. Consumer protection is not a zerosome game. For consumer to win, producers must lose. Or borrows can only win, when lenders lose. Consumer protection is not having powerful government agencies, quote, unquote, niche consumers to make correct choices in the belief they are incapable of making rational additions for themselves. When it comes to true Consumer Protection and the Consumer Financial Protection Bureau, this committee will do everything we can to demand the highest levels of accountability, transparency, and answers. By now you will recognize the ranching Ranking Member for four minutes. Thank you very much, mr. Chairman. Director corp. Dry, congratulations, again on your conformation. Im so pleased that youre here today. Your committee is long overdue. Particularly as of the nearly sixmonths of in order to score certain political points. As you know, the wall street reform law requires the Financial Protection Bureau to appear before the committee every six months to discussion the agencys semi annual report. The report youre here to discuss was released in marge. The timing of the hearing turns out to be somewhat appropriate; however, this month we must observe that fiveyear anniversary of the bankruptcy rooted in the risky and irresponsible lending and financial practices that brought the economy to the brink of collapse. Wiped out the life savings of many of our constituents, and set off a foreclosure epidemic that left many states still struggling. The Consumer Financial Protection Bureau was born from the crisis as one of the corner stone of the doddfrank act. Cfpb is on the front line of protecting consumers from bad actors in the financial system, and ensuring nothing like what happened five years ago ever happens again. Mr. Director, i would like to commend you on how well you have worked with the wide array of stakeholders doing your tenure. For your careful leadership of this young agency. You have consistently earned praise from both consumer advocates and industry leaders. Those of us in Congress Know thats not an easy task. Your leadership has resulted in achievement at the bureau that cannot be understated. In two short years the cfpb Enforcement Actions have resulted in 432 million being directly refunded to over 6 Million Consumers victimized by scrap louse actors in the financial system. Importantly they have ensured for the first time someone is monitoring a number of industries that have a history of problematic interactions with consumers. These include hundreds of millions of consumer interacting with consumer reporting agencies, debt collectors, and payday lenders just to name a few. In just the past few months we have seen the agencying in the and raise concern about the harmful impact of a number of practices on consumers including overdraft fees, private education loans, and the cycle of debt that payday loans can become. Mr. Director, your agency has also finalized several mortgage rules that have gone against the risky and irresponsible lending that brought the economy to its knees just five years ago. These rules aim to protect consumers from irresponsible mortgage lending, establish strong protections for homeowners, based in foreclosure and prevent lenders from steering home buyers to risky mortgages. At the time when numerous doddfrank regulations have been indefinite delays and im pleased with your progress. But, mr. Director, while your diminishments are significant. Issues such as Data Collection practices continue to need your attention. I believe all federal agencies regulate as Credit Reporting bureau, Financial Service providers, and others must proceed with caution on this front affording the highest respect to protection of consumer privacy. Cfpb is a datadriven agency, as you know. The doddfrank act specifically prohibits cfpb from gathering or analyzing any information that is personally identifiable. I trust carefully to the letter of the law and carefully balancing your bureaus duty monitor the marnght with your responsibility to protect consumer privacy. I strongly support the cfpb. I would also like to thank you for including me in conversations. Its important that we have a Good Relationship with communication and you have certainly extended the hand of welcome to me. I appreciate that and i would also like to thank you for the cfpbs reaction for the ability to pay for that we worked on and you worked on that so thank you so much for that. Last month i held a roundtable with lenders across my district. We address numerous challenges but one issue that everyone expressed great concern about are the mortgage rules that are expected to come into effect in january. Many of the lenders i have talked who are extremely concerned about the ability to have their systems in place to be fully compliant with the rules. In fact in the path act we address these concerns by pushing back the implementation by one year. This extra time is especially important to Community Lenders like those we have a virginia. Its unreasonable to expect a Small Community lender with one Compliance Officer to be able to meet and absorb the challenges of 3500 pages of new regulations proposed in the additial amendments that have been issued throughout the year. Community lenders need to ensure their systems are compliant in order to properly extend credit to their consumers. I noticed in a report that you had addressed this issue with Community Bankers in North Carolina and most recently and he said he would be releasing a second set of amendments to its ability to do payroll and he day now. I wonder what kind of adjustments to i would be interested we could dig down in that portion. Another issue we learned about is the inability of some of the institutions charitable programs who comply with the new mortgage rules. This Institution Prestige works with borrowers to determine their ability to repay on a casebycase basis with Great Success however the institution remains concerned that this program on not comply. These are folks who would never be able to secure a home without the help of a cheerful program. I. T. Concerns that the qualified mortgage rule will result in less availability to credit for low to modern moderate income borrowers. Are they better off if we would extend credit if credit becomes more difficult to obtain clacks i think the problem with the rules and the chairman talked about it really points to something that we have had discussions on in this committee and that is the structure of the cfpb. We still continue and i still continue to believe that creating rules and having a buyin from a committee would actually be better serve the count the consumer and the institutions that that are setup to serve the consumer so with that i yield back. The chair now recognizes the gentleman from illinois mr. Foster for one minute. Thank you mr. Chairman and Ranking Member waters. I would like to take a moment to congratulate cordray and welcome him before this committee. Since its inception in 2011 the cfpb has been a very effective advocate for consumers and taxpayers through that would note that in just two years the cfpbs Enforcement Actions ebersoll than 432 million being directly refunded to more than 6 Million Consumers and for the first time consumers have an advocate at some of the highest levels of government to fight on their behalf and to help level the regulatory Playing Field. Just five years ago American Families lost 16 trillion of wealth in less than two years. Our economy lost eight a million jobs and the Unemployment Rate jumped to over 10 . Measured the decline of Household Net Worth was worse than the Great Depression. This was no accident. It was the result of porkulus deregulatory policies that allowed certain bad actors to plan the most vulnerable members of our communities with little or no accountability. I want to thank mr. Cordray for the transparent and effective manner he is gone about in engaging these issues and i look forward to your testimony. The chair now recognizes the gentleman from michigan mr. Kildee for one minute. Thank you mr. Chairman and Ranking Member waters and welcome mr. Cordray and congratulations to you. We served as county treasures at the same time and in neighboring states and i congratulate you on that and i congratulate you on choosing Michigan State university as your college. Rather then the one in closer proximity to your home. I will tell you that i am really glad that you are in the position you are in. For as long as ive known you i have known you to be a careful and diligent steward of the public trust and im very confident that you will continue to do the great job you have. I do ask that you address two issues as you move forward. One is to carefully look at ways to provide additional protection from predatory lending for a nation servicemembers. This is a significant issue that needs to be addressed and i know you are aware of it. Second to carefully review the proposed guidance being issued unfair lending practices to indirect auto lenders. I know you are examining that and showing the proposed guidance provides consumers access to credit. Finally we know now in my state of california that we still do need to have significant regulation to what we have seen in energy trading. The time of the gentleman has long since expired. The chair now recognizes the gentleman from washington for one minute. Thank you mr. Chair and Ranking Member waters. Director cordray thank you in general for what you do and for your presence today and before we get into what i would characterize as challenging questions a couple of which i have of my own i wanted to Say Something else. I have the image represent the Third Largest military installation in america. Tens of thousands of servicemembers. I feel a strong sense of duty as you might imagine and i have no better ally in my efforts than your office in particular the office of Servicemember Affairs ably led by Holly Petraeus has been instrumental in efforts. They help me draft the language successfully to the Defense Authorization act that will literally help people save their homes on individual casework bases. They have not been not just responsible proactive and i think the most important thing we need to remember here, this work makes a difference in peoples lives and i thank you sir very much. See the chair now recognizes the gentlelady from ohio for one minute. Thank you mr. Chairman and thank you Ranking Member waters. I want to extend the sincere thanks for you being here. I have never been prouder to serve you. I would certainly like to disclose that i have known mr. Cordray for a number of years. I had the proud honor owner when he was the frank link county treasurer as well as a the state of ohio our hometown treasure that we have the opportunity to work across the breadth of that state making a difference in lives whether it was financial letters they Home Mortgage looking at credit and protecting folks. Youre being here makes a difference and did it to everything my other colleagues have said. Let me just say to this body here he has a proven track record, track record of integrity transparency and scholarship. I am pleased that you are here. I look forward to working with you. I make a commitment to support your endeavors. Job well arent. Today we welcome the testimony of Richard Cordray who was confirmed by the senate to serve as the cfpb first director on july 16 at this year prior to his service at the cfpb director cordray served the people of the state of ohio serving as its treasurer and solicitor general. Without objection the directors written statement will be made part of the record after his remarks. Welcome director cordray and you are now recognized for your oral presentation. Thank you mr. Chairman and members of the committee. Thank you for. Dr. Corridor if you could pull the akrevoe and a little closer. Thank you mr. Chairman and Ranking Member waters and members of the committee thank you for inviting me to testify today about the third semiannual report of the Consumer Financial Protection Bureau. One of the worst financial crises since the Great Depression the Consumer Bureau is the nations First Federal agency whose sole focus is protecting consumers in the financial marketplace. We are dedicated to improving the lives of Everyday Americans and restoring trust in Consumer Financial markets. The semiannual report we are discussing today embodies her work over the last six months of 2012. The report illustrates the ways we are using the tools congress has provided to empower consumers as you said mr. Chairman i agree is so important and to promote a fair competitive marketplace for consumer finance. We have taken steps to improve the workings of markets particularly those in which consumers cannot choose their Financial Service providers. One such market is debt collection. Concerned about systemwide problems posing risk to consumers we supervise debt collectors. The debt collector is covered by Supervisory Board that accounts for 60 of the annual receipts in that market. Bad actors in this market are a detriment to consumers in every debt collector that operates lawfully. We also expanded our Supervision Program to include the larger Credit Reporting companies. Credit reporters have a large impact impact on peoples impact on peoples lives although people often do not realize that prepares the these companies were not subject to the federal supervision. In addition to our Supervision Program we began handling Consumer Complaints about Credit Reporting issues all of which were opened a clear window into the actual operations of these companies. As a result of hero can evaluate whether the federal consumer laws are being followed throughout the process from credit origination to debt collection. Identifying problems and reading them out early we are working to minimize consumer harm. Our report also encompasses the bureaus first Enforcement Actions for Credit Card Companies that deceived and misled consumers been in some cases the Companies Targeted the economically vulnerable consumers with low Credit Scores and credit limits. We were able to since and we impose penalties on the companies to consider such activity in the future. Theres more to come in this area and these actions will serve as a warning signal for anyone who seeks to profit by misleading consumers. In the second half of 2012 we also tackled issues in the market for private Student Loan Debt totaling 150 billion in outstanding Student Loan Debt. Our studies detail the struggle students and recent graduates are experiencing that market and they tell us about every day. To gather with secretary arne duncan we have made recommendations to policymakers on commonsense reforms to ensure their iskander writing practices of the past are not repeated. The work ive discussed here today and will discuss is merely a snapshot of our efforts on behalf of the consumers. We are also addressing Consumer Complaints are growing number of Financial Products and services totaling more than 130,000 s. Of the of the end of last year now exceeding 200,000. We have adopted comprehensive new mortgage regulations banning practices that brought about their recent financial crisis. Our ability rule follows the practice that lenders should offer consumers mortgages they can actually afford to pay back. We effectively conducted outreach on various issues to told her american student servicemembers and others and what we have heard from them has guided the direction of our work each day we take another step in the pursuit of our vision that created a consumer or niche marketplace where customers can see crisis and risks upfront and easily make credit comparisons in which no one can build a Business Model around unlawful practices and works well for individual consumers for responsible businesses and for the economy as a whole. We will continue to persist in this work and we appreciate your oversight. Its very meaningful to me in the bureau and as always i will be glad to answer your questions and certainly to stay as long as you like trade thank you. The chair now recognizes himself for five minutes. Thank you mr. Cordray and in particular your last statement about your willingness to answer our questions. My first question our statement frankly has to do with that. I know that the agency and use yourself take great pride in the commitment to transparency and accountability and frequently speak about the number of appearances that you and your staff have had a four hour committee. The question is not really a question of quantity. It is a question of quality and frequently we have found mr. Director that members of your staff can be uniquely unresponsive to our inquiries and particularly on july 9, figure number two i believe stephen appeared before our committee dealing with the Ranking Member spoke of on this very sensitive issue of Data Collection regarding our citizens and here is just a snippet of what we had to deal with. If we could please roll the video. I dont have the exact number. I will be happy to follow up on what the number is. We are happy to provide information. I would have to verify that. I can verify that for you. Could you get back to us on that . Would be interested to know that you. I would have to give back to you with the precise numbers. I would have to provide that information for you. I would have to we can seek to provide that information for you and we will do it in as timely a fashion as possible. Mr. Director that appearance was on july 9. That was over two months ago. Because youre number two was unable or unwilling to answer some of the questions there have been roughly 100 followup questions from both sides of the aisle in the yet to hear any response notwithstanding the fact that he said he would get right back to us. So the question is do you have any knowledge of when your agency plans to respond to this committee . Thank you mr. Chairman and thank you for raising that set of issues. I have reviewed the transcript of that hearing and whenever someone else comes to testify rather than myself you know i was not invited to testify during that period i always make it a habit to review the transcript and follow up. My understanding of those exchanges that were edited and truncated their was that this committee is quite interested and i think appropriately concerned about the manner in which the bureau gave us the information. I think the statue in the law contemplates that an agency should be wellinformed and its work in its report to you and regulations. Im happy to get the dash we anticipate answers to these questions. That hearing occurred on july 9. There were a few questions for the record provided to the bureau in the days thereafter but there was a huge slug of questions that total close to 200 that came to the bureau on august 12 so more than a month after the hearing. I took time to prepare those and make sure you had comprehensive address the issues. We have been working in the ensuing now month to prepare responses to the questions for the record and also together contract documents and other information. I now have less than one minute of time. Any day now. We will, yes. In a limited time that i have remaining i know a number of other members will be asking questions regarding qm. Its a standard that i fear may be underinclusive and simultaneously overinclusive but i am somewhat curious and perhaps in my limited time you will have to answer in writing. As i speak to a number of communiticommuniti s and Financial Institutions they are very concerned about a line being drawn at 43 debttoincome and that begs the question when somebody has 44 debttoincome and is willing to put 20 down and has a fico score which is a great credit but apparently they will be denied credit under the standing standing standard versus someone who has a 440 fico. You could be restricting credit to creditworthy borrowers and on the other hand although you are not a safety and soundness agency you could be helping put the governments imprimatur on exactly the type of mortgages that helped bring about the crisis in the first place. My time has elapsed. The chair now recognizes the Ranking Member five minutes. Did you want me to respond to that question . I would but im going to attempt to set a good example for the rest. Perhaps you could send that in writing and i will yield to the Ranking Member. I would be happy to yield a minute to mr. Cordray so that he can respond. Without objection with unanimous consent. I appreciate the question about the qualified mortgage rule which is a focus of tremendous interest among members here. I was in North Carolina dressing the mortgage conference with tremendous interest as well. The point you made, i just want to address because its not entirely accurate to say that every market has to have a 43 or less debttoincome ratio. That is one of the categories, bright line categories that gets you to a qualifying mortgage. There is a separate category get the bonus eligible for for purchase by any of the gses in current servitor ship with fannie mae or freddie mac. It could be above 8043 dti. A third category that which are in response to the concerned members of this committee and Community Bankers brought to us is if you are smaller creditor of under 2 billion assets to make mortgages in the portfolio those are qualified mortgage is regardless of the 43 dti so its not a onesizefitsall. Its not fitting everyone into one metric. Its an attempt to respond to different considerations we have heard around the country and im happy to address that in detail. I think you will have the opportunity. The chair now yields five mins to the Ranking Member. Thank you very much. Mr. Cordray i want you to know that as the chairman described the questions that were asked of you he said there were 170 from both sides of the aisle. This side of the aisle only had one question so i guess it was 169 on the other side and i also would like to tell you that if you have not been blocked from coming to this committee we would not have to rely on other people. You are very well qualified to answer any questions and im so glad that you were confirmed in you are here now. I would like to continue with that line so as you have started to do so expertly explain what has happened with q. And did a lot of my friends on the opposite side of the aisle talk about wanting to help Community Banks and ive been trying desperately to reach an agreement so we can do more. I just want to know how perhaps you can give some assistance and some resources to help our Community Banks get in compliance. Will you continue with that line of discussion on qms . When the doddfrank act was passed in july of 2010 there were provisions in the statute that could have taken effect of their own momentum and they would have taken effect in january of 2013 governing the Mortgage Market if this congress has not created this agency and not authorized us to write the rules. That is what would have been the timeframe. The rules that we wrote actually contoured their criteria but was in the statute in ways that were very responsive deliberate the responsive to the concerns we heard from Community Banks Credit Unions and many others in the Mortgage Market who were very concerned in this era and it may be the wasnt true in 2006 in 2007 about access to credit. We are concerned about it as a result but we are prepared with respect to the Community Banks and Credit Unions and helping them get into compliance we have been working at that intentionally and purposefully and alongside them every day of this year. We have developed plain language guides to the rules that translate them frankly into understandable language because none of us including myself enjoys reading the federal register. We have made compliance videos how to guides and we have also worked with the other agencies to make the procedures clear. They have been finished and published well and in advance of the affected date which i think is unprecedented and past recent experience. Experience. We are working very hard and we are also taking questions every day in attempting to address issues and when he mentioned amendments to the rules all of those amendments have been in response to industry questions and concerns about making it more operational and making it easier for them to implement. There has not been a single thing that added burden and we continue to that effort. Its important for us recognize that we can write rules and we can say to industry now its your problem but with that its all of our problem. We want the rules to implement successfully. We want the lenders to be lending in the Mortgage Market and housing and recovery which is well underway to continue and we are working to make sure we understand those issues and i intend to be responsible are only to the members here but to those across the country who have such a stake in that market. Most of all average americans. Thank you very much. On the side of the aisle many of our members are convening in meetings with Community Banks. We have been doing that all during our break and we are very engaged with them to find out how we can perhaps get them out from under the yoke of regulations that should not apply to them and of course we had been centered on qms i have implemented. I would like to know if we invite someone from your shop to attend one of our meanings where we have convened the Community Banks which you make someone available so that we can make sure that they have access to the information that can help them come into compliance that many of them may not know about or easily understand . Gladly and they make an offer to members on both sides of the aisle whether they are on the committee or not. Feel free to convey to your colleagues. Another a lot of questions before having. We have met just this week with five or six Day Community banking organizations. I met with several myself personally. We have a number of people around who can attend those meetings. As you know we worked on meetings in your district before and im happy to do that with all the members to make sure people understand and have their questions addressed. That is something we want to do and i appreciated any invitations we have on that score. Let me thank you for the attention youre giving to the Community Banks. It is high on our list of parties on the side of the island i appreciate your support and assistance. The chair now recognizes the chair of the Financial Institution financial subcommittee ms. L. For for five tenets. Thank you mr. Chairman. Mr. Director of the two to stick with the qm discussion. I mentioned it in my statement with roundtables because of the pressure the deadline coming coming in january. You mentioned North Carolina. He mentioned adjustments that were going to be made. Do you have pulled assurance that this is going to be ready for primetime and Community Institutions are going to be able to have their back office and i. T. Itn everything ready to meet the challenges and still changing some of the rules and provisions . We would be interested in pushing it back. Is there any thought in your mind that id be a good idea to ask. Yeah, its a very live topic at the moment. The first thing i would say is we have been in close touch with both larger and smaller institutions and lenders but also realtors and homebuilders and appraisers and everyone else has a stake in this market over the course of this year. Most of the institutions have told us that they will be in compliance and they have had concerns about it and they have been nervous about it. They have been looking for questions to be answered and certain relief to be given on operational issues. I think for the most part they have said they will be in substantial compliance by january 10. With a smaller institutions it includes special provisions and i alluded to them a moment ago that sometimes a Smaller Banks and Credit Unions dont seem to be yet aware of so it is incumbent on us and ill be happy to work with all of you to get that message out. Some of them are worried about the qm rule and i had this come up in North Carolina yesterday and had a come up with oklahoma bankers last week. It covers the vast majority of Community Banks. Anything they make and keep in a portfolio which is what many of them do which means that pay close attention to the ability to repay as the safe harbor penny. Many dont seem to fully appreciate that. It was further work we did after january 10 and we want to make sure we get that message out. Beyond that there was another piece that i wanted to say about that and i cant honestly remember what it was. If it comes back to my mind. Let me shift gears a little bit. One of the provisions in doddfrank that you and others such as the secretary of treasury would you looking at old outdated regulations because this is another complaint we hear. Its a complete compounding on top of regulation upon regulation. One of the charges of doddfrank was to look at these. How much time do you really spend at the cfpb scraping out any old outdated and air relevant regulations and can you name a few of those . Thank you for that question and its a concern of mine and i think its an appropriate concern for you all because i do think its a question and the regulatory world. Each individual rule people focus on a have a rationale and justification and they think is greatly needed and what they often dont knew do was look at the totality of the overall burden. We are trying to be accessible to institutions and invite them to raise issues with us. We embarked on streamlining Initiative Last year. We put it out for notice and comment for to tell us what kinds of things they would like to see a streamlined. Theres a certain amount of streamlining we have been doing all along. As we write rules we find ways to wait things out to a level of some detail. You could actually give me a listing of rules that have been grandfathered out . As we write each rule we find things that we peel out of focus their previously as well as up dating but in particular we were working on the atm sticker issue with jenny and congress addressed and we were in the prague process of writing a rule. The next one we are going to be taking on is the annual privacy notices which we think the burden way out weigh the benefit for consumers. We are going to be looking at that and that is underway in the next few months. Affair of the things you would like us to look at please submit them to us because im interested in doing that. I think it would help build their credibility. I think it would definitely help your credibility and i think would help institution that is under your purview. If you could as a followup, maybe we could get together and you could show me some of the proof that this is actually occurring because in the field it doesnt seem to be. I want to register a concern because im one of those who asked for certain data from the last hearing in july and we still dont have a followup and i would like to have that as well. The other question i have and i only have eight seconds, the other issue i would like to raise maybe in another forum is when youre collecting fines you are retaining some of the fine and you were not giving it all the way out to the person involved with is a credit card or mortgage or whatever. I would like to talk further about what youre doing with those dollars but im out of time. We try to seek full compensation for victims if there is overage in terms of fees. We potentially offer that to uncompensated victims in that matter other matters and that is something we are trying to focus on. I think its important to note that is stacking up tens of millions of dollars right now. The time of the gentlelady has expired and the chair recognizes the gentlelady from new york for five minutes. Welcome. In the creation of the cfpb was one of the most important victories for consumers in a generation. It is extremely important that we have one regulator whose sole focus is protecting consumers so that the consumer is not an afterthought or a secondary thought or a third thought or not thought about it all as we saw they were treated when we move towards the financial crisis. In my opinion the bureau has done an excellent job so far in working with both the consumers and the financial industry to write common sense rules of the road and i want to give one specific example and that was a rule that came out in april at the request of chairwoman n. Myself as a concern that credit card bill of rights the c. A. R. D. Act. The interpretation from the fed was that spouses could not have access to credit and that was not chairwoman capitos in my intent when we wrote that law. We appeal to every single regulator and you finally took action and had a rule that allows credit card issuers to consider income that a stayathome spouse applicant shares with the spouse. That is just common sense and i think that this rule is a concrete example of the agency with working with consumers and the financial industry to allow responsible to access to credit and liquidity to American Families. So i want to thank you for responding to the chairwomans and my request. You took too long but you got it done so we are very grateful and consumers across this country are too mad. I would like to go back to the chairmans issue focusing on Data Collection and i would say that this is getting a tremendous amount of attention before congress now throughout government and underdog frankly required the bureau to collect data in order to improve your rulemaking, your understanding and supervisory functions. Doddfrank also included numerous safeguards to protect consumers personal privacy and to prevent the misuse of confidential information. That was an important hearing and after that hearing chairwoman capito and i feel that its not only important for you to give us this day that but every financial regulator give us this data so we have appealed to the gao for a bipartisan report on what all the financial regulators are collecting so that we can see if there is any efficiency. Is there any overlap . Sister sharing between the agencies and what are the specific safe guards for the personal privacy of individuals . I would like to use my remaining time to hear from you. First of all what data are you collecting . I know it can be exact and you will get to to the chairman but off the top of your head what are you collecting then what are the safeguards that you have put in place to protect consumers personal information . This is very personal information and its important to protect it. If i could just a brief word on the credit card rule that you mentioned that both you and congressman capital push so hard on and effectively. When you raise that to me i thought of my mother passed away about 33 years ago. She was a working mom and she would have felt exactly as both of you did and that was important to me and thinking about addressing that issue. On Data Collection we have first of all welcome the gao examination of this issue and we have worked closely with gao on a number of matters. If they do an annual audit for us which is unusual among the federal agencies and they will deal with this i think appropriately and help us and have suggestions for improvement. Second in terms of the data that we collect its information that has to do that is very important not just with Consumer Behavior patterns. We are not interested in whether Richard Cordray went to this restaurant and spent x dollars on dinner last night. That is what the private sector does. They are all about that. Our issue is we have to oversee and understand the pattern of how they treat their customers in order to understand the financial consumer laws being followed are being violated. So we collect data in prenamed buckets. In our Consumer Complaint function people come to us voluntarily because they have a complaint and they want to resolve the trade the same with constituents who come to your offices. Second is the area of supervision where our job is to supervise these Financial Institutions. Some of the most powerful punish institutions in the country and in the world cant do we have to be a little and gather information. Mr. Cordray if you could summarize. There was a third bucket. That is our Market Monitoring function which is an appropriate subject of inquiry for this committee where we are doing a sampling of data to be able to assess. We have a c. A. R. D. Act report to to this congress by october 1. It wouldnt be a very good report if we didnt have information to base it on analysis of that is a big part of our work as well and im happy to address that more. The time of the gentlelady has expired and the chair recognizes the gentleman from california for five minutes. Welcome mr. Cordray. I enjoyed your Opening Statement we saw plenty of those before 2007 and larger Credit Reporting companies. The one thing that is glaring to me is you took Title Insurance and you tag it for the buyer. That is a real concern for me. Im sorry. Insurance policies . You have tagged those as optional. Anytime a buyer would look at something it would say optional and it costs money and generally they dont do. Most people dont understand what optional means are they dont know what Title Insurance means the Bank Regulators and gses all required Title Insurance form. The issues they look at and Title Insurance are completely different than what a buyer would look at on a Title Insurance policy. They want to know they have free and clear title so they dont get into the back pages of title policies but ive been in real estate since my early 20s and done a historic easements in right away shoes that will come up on the back pages of title policies that lenders are not concerned with and they dont care about and if we are concerned about empowering consumers why would you take something that i believe is very important that could arise in the future and put optional on it . Im not sure im following exactly what you were referring to. The buyer does not have to get a Title Insurance policy. Generally they will now. What manner have we addressed that issue . You put it as optional for a buyer. In what . In some document . Yeah on your proposal you have been there that insurance is optional. If you want to really protect consumers that is something i would be concerned with. You have historic utility easements or you could have a right away easements are property and many are downsizing and not necessarily getting a loan. They are selling an expensive home and buying a smaller home because they just on the the, the longer. They are not getting involved with a lender. Theyre buying a piece of property and this is optional in many cases they wont. You are talking about already laptop pros rule which is not yet been finalized. That is what im trying to get you to consider. First of all i take your point and your point is obviously meritorious. The title is often in question with properties in different parts of the countrys more so than others. Title insurance obviously is meant to address the risks of that. I will be happy to go back and take a look at the point youre raising about how we are characterizing it. Anytime select utilities and later the Utility Company comes in and they can put in a pool or do things on their property that they otherwise want to do. If we are dealing with consumer safety to empower them thats something we need to encourage them to do if anything. I know qm has been talked about and i have some real concerns. You exempted freddie and fannie which i think probably increase the number of loans would qualify under qm with their exemption. If you took a 48 would not qualify the qualified in 2010. If you are looking at stability in the arquette raid at this point lenders i have talked who are very concerned about this issue. If you put it back into the equation and they put themselves in the equation they say they will not be exempted. You are talking about half the loans and they were good performing loans that will not be made now. Dont get me wrong, there are a lot of lenders and made predatory loans. They shouldve been put in jail and they never were. We are going to have guidelines so stringent based on a worstcase that would not be applicable today using good underwriting standards. Is that not a concern for you . It is a concern for me and i thank you for the question question because there has been confusion abound the core logic analysis. Only half of loans in the market would now be covered. They have since clarified that is not correct and that in fact the vast majority of loans would be covered. As you say over time what we tried to do there frankly was to give room for this congress. We know that you are looking at gse reform. We had to write a rule for the Mortgage Market that allow flexibility. We tried to make sure we were covering the market broadly as it is now. Please would you look at that i am very concerned on liquidity. We will continue to monitor this as you go and as you address reform we will respond and react to that if we dont want to freeze the Mortgage Market or constrain it. The time of the gentleman has expired and the chair now recognizes the gentlelady from new york. Thank you mr. Chairman. Dr. Cordray medical reporting continues to be a source of consternation for many consumers. The medical debt responsibility act which i cosponsored will require to settle medical debt to be removed from Credit Reports within 45 days. That bill directly address the negative information on consumers credit score. Will the cf the now regulate Credit Bureaus do you plan to dress how medical debt is treated on medical reports . I thank you for that question and is one of many things i have run across at the bureau that is fairly complicated and not necessarily helpful to consumers frankly. Many of us will go to the doctors doctors Doctors Office and we will end up with a bill covered by insurance but maybe its all covered and maybe theres a copay and maybe we have to pay something. We may not know when they leave the office exactly hows going to be handled and sometimes that can end up being reported as a debt. We may not even over it. It may be a battle among Insurance Companies or it may be that we owe 10 or 20 but it wasnt billed to us. There a lot of things showing up on peoples Credit Report that theyre not a bread that are probably not necessarily correct that may or may not be justified so the issue of medical debt is a particularly difficult one. Many amounts are very small but they loom large in terms of qualifying for mortgage or something. I do think its a fair point that you raise that it may be a subject for legislative attention and or action. Its something we are looking at the bureau. Its clear that medical debt is a separate category that is tripping up a lot of americans in ways that they wouldnt under under understanding would be appropriate. Thank you. Section 1071 of the doddfrank at credit application data on Small Businesses as well as minority and women owned businesses. Can you elaborate on how collecting this information will help enforce fair lending laws and enable lenders to identify opportunities for improvement in other underserved communities . First of all i think the logic of a congress did in doddfrank makes a great deal of sense. My understanding was there were some effort to collect this data by the fed. At one time they had a survey that was discontinued at one point. This congress expressed its will for that data which was important can shed light on landing patterns needs to be developed. It was determined to create a provision in the act that put responsibility on us. We want to work with the Small Business administration who are obviously much more knowledgeable in the area then we are. Theres there has also been some talk in effort among other departments in terms of how to work on this. We are trying to first of all figure out how is the best way to proceed. The second thing i want to point out is we are going to be undertaking and we have indicated now the honda data which has been very valuable but its in need of an update. Everybody pretty much agrees. Congress also trust that and we will be undertaking new rules to govern the data. Out of that we expect to learn a lot that relates to Small Business Data Collection and there may be some overlap operationally as well. We are thinking about this and we understand the importance of it and why you are looking for it. It is not necessarily in our immediate comforts him because we deal with consumers typically and is the only area where we are given responsibility and business so we want to work with a thirst to make sure that can be done appropriately. Wind can we expect the cfpb to publish the rules implementing that section . I can give you a date in terms of when we will publish rules. I can give you the insurance that as of this fall we are underway with thinking about how the staff that i work with the other agencies and the update which is extremely important and there may be things there that end up some of the data can be jointly collected which would obviously be efficient. Regarding the remittance transfer providers, last year the bureau published a rule and critics took exception with a rule for potentially increasing the cost on small banks and Credit Unions. Doctor Richard Cordray, i sent your you a letter. Did you respond to that letter . Thirtyfive fellow members joined in on that letter. You are response, in my opinion, was very general. I will be sending a followup letter i hope as soon as possible to send a more detailed response. Thank you. Thank you. Section 1022 of doddfrank says that the bureau may not use its authority on this paragraph to obtain records from other agencies and other individuals. And for purposes of gathering or identifying data herbal information of concern. Are you aware of that section . Im, yes. Is the agency collecting personally identifiable Financial Information of individual concerns . Yes. I would like to address this comprehensively. There are different provisions in the statute about gathering information needed to do our work which we are expected to do and carry out our responsibilities. If we do not have any information, we cannot carry out our responsibilities very clear. We are undertaking monitor markets and being able to understand patterns so if we undertake to gather that information, we are required to proceed by either rule or order. We have not come until very recently, proceeded under 1022 at all. We did just now sent out an order to a number of companies with a template Consumer Credit agreement as part of our efforts on the arbitration study, but there are other areas in which we are permitted to collect information. The Consumer Complaint function is one let me ask you this you are aware on may 11, of last year, your agency approached the u. S. Trustee is program and ask them to make a request from the Federal District court in tampa, florida, for 5 million bankruptcy files . Serve, we do not typically comment on the details. We understand that other parties feel free to comment on those and typically do, and on those. We are working with a number of different agencies, including the Justice Department to carry out our responsibility. You may not want to comment, but those 5 million files have all sorts of personal information. You know, let me ask you this. If you do that, hypothetically, and you would receive a personal Financial Private information on the u. S. Trustees program, it came from the files work attorneys, would that not violate the act . First of all, no. It would not. And let me give you a related example. We have Enforcement Actions against a number of Credit Card Companies. Okay we have these with the institutions in regards to the information about these consumers. Let me just say, please. You bet. If you suggest that the u. S. Trustees office file an action or request that thousands of the every bankruptcy filed in this country, would that not violate the act . First of all,. Well, first of all, with those trying to report the facts. Well, i am guessing that will violate the charge with specific connotation. You have been aware that you have been walled off with the practice of law intervening. Let me just say this. You have that is a data mining and data collecting process that you have had the u. S. Trustees contacted to know what to do. Without the knowledge or consent of the citizens of the United States, is that true or not, you can answer yes or no, you can say that you have not been able to talk about it. I think that that is a general enforcement action okay. We need to understand individual consumer harm and we need to understand that in order to be affected. There are people around the country that are purporting to be this. We are talking about the legal situation. The time of the gentleman has expired. We now recognize the gentleman from North Carolina, mr. Black, for five minutes. Thank you, chairman. Welcome, director cordray. I have two quick questions and i believe all the rest of the time for you to answer. If that is not enough time, maybe you can ask in writing. There seems to be a proliferation of online payday lending that seems to be able to evade state will laws and government and lending. And i am interested in knowing now that the cfpb has the ability to regulate payday lending, what options you are exploring in this arena, and what is your timetable for doing so. A couple of my Bank Constituents have raised questions about a recent rule that requires them to issue separate statements for Bank Accounts and loan accounts on this area that requires them to duplicate the costs and drives up the cost of the regulation. I am wondering whether you have the ability to go back and take a look at that or provide information to me that justifies why that requirement is necessary. Particularly, Small Community banks and Credit Unions are concerned that the extra cost of mailing this is much the same as the privacy the costs of mailing privacy policies, that it is just an onerous call. If you need additional time, please permitted in writing. Thank you. Thank you, representative watt. I dont know that im familiar with the question that youre raising. There is some sort of duplication. Thank you, for that. Im very interested to hear about it and we want to followup with you. They have indicated to me that it is a recent rule, so the maybe its a proposal or something. We certainly wouldnt want that to be the result. I would agree with you on that. On your first question, which is a very good question, and i am very active in the topic right now, the online payday lending the online payday lending is very interesting because much of it is migrating and it is estimated that the majority will be online in the next seven years. What often happens is that can create problems in states where there is a user recap, as there is in North Carolina, and the 13 other states. If the loan is being made into that state above the rate of interest that can be charged legally in that state, that is problematic. If the loan is being made into that state by someone from the internet that is not licensed to provide a loan in that state, that also can be problematic. We are cooperating with different state authorities, banking regulators and also attorney generals and it also requires us to regulate it and there has been activity now with what theyre having an regards her relationship with the banking institutions. If they are having a transmission mechanism and collection mechanism of the financial entities, that can be problematic. It is the subject of some considerable scrutiny right now. But we are mindful of the fact that i go back to my experience as attorney general in ohio, internet practices can be very difficult for Law Enforcement at the state level. They go beyond jurisdictioncome and they go beyond National Jurisdiction as well. I think that the moment, is this an issue in this area . Guest and at the moment that perhaps this is something that needs supervision and rules, we are looking at this payday online loan industry and we have indicated that in our regulatory agenda. These are things that were looking at because they are hard problems, i have seen them at the state level. And i know that we want to make sure that we can all be affected together. Paterno recognizes the gentleman from the subcommittee. Thank you so much. When a senior Government Official comes before a hearing of congress and fails to answer questions in a timely manner, i believe in the minds of the American Public that there is an appearance of impropriety by the individual and by his agency as well. That same agency is responsible for secretly looking into the private papers of the American Public as well, and i think that that rating to a higher level. Let me please understand your testimony then. Your testimony is that you were well aware of these questions of your secondincommand after agency back on july 9. Yet over a month went by, all the way through to august 12, and you had still not answered any of those questions read an excuse that you give to Congress Today is that more questions came in after that fact. Now, can you answer that . That is not my testimony, i can explain it. Can you explain your testimony on july 9 . On july 9, that was my testimony and there were a few questions. There were multiple questions that were cemented on august 12. Can you explain why you did not do it during the first five weeks . It took a vast majority to formulate the questions. Explain why you did not answer those basic questions in the first five weeks. Okay, we would have an easy time answering those explain why he did not do what you decided it. I would like to respond to your question if you give me a chance to respond. So far you have not answered why. There were a few questions cemented that we could have answered, and as we were working on those coming a vast number of almost 200 questions for further cemented that intersect with the other questions and intersect the other questions. It involves gathering contracts and this took more than a month to formulate the questions and we have had less than a month now to respond to them. Let me you still have not answered the basic questions and we gave you the number of questions. As he said, they were easy to answer. Yet in five weeks you could not answer those questions. It is not my testimony, your testimony a moment ago was that some of the questions some of the questions wouldve been easy to answer had they not been followed by a vast number of questions to intersect with them and affect the answers. Okay if i could just say did you know that the questions were coming a week after july 10, 11, 12, that all these questions were coming . Our staff has had regular contact with the staff to understand. We always respond. My understanding, by the way, im supposed to be back here and that chairman has indicated that again. So you will have plenty of opportunities. But we have received these questions for the record. The committee has been formulating the questions. Here is a question. Would you commit to sending us all of the contracts engage with a third party is and that . Yes, we are happy to provide the information. Its two months later. You have not provided that. Do you have agreements with any Foreign Countries . I can verify that for you, mr. Congressman. What you just said these were the easy questions and you said you could not answer them because youre waiting for the other one. We dont have any agreements at this point. We testified that at the hearing im sorry, no, you did not. I will verify that for you. That is fine, but that is the answer. We we will have the interest you in days. It is the amount of information that you will see. Our staff has been working incredibly hard. If i take the oversight responsibility for this response in the committee, in a very serious way, i take it and this has been our track record in we will continue to try to establish that track record. I want to satisfy you on this point. Okay, one of the other questions is and i will submit questions to you, minor basic questions. Again, i have your commitment and i have your answers. I can get the answers by the end of next week . We will take all of the questions for the record that our cemented. If there are law, it will take a while to respond. If there are a few how many consumer counts do you monitoring the Data Collection . We have our consumer response functions. There is a Supervision Program of which deals with the 110 largest Financial Institutions in the country that have Extensive Customer base across this country that we deal with all the time, when can we expect when can we expect the answers . Approximately 200 pages, pages and pages of answers and document. When will that be . Within days. The term of the gentleman is expired. We now recognize the gentleman from new york. Thank you, mr. Chairman. Director cordray, thank you for your cooperation in working with this committee. Of being able to willingly extend the staff and conversation and anything that we ask you to do in response to Ranking Member maxine waters. Asking questions, being able to do this, we are more than willing to say not only on the side of the aisle, but on both sides of the aisle, and whether or not people are on the side of the committee. I want to thank you for your cooperation. We appreciate you being open and transparent about it. That is tremendously important and something that we need to get done and so clearly, the American People, we want to thank you for your agency again. More than 6 Million Consumers. Over 200,000 Consumer Complaints have been recorded. There have been several rules and guidelines issues that affect millions of americans and Consumer Protection rights as well. So it is a service to the American People. I would like to thank you for what we are doing in that regard. In your answer, one of the questions to your own questions, from the gentle lady from new york, i often think the same thing about credit, who had to try to get Public Housing and try to get banking and institutional banking, sometimes they were denied, trying to figure out other ways in which they can make a living without going to loan sharks. So to that end again, we are pursuing leadership on the issue, and i think the you had the final rules to establish the procedures and those nonbanks are lending money under the authority, including those that make payday loans and etc. I was wondering, first could you comment on the study that the cfpb has been bringing to this industry, and also have you looked out with some of the activity by the consumers that mr. White was talking about, the using of the online payday loans, as we try to figure out how they can have access, but not be abused. And how the cfpb can be involved there as well. And lastly, also i had a conversation with some banks yesterday, asking them why wont they compete in this market. And they said that they would like to and that they were complimentary of you. But they said that they taught that there were some conflict at times between some of the jurisdiction between the occ and so they are conflicting and they are not clear that they would like to be under the ruins under the cfpb. Can you give me some feedback in that regard . Im intrigued by your last point as we plan to hear more about that. I do think that many Financial Institutions could make smaller ones cheaply including providing credit to those people that need it, and the higher cost that some get into. I just want to go back a couple of comments from here. First of all, the point that you made when thinking about your own family. It is something that i try to preach at the bureau all bureau all the time. In preparing for this hearing, we are working with the backgrounds of the members of this committee, and there are many people here that are sophisticated and have legal background, real estate background, legislative background. But none of us have to look very far to think about mothers and fathers, sisters and brothers that struggle with these issues and these are the people that we are working for. It is important for us to keep that in mind. As we work for them, one of the issues is how do we protect them against some of the predatory practices that do unfortunately exist in these markets. You mentioned the payday lending earlier this year and there are a number of concerns that were identified in that report. And if we dont have the Data Information that we need to make those judgments, we are going to be very illinformed and our policy judgments and we are going to be pretty wild in targeting what exactly are the major concerns. The better it information we have about what is going on in these markets, we can pinpoint what is an appropriate action and what is not, which is something i think you should all want and do one, and that is the importance of us gather information on this issue. The time of the gentleman has expired and the chair now recognizes the Housing Insurance subcommittee. Thank you, mr. Chairman, thank you to the committee. I have a copy of the cfpb manual and it is referenced in your semiannual report. I assume that this is intended to give your people some direction, is that correct . It is that general problem is doing what you intend, a guidance document. Is a guidance document and it talks about unfair, deceptive, and abusive acts or practices. When you look at the statutory definition of unfair, and it has a number of examples to it. A fairly large number. Then it has deceptive parts and a statutory definition of what the deceptive acts are. In a number of examples so that a person in the field can know what to look for, when you get over to abusive acts, it is such a small paragraph and it says that it has a statutory definition, but it lacks examples for the first question that i have is who is telling the examiners would abuse it is, in our examiners just making that call as they are out in the field . In the first two examples, we are very detailed about what to look for. But when you get to abusive acts or practices, these arent the definition. Are you telling them what abusive acts are, or are they making that decision on their own . I appreciate the question, congressman. These are questions that we have gone around the block on a few times before. And unfair is a define defined type of situation and we can work on explaining these defined types of concepts. Abuse is another issue. So in terms of what the examiners are looking for, they are looking for what needs the definition that congress itself laid down. Congress imposed this term and defines the term. In terms of examples, they have been a little harder to come by. I would certainly agree with that and we have talked about this before. We have not been actively oppressing people with some concept of what is not unfair and deceptive. One of the impressions has certainly been a circle of what is unfair and what they have overlapped to some degree and it is a circle of what is also overlapping. The hardest hitting question is what is abuse if it is not also unfair and deceptive. Many things would be both or all three. So heres a question. Have you brought enforcement action order determined practices or products for abuse is up to this point . We have brought several, and they have brought pretty egregious examples of defrauding of customers. That would obviously be an example. So why wouldnt those if they are examples, why wouldnt they be as a part of this . We are working as a part of the situation in those instances were subject to the guidance and we will be updating that from time to time. Happy to have our staff provided with more information. Some of what we have done has been public in terms of consent and other resolution of cases, i am happy to give you more. But it is still a difficult issue and it is one that we focus carefully on and not be wild and overly aggressive in terms of making up things that cannot be used. I think the fictional transparency here is part of its. Okay. Going back to quick issues, the Data Collection, i dont think the American People are very concerned about Data Collection. One of the things that i hear from people that your agency has done what with this examination, you are requesting a huge amount of data. And a couple of things. Number one, specific information, and its very costly. The examination process is a sampling going in with a pattern or practice in here. We understand you are twisting the entirety of the records of the company. And i dont think about it is the intent of congress. We have ofr, we have been collecting data, we have many collecting data. We need to hear who has access to secure that data. Specifically we intend to do so. Sometimes it is an enforcement situation and we need to know all the consumers affected to make sure that they are getting restitution that is appropriate. We are happy to follow up with you further on that. We should be sampling in not pressing institutions. The time of the town has german has expired and the chair recognizes the gentleman from texas. Thank you, thank you mr. Chairman hensarling. Director cordray, i would like to congratulate you on your confirmation in the senate. I have many friends across the aisle in this committee that know the work of director cordray and let me remind everyone that 17 republicans voted for cloture and 12 Senate Republicans voted to confirm mr. Cordray as the director. It is possible that those Senate Republicans have heard of the accomplishments, including 432 million refunded to 6 Million Consumers because of the new bureaus actions. They probably also heard of the bureaus work on behalf of College Students and Older Americans and our servicemen and women. A commission by the aarp agreed that this bureau is a needed institution and i could not agree more. My first question to director cordray is can you provide highlights of the forthcoming Financial Literacy efforts of the bureau, including research results, pilot programs, and the recently announced financial coaching initiative. Thank you, congressman. That is a subject near and dear to my heart and im putting a lot of emphasis on Financial Education, with what the chairman pointed at the outset. We are not trying to dictate the decisions that consumers make or they have to make their own decisions and choices and we would like to feel confident that they are in a position to know more and to make more responsible choices, not by my judgment, but that they can live with over the course of their lives. So in the Financial Education area, we are trying to focus on how can we deliver more information to consumers in an effective manner. Not an easy issue. People have been working at this for decades and we do a very poor job between these countries are preparing young people to go out into the world and deal with the fairly complicated Financial Decisions in an increasingly complex financial marketplace. We are trying to work with focus on school and work places and focus on faith communities. I was in North Carolina to speak to the National Baptist Ministers Convention recently, and we are going to be doing more at that time. We want groups of people around this country to focus on the importance of having people be in position to fend for themselves and stand up for themselves and to stand up for their rights and to see that they are making good decisions. That is quite a bit of work that we will be doing on that. We are working with the Financial Literacy Education Commission and other agencies and we are working to reach out to other offices to try to get more focus on this. Nobody seems to ever say that this is not important. They just dont always manage to prioritize it. We need to prioritize it and it has been important to Everything Else in this country as well. I would like to say that we have worked very closely with judy on the other side of the aisle. Yes. To start a bipartisan caucus here in congress 10 years ago. That number is close to 100. I recommend that you see who those congressmen are on both sides of the aisle. 50 republicans, 50 democrats. That is an excellent point. Together we cover the lots of people. And there are over 100 and the jump smart umbrella that have many banks and the u. S. Treasury and the u. S. Federal reserve. So together we need to move it up and do what you said, communicate to the institutions that you mention. Thats an excellent suggestion and i have heard from congressman stivers on this on how we can better deliver meaningful help to both young people and adults and i am very focused on this and hope to make headway over the next couple of years. I understand you are appointed to the president Advisory Council that the Financial Capability for Young Americans includes that we have a debt of College Student loans and i wish you would address that and help us. The time of the gentleman has expired and the chair would like to announce that there our votes on the floor and we just began with the intention to clear two more members, the gentleman from North Carolina, the gentleman from missouri and those who wish to go to the floor now if they would leave quietly and we will declare a recess and indulgent unturned indulgence of our witnesses. And we will reconvene as the votes have concluded on the floor. I would like to now recognize the chair of the subcommittee, the gentleman from North Carolina. Mr. Cordray, thank you for being here. You authorize the creation of academic advisory commission. Or council. I think it is called the Academic Research council, but yes, you authorize this and its something that existed before. Okay, now, does that Council Report the assistant director of research until recently it was reported to monaghan when asked that i wouldnt say that it is a research council. Its a broader perspective. Some of the charts, where were they reported . They are not reported to the bureau. They are focusing to spend some of their time helping us think about this. Okay, but this was a group that you gather and you decided that this was a good idea to have this . Again, this was before i was the director, but yes, it is a good idea. Okay, so have you heard of this Company Called ideas 42 . I believe that i have had heard that name. Okay, are you aware that the cfpb was awarded a Research Contract for 5 million . I believe that i have heard that. I dont know the details about. Was this a process and was was more of a Single Source contract . All of us here at the bureau goes through the regular laws and contracting guidelines. And we have been audited on that. I dont know offhand whether that Single Source contract was done according to the government contracting. I understand that, but Single Source contract that exists. Yes or if you could let us know whether that was competitive, how many digs are working for one company, and then furthermore, that full process so what were you aware that the founder of the ideas 42 company . No, i dont think i was aware of that. Okay, so he was the former head of research and assistant director of research at. That is right, he is no longer part of the bureau, but he is well regarded as an economist and wellknown in the field. Yes, and the question that i asked was about policies and procedures. A former staffer of yours, to get a 5 milliondollar contract without any appearance, he is the cofounder of the company. Go ahead, please respond at. Okay, i dont know the details of that they are all active. I dont believe that they are involved in the management of that company. Is the cofounder of that company at one point in time. Okay, just. Are you aware that for the six members of the Academic Research council have direct connections to ideas 42 . Again, i dont know what you mean by direct connection. Well, one is a founder and board member of ideas 42. One is an advisor and to our affiliates of that time. I dont know what you mean by advisor or affiliates and are you talking about symbols . Just. Im happy to have our staff followed with you. Im confident that everything was done properly in accordance with government rules to. Duties raise conflicts of interest when you have an advisory board, for the six members have a connection to a company that gets a direct contract to the cfpb for 5 million . And furthermore, it is apparently departed in the ensuing a fair amount of time between this and the last year. Okay. Well, look, i am quite confident that everything was done properly and that we have carefully had our staff to go through it. It appears that this will be a concern for me. It appears that this is an enormous conflict of interest and it raises greater concerns that we have with the policies and procedures that you have to avoid conflicts of interest with your staff and former members of your staff who have enormous connections, both with policy making and without a coolingoff period of any sort before they come back to receiving nobid contract, or maybe a competitive contract, we just dont know. So i would like to have answers to the question. That would be fine. The time has expired, we now recognize the gentleman from missouri. Thank you, mr. Chairman, for conducting the hearing. Thank you, mr. Cordray for your leadership. My questions are related to market shares. As you are aware, part of the issues concerning economic meltdown going into 2007 our shaky mortgages. There has been a full process of people who would normally be qualified for conventional mortgages and to subprime mortgages. I was wondering what has been the cfpbs record of presenting those kinds of abuses, especially now when it is difficult to obtain a market. I am wondering what has been your experience there and the leadership of cfpb, and how have you addressed a . Thank you for the question. That is one of the responsibilities that Congress Gave us that really highlighted this has as being very important to the country. It gave us the responsibility and a set of mortgage rules and a specific deadline for doing that. Both so the Mortgage Market could be protected and also so that it could be pushed forward and we can have certainty. We understand the various impacts. What we know is that this is part of the qualified mortgage rule, which leaves out some of the practices which were inappropriate, improper, they will were not necessarily illegal in this somewhat lacking regime that we had before the crisis and many were being offered by lenders that were not the supervisor overseen by anything. The other issue was the fearing of people who actually would have qualified for a prime rate mortgage. You know, they assumed the person across the table is being straightforward with them, but people actually had financing higher mortgages and then they had a kickback on that. Its totally inappropriate, and that is very exploitive of consumers. And it happens to millions of americans. There is a lone original compensation will and we have had two further round that that is meant to prevent the use of premiums, which is part of the bureaucratic terms and the point is to make sure that that cant happen again. We have been working hard to see the status and we are focused very much on the issue. Have you taken any actions and found that in the market . The players that have been in the market that have asperity in the high risk mortgages . We have. Typically not first while the regulation is important because going for forward that is not going to be possible. We are supervising around that issue every day. We did recently filed an action against a wonder that we found it was still engaged that is a sort of routine Business Model that is inappropriate and violates the law and we will proceed whenever we see that. Thank you for that response. Home mortgages and Student Loans are the two largest categories of outstanding Consumer Debt in america. We are still feeling the effect of the subprime mortgage crisis and are only beginning to understand the threat that excessive student debt possesses to the economy. What steps has the cfc taken to promote transparency of Student Loans and other financial problems . Well, it has been a big issue for us. The Student Loans issue has been addressed by congress and that is an excellent thing to addressed by us. We have worked around to provide Student Loans because many people needed that. They have taken him out for the first time as her sons and daughters have gone off to college or giving any other kind of further education, including Vocational School and community college. We have developed the Financial Aid they can actually be compared and contrasted with uniformity and all of this has been folded in our website and we want to allow teachers and parents and others to pay for this rationally. I want to invite you to help your constituents in this position of having to deal with this issue. Thank you for your responses. The time of the gentleman has expired. Committee stands in recess. [inaudible conversations] [inaudible conversations] the meeting will come to order and the chair recognizes the gentleman from california and the subcommittee for five minutes. Thank you, mr. Chairman. Good morning and welcome back. And a number of things that we are looking for have to do with obvious reasons that they contributed substantially to the 2008 financial meltdown. We are helping or hurting the problem or whatever, but the way to look into some of these areas is very evident. The question that i have and this is an area of lending which clearly did not include the financial crisis and nobody makes any assertion to that regard. There has been even through the 2008 and 2009 period, a relatively low delinquency rate, certainly relative to other forms of lending. There has been a lot of them, over 10 million per year. Including any service provider, they all make our loans and most of them aggressively and an extremely low number of Consumer Complaints and this includes a very low number of Consumer Complaints. As the old adage goes, its not broke, do not fix it. It would seem that that is an area that is not broke. But yet the cfpb has a couple of areas, one of which on a car loan application there is no indication of race or ethnicity, so there is no way even if a financial provider wants to discriminate, because they dont know who they are lending to. But yet at one point the agency considered introducing race and ethnicity, i guess you could discriminate on the basis into it. And i would just like to ask you broadly what are you doing in the area of car loans, and why . First of all, thank you. For asking about the subject and i would agree with what you said. First of all, i hail from ohio and we make cars in ohio and i would agree with you that for a number of years in the last decade we were not selling enough cars in the United States and its showing the average life of the car is now higher than 11 years, which is older than my car and fairly old. Second, we have been very appreciative to see this recovery in the auto market and it has been pronounced and significant and it is one of the things that is very much contributing to economic recovery and will continue to do so. In terms of releasing a bulletin of what you are referring to back in the spring, and the purpose of the bulletin was to remind lenders and congress was very specific about how they divided this here in this market in this segment. If the auto dealers are not subject to the jurisdiction of the cfpb, but others are, we both have to be careful not to exceed their jurisdiction. But to exercise this appropriately. One of the things we are reminding us that if we have a lending program, it is important for you to recognize that even though you are working with third parties, you still are responsible for your program and how it is carried out. That is the gist of that. There has been no indication in the wake of that been a number of months ago that any of that had affected the auto sales market which continues to be very robust. August was one of the past months that we have had in some time. We are mindful of the need for credit and the different players in the market. We are concerned that there are a fair number of complaints that do occur about potential discrimination as it is also true in mortgage lending. Nobody should have access to credit that is denied or be put at a higher price because of a background. We all appreciate and recognize that. And this includes the issues and concerns in this kind of market. Im happy to be in touch with you and your staff. The only thing i would say is that you cannot discriminate on the basis of something that you do not know. If we keep it that way, that is in a. The time of the gentleman has expired and the chair recognizes the gentleman from california, mr. Sherman. [inaudible conversations] the chair is happy to yield his time for five minutes. I am happy to go, mr. Chairman. The chairman is recognized from delaware. I would like to thank my colleague on the side for allowing me to go. I would like to thank the gentleman from delaware. I used to be down there before. Thank you for coming in. I have a number of questions, some of which you and i have spoken about before. But i would like to talk about a couple items and maybe follow up. Before you were confirmed about nonbank lending and the focus there particularly on payday lending and that kind of thing, could you just highlight a couple of things that you think that we need to continue to do that you are not satisfied with with respect to those lenders and nonbank lenders . When you say we, do you Mean Congress needs to do that . Well, yes. I think as it is throughout the Mortgage Market, there are competing considerations and one is that we need to make sure that some of the abuses that did occur, no question about it, they were part of what helped to create problems for the Mortgage Market in the economy and occurred in the subprime market that those dont occur again. The ability to do this is designed to root out some of those practices and this includes the premium positions with the original rule that was also designed to address. It is important to monitor as we go and make sure that we are actually addressing ms. Appropriately. At the same time, there is a nexus to credit issues to the low and moderate income americans which fall in the subprime market that we need to be mindful of as well. So something of a delicate balance. We try to address that by being very successful in hearing from many points of view and also having access to the kind of data that we talked about today that is critically important. We will do more so as we try to reform the Housing Finance system and keep credit available for folks that have difficulty. I appreciate your attention to that. On a related issue, mortgage foreclosure prevention, there was a piece today that you may have heard that talked about people that get themselves underwater, if you will, not getting access to the federal programs to help them. Have you looked at that . I noticed something that has been on your radar. The underwater mortgage issue, which is more than an issue in some parts of the country than others and some what pronounced in other parts of the country than others, it has been a major problem with economic recovery. First of all, the problem is easy a bit month by month as to how the Housing Market has recovered. Millions of americans who have been underwater who got their heads back above water, there are still millions who are not yet. What about the access to some of the federal programs and the idea was that the services were foreclosing before they had an opportunity to avail themselves. Yes. The ongoing changes being made with the program, we have jurisdiction over the mortgage services. So this is an intersection there. Changes being made to fha programs and others to try to address the underwater mortgage problem. It is a difficult problem and no easy fix by any means. We are continuing attention and i dont have any more specifics to say, other than, you know, we are working toward the day where we have addressed it sufficiently. Okay, so one of the issues that im trying to work at his college affordable. And we dont have private lenders in that regard and there is something there that jumps to mind. One of your points was more generic and the effects of having the ability of those young adults purchasing the economy. What else is structured and i have heard from a lot of students that they really didnt know what they were getting into. And the tensions and everything, what would you have there if anything . There are a variety of problems. Its a more than 1 billiondollar issue that is very significant and something that we need to have driven. It is part of the control of costs. And the bigger problem as well. Yes, but in terms of this, we have been noting increasing number of domino effects, the student loan albatross keeping him out of this with families to. My time is up, but this is something hopefully i can follow up with you. We appreciate it. The time of the gentleman has expired and we recognize the gentleman for five minutes. Thank you, mr. Chairman. We appreciate your comments with regards to the html, which we managed to get through. Now it is sitting in the senate, so if you are anxious to help, we would not neglect a phone call or letter or something to help us get this off the ball. I do find the things in the focus are things that congress focus on immediately and that they have addressed and they are happy to see that, if it needs to be addressed and we are happy to do that either way. Thank you very much. I would like to followup on a couple of things that have been stressful with regards to online lenders. It has come to my attention with a number of banks that have called our office. The fdic is really coming down on the banks who have online lenders who have accounts on clearing the thirdparty payments through them. In the wall street journal today there was a comment made by the department of justice spokesman who said, and i quote that they intend to choke on my lenders from the air that they need to survive. Are you aware of this activity going on with the fdic to choke on my lenders off to breathe and survive . I dont know about the characterization. But i do know that there is is war going on to try to understand the relationship between online lending and which understand is a very difficult Law Enforcement problem, and how that relates to the involvement and responsibility to the involvement. Mr. Cordray, this is primary with these nonbank lenders, is that correct . We have jurisdiction over nonbank lenders, you. As or more involvement . The state Attorney Generals Office has involvement. These are primary and federal regulators, right . Yes it is the fdic and doj, are they coordinating with you with regards to these efforts that they are undertaking to force these banks . We pretty much cordoning with the fdic. So they are coordinating with these efforts . There is work going on. So you are aware and working with them . Well is that correct . Trying to characterize the objective is one thing. We are working to try to understand how the online lenders were. It is pretty simple. It is like every other business where they used a clearinghouse for their transactions. From the banks i talk to, that is not the problem. We have this problem where there is this doj spokesman has a way of carrying out activities, they are out there for a sec period. So my question is what is your stance on online lending . My stance on online lending is that it should be done legally and should be done by folks who are licensed and qualified to do it and it should be done in compliance. Even if they are licensed and are behaving according to the law, you should have no problem with them being in business . Anyone behaving according to the law is behaving according to the law, and that is our job. I know that you get this, and you refer to a Bank Official and regulator. And that is our job is to make sure that they are complying with the law. But we have to investigate the facts. Mr. Cordray, i appreciate that you did your homework. But the problem is that you also dont need to be viewed reputed in taking action against people. If they are behaving according to law, we dont try to drive them out of business and that is our concern. No, one of the things we are discussing is the National Charter that would give you the ability to then enforce it on a national basis. Would you support Something Like that . Are you talking about a National Charter . Yes. It would alleviate the statebystate situation. According to swallow or whatever this is a way to solve your problem. I would have to look at it. I dont have an answer today. The chair now recognizes the gentleman from california, mr. Sherman. I want to pick up we want to talk about the unnecessary privacy notifications and mr. Cordray, is there anyway any way that you could in effect, implement that or do we have to rely on the house of the United States senate to move on that . We have been working on this issue and looking at it. And the top of our list includes streamlining things with banks and others and we tend to agree that there is often more disclosure in and the consumer benefits from and its burdensome. Our senses there is a lot we can do by regulation. It may or may not be everything and congress can always do what they want within the constitution. I would be happy to have more conversations with you. But i think that we can make considerable headwind. Allall right, i will ask theo do all you can to deal with this with regulations and that we can get a move on the bill. We have passes through the committee. We are happy to work with you and we are thinking about what we can do with regulations. See if that fall short of the regulation. We are happy to work with you on the legislation to think about how to craft that and whether there are particular technical issues that we can help you with. To know the gentleman from virginia is working on the issue. This makes the Credit Rating agencies that are attacking homeowners as if they went through a foreclosure simply because they did a short sale. A short sale is not an a or smiley face Financial Institution. But it is not a foreclosure either. What can you do to make sure that the Credit Rating agencies, just because you began the foreclosure process and go to a short sale does not mean that you have a foreclosure. Thank you for the question, as you know, i think we have worked on quite a bit this summer and its quite a complicated issues that involves lots of different actions. We thought it was important and it is wrong for people that are not foreclosed on and we are actually encouraging short sales with a foreclosure and their credit record. We work very closely with fannie mae and the Credit Reporting agency so this will no longer be a problem. It was a very complicated undertaking, and im happy to report that we were able to push and pressure significantly with senator nelson and others. I am pleased at the work are static, which was great work and hard work and important work. Is this problem solved, or are you just moving in right direction . The problem is being solved. It involves changes in the computer processes with fannie mae and one of the Credit Reporting agencies, and they are making those changes and committed to making those changes. We are Monitoring Monitoring them to make sure that they are being handled correctly. The remittances in my district, according to my district, a number of banks and Credit Unions have decided to just get out of the remittance business. What can you do to keep a high level of competition, and at the same time, protect them . Several things. There is a high level of competition and it is an area where technology is changing dramatically. Prepaid cards remit money and phones may be a method of permitting money in some areas. Online and paypal and others are methods of remitting. There are a lot of competition trying to separate all the cause and effect. We did go back after we had finalize that rule when we were reluctant to think of further changes and we recognize that they had three significant problems. They had a problem of being responsible for errors when they didnt do anything wrong. They had a problem with trying to understand what these were being imposed in some other countries that but they didnt control. And they had a problem with having to understand taxes that might be imposed and were not transparent to them. We ran back and reopen the rule and we made changes and addressed all three of these concerns. We have heard very little further anxiety about anything and this is now an area that has sumer protection. And that is imposing some costs and there will be some changes in the market. We are open to hearing more from people if they have specific concerns of. The time of the gentleman has expired and the chair recognizes the gentleman from michigan, please go ahead. Thank you, sir. I have a couple of things that i want to say about College Tuition and the online loan situation. I would like to touch a little bit on the queue am rules and ts the Title Insurance, and this includes the triggers. It is not a clue to do not, however, and since federal insurance rates are filed by underwriters and approved at the state level, is a really any reason to differentiate between affiliated versus unaffiliated insurance, Title Insurance . Think your question. It has been raised to me by a number of folks, including those that were affected by this with stakeholders. Im from michigan, by the way, and we can get into a debate about the buildings and cars. Michigan is home to quicken and is also home to my former real estate firm, woodwind schmick, which has its own Title Insurance. Five star and the white house insurance. Its big, but its also small. Yes. So that 3 points apiece, that was imposed by congress and we had to try to figure out how to apply it, which we did. Have you considered changing that . It is a pretty strong statement in the law and there are affiliates where there was some abuses during people and so forth and there are other affiliates were with a synergy that creates. So we did our best to kind of write the rules within an understanding of those polar opposite views of the affiliates, which have some validity. We are happy to think further about these things and in response to that request i have been talking about the staff. It seems to me, certainly, it seems it would be. I fail to see the true benefit of the consumer at the Title Insurance is purchased through an affiliate or an affiliate. Mr. Meeks and i are talking a hospital 1077, which was included as well. We would be happy to work with you to provide technical assistance. I would like your support. Two if this is something we need to have as a nation, and we need to figure out why something is regulated by the state and has a cost attached to it, we are penalizing people that can deliver it more efficiently in my view. I appreciate your looking further into the. Thank you. I look forward to that. The other element that i have, and i think i wrote down this quote accurately, the response to some of the discussion about Student Loans, losing control of tuition costs, which is beyond the cfpb. Mr. Chairman, i am glad that we have found an area that is beyond the control of the cfpb. Its not as powerful as people seem to think it is. Is still pretty darn powerful. So i am concerned about that. As a father of a couple of high schoolers, i am keenly aware of that. I just want to make sure that we are not going in and shooting the messenger. His parents are making decisions and students are making decisions, they need to have their eyes wide open and it should not be anything hidden from them. But the system shouldnt be penalized for providing opportunities for them to go after College Education that they are looking for, whether they believe that they need to be going to the ivy league versus the community college, that is another thing. And i did have a last little bit here. As we were talking about this, i am a bit concerned about an uneven Playing Field being created if 50 of all online lending occurs offshore, and we will start putting this is a regulation that will really hamper our us. Do you count the native american Reservation Companies that are doing this as well as offshore . What you mean by count . Would you categorize them beyond her control . They are not beyond our control. I think it is well established in federal law that federal agencies and the federal government can regulate the Business Activities affiliated. There is some question whether the state can do this, so it has been a somewhat difficult area. Outside of the United States it is a particular problem that mirrors this and some people will them as two other states as well and that is a problem. The time of the time and has expired. Thank you. Paterno recognizes the next dominant. Thank you, mr. Chairman. Id like to compliment you on the fine job that you are doing and we look forward to working with you. Well couple of concerns that we would like to call to your attention. As the Ranking Member indicated, over a District Court period, there seems to be a misunderstanding about what we do. I do not misunderstand that. Okay, thank you. Over the district work period many of us decided that we would join with some of the Community Banks and Smaller Banks. I visited at least three of them. Upon visiting with them, i was amazed at some of the things that were presented to me. To be very honest with you, the term paperwork is a nebulous term until you have an opportunity to see what paperwork actually looks like from the point of view of a smaller bank and an institution that has one person possibly multitasking and doing more within us, all proper court, but after having this opportunity to visit with a smaller bank, many keep loans on their portfolios and i am absolutely convinced that they need some help. Im going to work with the Ranking Member to do all that i can do to provide assistance. I just want to add my voice to her voice and letting you know that i believe that there really is a problem that needs our attention with a smaller Community Banks. As the weeks and months go on, i do ask that they provide proposed solutions. And i will start to get these proposed solutions and then i will visit with the Ranking Member for passing them on, and i hope that we will be able to put some thought as to how we can provide this going forward. Moving to several things that have been called to my attention. A second appraisal for smaller lenders under 250,000, how are you proposing to address this . That is an example, congressman, as you share your point of view about the many institutional banks that are smaller, they really were not at all products of the financial crisis and we should not be oppressive and our response to how this may affect their operations. So we did offer special provisions for the qualified mortgage rule and those who keep them in portfolios are deemed to be qualified with other aspects of the rule and have a safe harbor from litigation, which is designed to help them feel confident and continue to make the kind of loans that they make that work very well and support our community. That is essentially how we are trying to address that. Im always interested to hear more from the smaller institutions and that is why we have a credit union and make Advisory Council, so we can know how we are affecting them which otherwise we dont know because we dont examine them directly. Anything you would like to pass on to us, or can hear from you about, and we are probably hearing about already as well. Thank you. Let me move forward to the counseling homeownership. Many of these persons have networks that are fairly substantial