Question, is it a problem . Is it not really a problem . What we do see is that every month of last year, from the Census Bureau ser survey data, manufactured housing lending was up from the month before. And the leading manufactured housing manufacturers are quite profitable. So i dont know what to make of some of the concerns people are raising to me. But i will say that this issue of costs on a smaller loan, i think, is a universal issue and problem and one that maybe we should be thinking about whether the thresholds are exactly right. Thank you for the time and i would close by saying i pleesht you looking fa data, and i understand that in a growing economy, youre likely to see more people doing these types of things. Weve seen some data that shows that numbers of these people are unable to be served and theyre ending up paying more for rental housing than they could be paying for actually purchasing, again, a lowercost home of either type, whether its conventional areor manufactured that doesnt stand opt malfrom anybodys standpoint. I just want to kind of begin with where we are with data collection, because ive listened, and i think in some ways i feel like were ships passing through the night here. And not really hearing. You do not require the transfer of personally identified information, other than to do Consumer Services based on a complaint, is that what im hearing . Thats generally correct, although an enforcement in supervision matters where were going to be getting money back to consumers, we ultimately will immediate to have information to get the money back to consumers. These wouldnt be individual complaints. This would be kind of a broad, sweeping kind of investigation where you, then would require individual information . So, for example, i could name names of institutions that are public. You will mat lay we have to get money back to consumers. Either we can work the institution i think in terms of your day at that claex, the only way would you have personally identified data would be if it were necessary to serve the consumer either in a broad complaint or an individual complaint. I believe thats exactly correct. Theres no purpose of me having it otherwise. It just gets in my way and my teams way in terms of doing our work. Do institutions send you a bulk of data that actually has that information with it requiring you to scrub it or do you always get information thats been scrubbed and where Social Security numbers and personally identifiable information has been removed . So on that what i would like to do is have our staff come and brief your staff i think theres enough from here to report back to the committee would be very helpful. . We did do that. It is typically our aim, and i believe its the case in all circumstances, and im hesitant to say all. I want to make one point on this, which is fromming to me where we are deeply concerned about what you have, we should be equally deeply concerned about the Cyber Security of the information where it resides which is with the companies that you access every day, and so they are going to have any breach of their data is much more damaging than access to your, to your data that is being used for market analysis. Sure, target, home depot, Social Security, thats problematic. . Another thing that would be helpful, and obviously we have found great response from your itsy on whats rural and what isnt, but im curious as to the percentage of land mass in this country that youve determined is ifn fact rural. So if you could get that to me that would be great. Also on senator testers concern about consultation, i would be interested in consultation with tribes as well. Thats part of an overall scheme in a governmenttogovernment relationship we need all entities to understand what that means. And i know you have me coming to visit you. And i do have to say that where we can disagree i think your personal integrity is unimpeachable. And i think youre doing a very difficult job, director and i want to thank you for your service. Someone with your credentials, having i believe clerked for the Supreme Court at one point with your great academic background is someone who is extraordinarily valuable and i of course. Partial to past ags, so were all good. I want to reiterate some of the points about where were at with the people were trying to protect. What were all trying to get at is how do you balance presenting the consumer against access to necessary credit whether it is in smalldollar lending whether its in manufactured housing, whether it is just in access to Rural Communities or nativeamerican communities to the market. I think theres a balance there. And i know ive told you frequently my story. I was probably one of the first people who got beat up by trying to shut down payday lending and predatory lending, and i learned something in that process, which are, sometimes people need diapers, and sometimes they need gas, and they have a flat tire and they cant fix it. And these are folks living on the margin. So i understand the need to protect people. But i also understand the need to have some form of smalldallassmall smalldollar, shorttestimony lend short term lending. How do we achieve that and how do you as the director address the concerns that we have, which is lets give people access to credit. It helps build their credit. It helps build america but lets also protect them. Thats a tough balance. It is. We first saw this issue with the mortgage rules. In the doddfrank act they passed certain things we were required to do. And the underwriting had deteriorated. By the time we had come to write the rules things had crashed. Credit was very tight. It was a hugely different situation. And, so, as we wrote those rules, we really became very keenly aware, face to face with this problem of how do you balance protections, which we want with access to credit, which we do not want to choke off that was something we tried to balance. I think we did prettys something were constantly monitoring and trying to think about. Same thing now in these smalldollar rules. We know people have a demand for smalldollar credit. Theyve had it for over 100 years, and they get that demand serviced in various ways. And some are more responsible and some are less responsible but people have a demand. And we cant choke off a supply to them. But at the same time, we are concerned about this issue of the debt trap. People ending up thinking theyre getting in and getting out, but many of them end up rolling over and getting stuck at very high cost over a long period of time. And thats the issue were trying to address. Now whether the Industry Business model relies on that to subsidize the singledemand loans, im not entirely clear on that. Its something were trying to figure out as were working on these rules, but i have the same objective as youve described. People need to have access to money, and not everybody has an uhical or sister or motherinlaw that they can go to for 300 or 500. And if theyve done it once or twice, they may not be able to do did a third time. At the same time, we dont want people to end up in products that hurt them further. I dont know that im the right person to say what all the right products are. There are certain wrong products we want to rein in a bit. How to get there is a complex difficult issue and im hopeful and were working hard to try to understand it enough to get it right. Thank you mr. Chairman. Thank you senator. I think senator heitkamp raised an important issue. We dont want to drive these small, marginal consumer underground, where there is no regulation. Because thats what weve had before. And i believe that goes right to the thrust of her question. You know, how do we do this without overregulating this and how do we have abscess to some type of credit for these because there will be credit. Its a question, is it going to be little or illegal. And now we can have our senator cotton coming up we can have that ivy League Debate that you referred to. Senator cotton . Thank you, mr. Chairman. Thank you director for appearing before us. I want to return to a topic that senator corker touched upon, affordable housing. Since hud data indicates there may not be a single county in this country that has affordable housing, that represents the rural county or state where i live, there are not a lot of new Single Family homes being built. There is not a large stock of multifamily Housing Units which is why many find manufactured housing as the most affordable option they have. They end up paying less on a mortgage for a manufactured home than they would for a very limited supply of rental stock. As you describe, theres a basic math problem. It takes a certain amount of time and resources to process any loan, whether the loan is 40,000 or 400,000 or 4 million. And over a bigger loan, thats that cost is spread out over a bigger base, and therefore the percentage costs dont appear to be as high. Over a smaller loan like you have for manufactured housing, its a much smaller base to spread out, so it appears to be much higher, even though thats the preference of the consumer and you have many Financial Institutions willing to make those loans. You have regulatory flexibility under the doddfrank act to raise those percentage rate, yet, you havent used that yet. Could you explain why you havent used that and maybe if youre looking ahead to using it to grant some relief for these families and lenders . We did consider this and pretty carefully with a lot of input at the time we adopted our mortgage rules. Our big set of mortgage rules in 2013. And this issue was raised. And the 3 was not seen as appropriate for loans under 100,000. And it went to 4 at some levels, 5 at another levels and other lower levels. That was an effort to address the issue that youre raying that i raising as a very legitimate issue. Whether we got them right, whether we should reconsider them just as we reconsider about the rural and underserved issue is a fair point and one that i will take back from this hearing. I do remain concerned that credit at the smaller, at the lower end, dollar end of the spectrum is tight. It is tight. Its tight for people also often who have lower Credit Scores and more difficult to access the credit. I dont want to try to pretend to redo underwriting thats being done by these institutions on that. But whether those numbers are set at the right level. Whether 100,000 is the right level are things im not entirely clear on. I think we should be looking at some more we should have a fruitful discourse on whether there maybe should be changes there. . Well, thank you for that. In your reference that you have seen some encouraging data which ive seen as well. I think thats limited to the sale of new manufactured housing. I see. So yes, there is still a robust market for refinancing and secondary sales of manufactured housing obviously doesnt have the same lifetime that Single Family housing does. But oftentimes families need manufactured housing at a time in their life when theyre going through a lot of change. When theyre newly married. When they have new children theyre going through economic change hopefully getting higher wages, moving up the economic ladder and moving into a different kind of home when theres another family who would be willing to buy their manufactured home. Director id like to turn to another question now. Last year you brought an enforcement action against a mortgage lender, phh. You went in front of an Administrative Law judge. Rule four issued a judgment of 6. 4 million. You returned that judgment and imposed a fine of 109 million. Could you explain your thinking both why you pursued an Administrative Law judge as opposed to an article iii court and what went into your decision to overturn your own alj and impose a fine seven times his initial judgment . Its a discretionary decision. Weve used Administrative Law judges fairleigh sparingly, except for consent orders. Weve been in court and we are in court in many many matters. It does one difference is that the alj route can be faster and can be more streamlined. You know, whether thats a good or bad thing is often in the eye of the beholder. That is, that happened to be the approach that was used in this particular matter. As for the decision, that decision is published. And the reasons for it are set out on their face. I think it was like maybe a 36page decision so its lengthy. The particular point that youre getting at had to do with whether under the law and this is not an obvious point and the Administrative Law judge saw it one way. I saw another way. If you violate the respa statute, is the right relief only contracts that violated the respa date . Or is if payments made after a certain date on contracts that violated the respa statute for that day has to do with limitations period here. Not an obvious point, but its a point that once you decide it one way orts other maybes this huge difference in terms of the a the relief. That is the sole reason for it. I thought the law pretty clearly was one way. Others may see it differently but we we try to come to the right result as we understood the law. Thank you for that explanation, director. Youre right that the implication of my question, the concern im driving at is not necessarily even about that specific decision but just about the structure of decision making. Yep. Not even within your own bureau but within independent agencies. Your own bureau has certain features that exacerbates the problem. That youre a single director as opposed to a fivemember commission. This is not a reflection on you or any future director, these are concerns that i have about the future bureau. Madison said that the accumulation of all powers may very justly pronounce the definition of tyranny. So im going to continue to have these concerns. Thats fine. And having said that im here in front of you here and consistently and happy to be speaking to you at any time i regard that legislative oversight as very meaningful and very vigorous. That decision is subject to appeal. It is being appealed to a court. I hope that they will see the case the same way i did and think that i did things right. If they disagree, theyll tell us sewo and well comply by that ruling. And were fwhad to you have here and glad to have judicial review. But initial fact finders are different than fact finders at bureaus like yours. You are not elected, different in people up here when we have to answer to people that we serve back home for the wisdom of those rules. Fair enough. . Not a specific comment tear eye on this particular case or anything that youve done, but i have real reservations about the structure of this bureau. Senator mark li. I want to thank you for having a watchdog fighting for consumers and fairness in financial transactions. In your testimony, you note that the bureau resulted in more than 10. 1 billion in relief for 17 million consumers. Is it my understanding this is specific funds that come from addressing predatory practices that has been returned to 17 million families across america . Yeah. It takes different forms. Some of it is direct restitution. Some of if is uncompensated victims. Some of it is say, mortgage relief. Some of it is debt that they otherwise would be required to pay and might be subject to further costs and Court Proceedings that is forgiven and wiped from the books. But yes, its meaningful relief for american consumers. And the other point that senator warren has made to me thats wrort making is every time we then correct practices, the same things dont happen going forward, and you can expect the same money being saved each year in the future but its hard to quantify that. It is hard to quantify, but every time a consumer gets a fair Mortgage Loan rather than a predatory one a great deal of help has been created in terms of a wealthbuilding enterprise versus a wealthsfriping one. I want to turn to the subject of payday loans, and youre engaged in laying out a policy framework not yet a draft regulation and taking feedback on it. In oregon we proceeded to establish a pretty rigorous framework, reestablishing a user cap on the full range of loans consumer loans, payday loans, because wed seen the migration of one area to another where states have tried to tackle the 500 Interest Rate in payday loans. But we see aggressive outreach by Payday Loan Companies to solicit people online and to do so outside the framework of state law. And in that regard about once a week i get a text message, like this one that came the other day, dillen, i dont know who dillen is, but whoever dillen is, hes one click away in a predatory loan. Dillen do you need some extra dollars . Bad credit is okay. Approved in four minutes. Click here. I am absolutely convinced this is not a payday lend earn operating under the state law. Its probably offshore as most online are. And the challenge is that with the ability to reach out to phones through Text Messages in this case, i also receive phone calls for dillen. If dillens out there and wants his phone messages, please, he can contact me. Then respond to this and say, great this is convenient, i dont have to go down to the brick and mortar Payday Loan Store and by the way, we still have those stores in oregon even though they operate at 36 Interest Rate. Citizens still have access to credit when they need it at a narrate, but theyre getting ensnared by these online solicitations. The way that, the reason this works is because these companies are able to use Electronic Fund transfers or remotely generate the checks to essentially once they have the number of the account of the individual, they simply reach in and grab the money, even though their loan is in violation of the law. How are we going to stop this . First of all, you may need a better spam filter on your phone, although, maybe youre picking up some good intel this way. Second, the online lending is a particularly acute problem for any enforcement regime. I saw it as attorney general in ohio. I hear about it from our colleagues at the Justice Department who battle with it and help us especially when were trying to deal with something thats international in scope like a scam we