Appropriation hearing but i believe the president has sent us two good nominees. We waited a long time on the vice chairman, supervision for the fed. I hope the hearing goes well and we can expedite these nominees and get them in place, thank you. Thank you, senator shelby. The hearing will come to order. We will consider the nominations for the comptroller of currency, joseph otting and Randal Quarles to be a member of the board of governors of the Federal Reserve system and vice chairman for supervision of the board of governors of the Federal Reserve system. Welcome to both of you and congratulations on your nominations to these offices. You have friends and family sitting with you and welcome them here as well. These positions are critically important to assure a safe, sound, vibrant Financial System. We are fortunate have two qualified individuals to consider for these posts. Joseph otting bring particular understanding of the Banking System from a long career in national service. As head of the occ joseph otting would oversee supervision of all National Banks and federal savings associations as well as federal branches and agencies of foreign banks. Having served in leadership positions at various Financial Institutions in the past i am confident joseph otting will bring strong leadership. Randal quarles has a wealth of government and private sector experience dealing with domestic and International Financial markets. He is no stranger to Public Service having previously served in multiple top posts in the Treasury Department. As vice chairman for supervision, Randal Quarles would play a key role in developing regulatory and supervisory policy for the Federal Reserve system. President obama never designated anyone for this role. Instead former fed governor dan tarullo acted as they facto vice chairman of supervision in many ways including by chairing the Federal Reserve Board Committee on supervision and regulation, overseeing the Large Institution Supervision Coordinating Committee and representing the fed at the Financial Stability board and in basal among other functions. In february chair yellen said she expected to Donald Trumps nominee for vice chairman for supervision will have the same responsibilities that governor tarullo had including hitting the Federal Reserve committee on supervision and regulation and representing the fed in the financials ability board in basal. I look forward to working with Randal Quarles in this effort. Congratulations again on your nominations and thank you and your families for your willingness to serve. Senator brown. Thank you, mister chairman. Welcome to the witnesses. Appreciate you holding the syrians witnesses for their Public Service. This committee under the previous chairman, not the gentleman i respect sitting next to me, waited two years, never did hearings on two Federal Reserve nominees, i am glad mister chairman and the democrats are willing to move forward on the nominee of the president of the party that is not ours unlike what this body, this committee failed to do for two long years. You are seeking, the two of you are seeking to follow the footstep of two people, the fed and occ dedicated Public Servants and did a great deal to make our Financial System saver. Randal quarles served as treasury undersecretary for domestic finance leading up to the 2008 financial crisis. His job was to coordinate oversight of the financial industry, ensure government watchdog looking out for the best interests of american taxpayers. Many of his statements leading up to the crisis lead me to wonder if he was asleep at the switch or willfully turning a blind eye to wall street abuses and excesses. Contrary to mister Randal Quarless predictions in 2006, the economy was, quote, not as he said strong. The Financial Sector was not as he said healthy. And they are not wellcapitalized. As a result taxpayers pay billions to bail these banks out. Randal quarles and his company turn a profit off of the crisis. Exotic mortgage products were not confined to as he said grand individuals that can manage a sizable increase in their monthly mortgage payment. And schoolteachers in cleveland, ohio, Service Members in Wrightpatterson Air Force base in dayton, ohio. Financial crisis devastated the ohio families that lost their jobs and savings. For wealthy bank executives, private Equity Investors, the crisis was hardly lifechanging. And flipping failing banks on rockbottom prices and foreclosing on working families while raking in taxpayer dollars. My wife and i live in zip code 4101 and 2007, the first half of that year, they were foreclosed on any zip code in the United States of america. I see the aftermath that every day in ohio which is four or five days every week. Joseph ottings bank made money by kicking seniors out of their homes and turned around and said the government made them do it. Randal quarles, the role of the government as a player in the Financial Sector rather than a referee. These sentiments would ring less hollow had their banks not accepted to it have billion dollars from fdi to protect them from offices. They believe in government help her wall street, just not families in zip code 44105. They were forced to step in and share losses in failed banks, and preventing bigger hit on the insurance fund. Mister joseph otting and Randal Quarles stepped in and made money after those banks were propped up by taxpayers. According to the Columbus Dispatch, the most conservative newspaper, they were foreclosed on by one w. In our 6 largest counties alone from 2009 to 2015 while joseph otting served as ceo. After he was held accountable for robosignings by the office of supervision, predecessor to the agency he now hopes to run, my concern is and whether todays nominees dont have a wealth of experience, they do. Running working for banks, my concern is whether they will work for american taxpayers and working families. We made a lot of progress in the seven years since we passed wall street reform, one fifth of the rules remain unfinished. Instead of finishing the job, wall streets allies try to take us backward, weakening or eliminating important safeguards. We see this in some agencies with reform from their agendas and attack other agendas, this collective amnesia reminds me of 2006, big banks make record profits yet they claim they are besieged by their overseers, the regulators. The banks refrain is expected but not acceptable for referees to join the chorus. Look forward to hearing from our witnesses. Will the nominees please rise and raise your right hand so we will administer the oath. This constitutes two questions. First, do you swear or affirm that the testimony you are about to give is the truth, the whole truth and nothing but the truth so help you god . And then secondly, do you agree to appear and testify before any duly constituted committee of the senate . Thank you. Take your seats. Your written statements will be made part of the record in its entirety, you have been advised, we allocate you five minutes for an interrupter division trajectory statement. I remind my colleagues on the committee and the time for questioning his 5 minutes and ask cooperation of all to maintain those time frames. Before you begin your statement, i invite you if you would like to do so to introduce any of your family members who are in attendance. Joseph otting may proceed. Thank you, chairman crapo. I would like to introduce my wife and best friend who is sitting behind me. Sometimes you get lucky life and im forever grateful we had the opportunity to meet. She has always been my focus in life and for that i love you. I recognize bonnies father, Carmen Espinoza who could not be with us today due to his health. Herman is a first generation immigrant who came to the United States to pursue the American Dream so his family could live a better life. One of his proudest moments was when he was granted his us citizenship. My mother is with us today also. She has been my Guiding Light in life instilling in me a strong moral compass and helping me appreciate the values of sound family life. She taught school for 35 years and was an inspiration to many students. I would also like to acknowledge my late father james and my late mother jesse espinoza. My father taught me many valuable lessons in life not the least where his business acumen, focus on family and his commitment to serving his community. From bonnies mother and kindness to others and love can solve many things. Lastly i would like to introduce my sister julia and my brother james who are with us today. Over the years we have learned the value of love, companionship and the ability to be dependent on each other. Thank you very much. Welcome to your family. You may begin your statement. Chairman crapo, Ranking Member brown and members of the committee, it is an honor to appear before you today. I am grateful to be nominated by donald trump to be comptroller of currency and is confirmed for this role i will be honored to serve the citizens of the United States of america. Thank you to all the Committee Members i had an opportunity to meet. I enjoyed meeting you for the first time and to get reacquainted with others but most importantly i appreciated the opportunity to learn more about issues you feel are important to the people of america. For those i did not get to meet him if confirmed i look forward to meeting, working with you in the future. I grew up in a midwestern family where my father was an entrepreneurial business person and my mother was a schoolteacher. At the young age of 10 i learned the value of business client relationships, leadership for my father while working at his business hes. Often doing the job no one else wanted to do. I observed how my father, hard work, willingness to take risks and Family Support lead to success. I learned from my mother who taught school during the day, raise three children and went to college at night, that hard work, dedication can make a difference. I studied at the university of Northern Iowa following a Family Tradition of my mother, sister and brother to the university. During the summer and holiday brief my father would have me work in his businesses and arranged other roles that included working at an electrical dam for regional utility, commercial construction and bakery, all great roles for building character and appreciation for people and their individuality and how leadership can make the difference. After college i was fortunate to be chosen to be part of bank of americas Training Program in california. It was an experience that forever changed my life that i gained insight into the Banking System from the other side of the table and discovered how banks help consumers and businesses with services, deposits and loans. In this industry i spent the next 34 years of my life learning the importance of serving employees, the community, customers and shareholders. My Banking Experience allowed me to work for one of the largest banks in the United States, two will respect and Regional Banks and a Community Bank. I touched virtually every segment of the industry including serving consumers, businesses, trust functions, private banking, investment services, human resources, compliance audit, treasury, Financial Management and operations. This experience provides the broad base of knowledge that would be helpful and insightful if i was chosen to be the comptroller. In 2010 i decided to leave an executive position as an established Financial Institution because i felt Southern California was in need of a Hometown Bank. When i approached the idea i knew it would be challenging and determined is a lot of work but ultimately an achievement for myself and the company. With the assistance of many dedicated men and women we were able to create the largest Hometown Bank in Southern California. It was able to grow beyond this being a Mortgage Company and serving the needs of local businesses, families and consumers. Hopefully helping build this company is something i will remain proud of. After a successful merger in 2015 i left the organization and became an entrepreneurial person returning to my roots in real estate and small business. The mission of the occ is to ensure National Banks, federal savings and loans and operations of International Base operate in a safe manner, providing fair access to Financial Services, treat customers fairly and comply with laws and regulations. If confirmed as comptroller of currency and given an opportunity to lead the men and women of the agency i pledge to honor the occ mission in cooperative work with this committee and all members of congress. Thank you for your time today, i look forward to answering your questions the committee may have and honored to share this hearing with Randal Quarles. Thank you. Randal quarles, you may begin. Thank you, mister chairman. I would like to introduce my wife who is with today, my parents, ralph and beverly, and our niece who is interning on the hill and can be with us today. We welcome your family. My statement. Please go forward. Chairman crapo, Ranking Member brown, members of the committee, thank you for this opportunity to appear before you today. I am honored that the president has nominated me to serve as member of the board of governors of the Federal Reserve system and the boards vicechairman of supervision and grateful for the privilege of your consideration. Im also very grateful for the support not only of my wife and family who are here but our three children who have put up with a lot in their lives from their fathers Public Service. We occupy a central position in the countrys policy infrastructure for promoting a Strong Economy and stability of the Financial System and supporting robust job growth in context i can assure the committee, to be confirmed as member of the Federal Reserve, strongly committed to all these objectives. The specific position i have been nominated for, vicechairman of supervision has a particular role in ensuring the safety, soundness and efficient operation of the Financial System. Is recognized by the treasury report regulatory policies and acted to improve safety and soundness of the system, after the first wave of reform with benefit of experience, reflection comest and refinements will be in order. Former governor dan tarullo, one of the principal architect of many of these reforms said as much himself in the valedictory speech on the occasion of his leaving is a board stating there are clearly some changes that can be made without endangering Financial Stability. The key question is ensuring whether we refine this every time we do so while maintaining robust resilience of the system shocks. I believe i am well qualified to undertake that role. As this committee knows, with the Financial Sector from many different points of view, im a practicing lawyer, the granular technicalities of the most complex expects of the regulatory system, i have been an investor in Small Community banks, and challenges those institutions face and a financial regulatory policy maker under two president s, my first tour of duty in Public Service was during a similar period of response after financial crisis arriving in 1991 during the cleanup saving the savingsandloan crisis and the fdic insurance fund. This experience gave me substantive insights into issues the federal vicechairman will supervision will face it also reinforced my commitment to the most important characteristic of a policymaker. The constraints on understanding of complex systems, humble about the fallibility of our judgments and humble about these views, and the most datadriven and analytical conclusions. And as we approach every task the continual openness to input from every source, i look forward to working with members of this committee on both sides of the aisle and staff to understand the challenges the face the Financial System as they evolve over time. Thank you for the honor of this hearing and i look forward to answering your questions. Thank you, Randal Quarles. I will start with you first. Immediately prior to leaving the fed, former governor tarullo gave a speech highlighting areas where regulatory relief to be appropriate in his opinion. Former governor tarullo said the 50 billion threshold should be changed, the volcker rule is too complicated and may be having a deleterious effect on marketmaking particularly for some less liquid issues. 3, Community Banks should have a much simpler capital regime. 4, the supplementary leverage ratio should be revisited. 5, the 10 billion asset threshold for company run stress tests is too low. And 6, the Federal Reserve should consider eliminating the qualitative portion of c card for all banks. Do you agree with all of these recommendations . I actually do agree with all of those recommendations. I think they are very much in line with i would approach regulation. The second part of this question may be something you want to take some time to think about and respond later but if you have any ideas right now are there any additional areas of regulatory relief you think it would be appropriate to look at . I think that one important area that wasnt mentioned in that list is transparency. I would want that to be a of the Federal Reserves activities where i confirm this position. I think that both as appropriate relationship between the regulator and the regulated and a matter of improving the content of regulation it is important for regulators to be clear about the principles that are driving their decisions and the expectations they have for the regulated system. An example of that although it is only one example is lack of transparency that has surrounded the stress test up to now so i think Federal Reserve can look at being more transparent about those activities and do it in a way that does not in any way reduce the effectiveness of those tests. I appreciate that. You have further observations, i welcome you relaying them to us. Joseph otting. I enjoyed meeting with you last weekend at our meeting we spent some time discussing your time as an executive at one w. There has been some controversy about one w. Would you like to take a minute or two to respond to some of the questions that have been raised, to describe for the committee your tenure at one west . Thank you, chairman crapo. In 2008,y failed and was taken over by the fdic and operated until march 2009. In march 2009 an Investment Group led by Steve Mnuchin acquired the bank and rename the entity one west bank. This was a very difficult time in american middle of the financial crisis. The Investment Group but it because they believed in american recovery that we could rebuild and create a Regional Bank and save thousands of jobs. Going into any mac can only be described how a fireman feels when he gets to the front door of a 5 alarm fire. The bank had 200,000 loans in default, the men and women of onewest were working to save the homes of thousands of americans. Some of those who focus on the homes that were lost, this is clearly a tragedy, we like to focus on the 80 of the 160,000 homes that were saved. And americans in those homes today. We did this by having creative initiatives. We were the first to offer principle forgiveness, we lowered interest rates, modified payments and moved principle to the back so people could afford their homes. Another area the bank received attention with servicing of mortgages. They consumed a large portfolio of nonservicing of mortgages where we were doing it as a third party service. These portfolios had restrictive agreements on what bank actions they could take regarding those agreements. In april 2011, onewest offered large Mortgage Services to sign a Consent Order to review and observe service standards. A significant part of this order was review of foreclosures and modifications in 20092010. For onewest this involved reviewing 175,000 borrowers in foreclosure. Ultimately onewest was the only bank, one out of 14 that looked back on the foreclosures. This was completed by an independent thirdparty with engagement and supervision of the occ. Results proved onewest had a low error rate. Independent government reviews were demonstrated that we had the most effective loan modification of any program. These are facts available in the public arena. We took litigation efforts against the holders of the mortgages to allow us similar actions against their portfolios. For any errors identified and there were errors but they were small basis points, the bank made full restitution to the borrowers to the tune of 9 million. If not for hardworking employees of onewest bank i believe many more foreclosures would have happened, numerous job losses would have occurred in Southern California consumers and businesses would have been left without an Additional Bank that would provide loans and products and services. Thank you for allowing me to address you. Senator brown. I will start with you and thank you for that explanation. I want to pursue that further. The Columbus Dispatch article i mentioned, one of the most conservative newspapers in ohio, onewest denied Loan Modifications or gave runaround homeowners like carla duncan, social worker from Cleveland Heights who was current on her mortgage, ceo of onewest you sign the Consent Order i mentioned in my Opening Statement for shoddy services and improper foreclosures related to the practice of robosigning which you didnt mention in your answer to chairman crapo. You permitted your bank to break the rules while the process of making life harder for homeowners like miss duncan across the country trying to stay in their homes. How do we trust that you wont allow banks to skirt the rules and harm their customers as a regulator . Thank you for the question. Just a correction but i did sign the Consent Order but we did not confirm or deny the accusations in the Consent Order. The followup review reviewed 175,000 borrowers in the area of did we not provide modifications, the number, i could be wrong, was roughly 35 out of 29,000 modifications that were reviewed. We did make 29 mistakes and i apologize to the American People for that but the error rate was incredibly low and so my viewpoint is if you look at the actual facts, there is a false narrative about the onewest Bank Servicing operation you would walk away feeling good about our operations. False narrative to you, not those who lost their homes. More on that in a moment. Randal quarles, a year before the beginning financial crisis in charge of the office of treasury, responsible Financial Regulation, you downplayed the risks in the Financial Sector, you touted resiliency, you said i can assure you my colleagues and i at treasury are doing everything in our power to make the Financial System even more resilient in the future. In retrospect do you believe you and your colleagues in treasury did everything you could have and should have to prevent the crisis . And what more, if not, what more should you have done and be as precise as you can . Thank you, i appreciate that question because i have obviously reflected since the crisis on the measures taken leading up to the crisis. We were aware the right way to put it is we believed even given the information we had from the regulatory system that the risks building up in the system were manageable, we did believe measures could be taken to improve the resiliency of the regulatory system and the ability of the regular system to understand risk and we were beginning a process of presenting a program for change that would have improved the regulatory system. With the benefit of hindsight we could have been more aggressive in pushing that program forward, putting those ideas forward. I think you can appreciate and members of the committee can appreciate in advance of the financial crisis the political obstacles to the changes we thought would be appropriate to improve regulation would have been formidable so we were proceeding cautiously. With the benefit of hindsight, we were too cautious. Political obstacles, the power and influence of wall street on this committee . I wouldnt say it was so much the power and influence of wall street on this committee, i one of the ways in which i think on a clean slate Financial Regulation could be improved would be to have a much simpler, clearer, less kaleidoscopic construction of the regulatory system that would make it easier for the regulators to understand where risk is and where it isnt. The political obstacles to that were less those of the industry and committee and more those of people of goodwill having differing views in a time that wasnt a crisis as to what the right answers were. It had been a longstanding question that changing those rules was going to be difficult so i do think it is a fair question to say what could we have done differently . My answer would be we could have been we could have moved more quickly. We could have been more aggressive in pushing these regulatory changes we wanted to push but believed would be politically difficult. Back to joseph otting. Treasury released its report on financial relation as required by the president s executive order. Much of that report focused on rolling back the nations largest banks including decreasing capital requirements. Do you agree we should roll those rules back to the nations largest banks . There were a lot of recommendations in that report and i support a number of those, specifically as we deal with Community Banks. That wasnt my question. Because the capital structure we have in place. The rules for the largest banks are appropriate should be weakened. The regulatory system. And we have Better Capital levels. And we had many provisions and laws in the Banking System, 7 years ago when doddfrank was put in place, to look at the characteristics, and a wellcapitalized Banking System that understands its risk. We should drain the swamp as he surrounds himself with, and executive retreat. And decreasing capital requirements, and you are not part of any effort to weaken capital requirements, clearly the wrong direction for a stable Banking System. Thank you, mister chairman, thank you gentlemen for joining us today. Let me start with Randal Quarles. I enjoyed our discussion, and followed up on the Resolution Authority of doddfrank. And made it clear, serious flaws in doddfrank, one that has bothered me from the beginning, is the resolution of the authority the grants disturbing discretion to regulators in the case of failing institution. Puts taxpayers at risk for bailing out a Financial Institution. The right way to resolve the failure of a big financial decision is to do it in bankruptcy where the losses would be taken by shareholders and unsecured creditors, creditors would know with complete transparency how they would be treated because it is a matter of precedent in law and similarly situated creditors would be treated the same way, these are fundamental principles of bankruptcy and if we have this Resolution Authority and Bankruptcy Code that needs to be modified there is a danger that a big Financial Institution gets into trouble, we would use this flawed authority. I have legislation that would amend the Bankruptcy Code. It is designed to enable bankruptcy to work for a large complex Financial Institution, i want your thoughts on whether you believe it is necessary to amend the Bankruptcy Code for this purpose, whether you are working with this committee so we can never have too worry about taxpayers bailing out a Financial Institution. A theme throughout my career, my approach to policy and regulation has been discretion of policymakers and regulators should be as constrained as possible and where those regulators should be as clear as possible about how they would exercise in the future, actions are predictable and less uncertainty as to what the arc of policy will be. In connection with that, it is a valuable effort, the right way continuing to improve the environment for the resolution of Financial Institutions is to improve operation of Bankruptcy Code so Financial Institution could fail, and and and and the Bankruptcy Code, a lot of questions that surrounds, and happy to work with you and your staff on that effort. I want to touch on seecars, you think there should be more transparency in the methodology. In the committees benefit a reminder the gao report on see cars, we know how costly it is to comply with this regime but the models and testing procedures are not transparent for gao but not only that, the fed has not done enough to assess whether ccars is procyclical and if it is, theres a danger it could contribute to Systemic Risk in the dynamic of the crowded trade that you alluded to. I would urge you to seriously considers that possibility and the extent to which ccars is necessary given the fast mechanism. Joseph otting, if i could ask you a question. One of the other things i find problematic about doddfrank is the city designation. Them process by which the f stock has made the designation has been so flawed that a court has ruled it is an permissible in at least one case. You would be a member of the committee making designations. It is irrefutable that process has been opaque, institutions subject to the designation do not know the criteria by which they are designated. There is no welldefined process by which a firm could discontinue the activity that would cause the designation, no welldefined process for the designation. Given all these flaws, one court has agreed, do you think it is appropriate there wouldnt be additional nonbank sifi designations until this process is changed . I agree with the points you made. The committee should sit down and bring greater definition. I agree with you. Thank you, mister chairman. Thank you, mister chairman. After the 2008 crisis congress put the fed in charge of supervising the biggest banks and created a new division to lead that effort. That means if confirmed to this position, you will have more influence than any other person over the regulation of the big banks. Given that enormous power the number one thing we need from the feds face chair for supervision is a demonstrated willingness to stand up to the interests of the big banks that threaten the Financial Institutions. When i look at your 30 year career, spinning through the revolving door of the private sector, i just dont see it. You have 15 years representing big banks at a new York Law Firm working on some of the mergers that created the too big to fail banks that we have today. Two stinson the Treasury Department including shortly before the 2008 crisis where you insisted that the banks were well capitalized enough to survive a housing downturn, turns out they werent and more than a decade in private equity and Investment Management where you argued repeatedly for weaker rules for the biggest banks. That is not a track record that gives americans a lot of confidence in you. What i want to do is try to look ahead on this. The big banks and Financial Firms have a lobbying Organization Called Financial Services, roundtable, fsr, it has no Community Bank members, purely the big guys. Fsr recently bid 124 page wishlist of financial rollbacks of the Treasury Department. I want to go through some of these and see how your views line up with views of the big banks. Fsr would like to see the stress test relaxed for the fed and give it stress test to the banks before the actual tests. I want to see the test. Do you support those changes . Not having read the ssi report, i dont know. You did not the head of fed supervision and havent read this from the fsr . I have not read that report. We will ask the question more generally. Do you think stress test standards need to be relaxed and banks need to see them in advance . I think transparency around the content with the public in general which would include the regulated entities. They are to be able to see the tests in advance and think they are to be reliable . I dont have a view on that because of lack of transparency i am not familiar with all the content. The test in advance is what they are asking for. You dont have an opinion whether they should be weakened. How about capital. If there changes to the calculation of how this would have the effect. And leveraged standards should be lowered. I do think more can be done to ensure in setting capital for the full range of institutions in the system so we can be more sensitive to the character of each institution. You think it should be lower for some rates and not others . In advance of the analysis i couldnt tell you. You dont have an opinion on that. What about the volcker rule which prohibits banks from making risky debt with their own money, fsr wants to cut the rule back so that the banks can make more of those kinds of investments. Do you agree with fsr that the volcker rule should be cut back to place restrictions on the banks . I agree with former governor tarullo that the complexity of the rule makes it difficult to apply and we should work to try to simplify. If you want to simplify you support glasssteagall, right . Do you support glasssteagall . As you know, the key provisions of glasssteagall are still in force, 16, 21. The key provisions are not enforced anymore. They have been repealed. The ancillary provisions which were section 22 big banks to be able to engage in combined activities glasssteagall was supposed to separate. That is not permitted. The core provisions prevent the bank from engaging in fo section 16, 21. Would it be purposely predicted . Is that what youre saying . We got glasssteagall . I didnt get the first part. We are protected if we took away volcker and put glasssteagall in its place . That is why nothing was wrong in 2008 . I dont think we in position of the ancillary provisions governing affiliates, section 21, 22 would make a difference in the financial crisis but usually when people talk about the reagan position of glasssteagall they are talking about ensuring the institution is protected from risks in other parts of the Financial Institution. I am over my time. I want to be respectful here. I am looking for any area where you disagree with major Financial Institutions and i am not hearing it. The primary purpose of this job is to stand up to the largest Financial Institutions in this country. You have no history of having done that and sitting here are you can say is i havent thought about that. We just went through a devastating financial crisis less than a decade ago because people in government let powerful Financial Institutions call the shots. We cant go down that road again. We need people in government who are willing to stand up to large Financial Institutions and we need people to have demonstrated history of that and you simply dont. Thank you. I apologize for running over, mister chair. Senator rand. Randal quarles, i am curious and i will give you a chance to respond of the comments here. Do you believe that a strong regulatory process is appropriate . Absolutely. Do you believe a regulatory process which defines what the rules are as appropriate . That i also agree with. Do you believe regulations should be such that there is an understanding of what the expectations are of any bank regardless of at 5, should be in place . That is not only appropriate but necessary for the regulations to be effective . Do you think there are regulations in place today that make it difficult for Financial Institutions to understand the direction regulators expect them to go without going back in and asking for Additional Information time and time again . I think in many areas of Current System that is true . I have been aware of concerns that certain bank risk exposure regulations have impacted liquidity in the list of options market. The regulations failed to account for the risk mitigating options, impeding access to Central Clearing and hampering market liquidity by constraining clearing members and their customers who make markets. It is concerning when markets effectively provide portfolio insurance to investors are adversely impacted by banking regulations because the regulations are not sufficiently precise to account for the offsetting characteristics of options. Are you committed to exploring ways to remedy this error including the interpreted relief from the board of governors . That would be a very appropriate area for us to look into. I dont have all the details around that question. I think that question and questions like it are important areas. Post crisis our nations banks especially the largest hold significant levels of capital. Governor powell and Steve Mnuchin have echoed this in the past while testifying before congress. Additionally recently noted you do not believe you believe we will likely not see another financial crisis in our lifetime to to post crisis reforms in june the fed announced all banks had enough capital to pass the stress tests including quantitative and qualitative elements of ccars and you did not object with the banks capital plan. I heard discussion of potential fed proposal involving ccars is the new post stress minimum capital requirements. Would you support inclusion of the charge in ccars . I would have to look at that question in more depth. At this point i think that is something that is definitely worthy of looking at. When you drop us a note on that . Very happy to. For both of you, i would like to discuss questions i had the chance to ask Federal Reserve governor powell in a recent hearing, had the opportunity to ask governor powell about supplemental racial slr, i said it is a blunt instrument that fails to account for very safe investments like cash deposit at federal banks. In particular institutions that provide custodial services raised concerns that slr fails to account for safe investments like cash deposits in the central banks. In response to one of my colleagues on the house side, these concerns, the Federal Reserve board is actively considering suggestions about how to improve the costbenefit balance for leverage ratio requirements. Can you discuss anything to improve the riel are. My concern is mutual funds right now, if we would Mutual Fund Investors to have the least extensive approach, one of the ways we do that is by considering whether or not investments in a simple bank like these do, they invest back in in treasuries in a custodial nature, shall we take that out determining what the esl are is . Should that be fairly considered just to bring down the price to investors . I think the practical consequences of those regulations or any regulations particularly with respect to the leverage ratio regulations should definitely be taken into account in determining the character of the regulations. In looking at that proposal in the range of proposals how to address leverage ratio, that is something we ought to be looking at. I too think it should be examined as we discussed in your office. The complexity we built via doddfrank and the capital structure makes it incredibly difficult for banks to bounce between all the categories, riskbased leverage and when you look at the assets on the Balance Sheet they have little to no risk, and certain segments of the industry to describe . Thank you, mister chairman. Thank you for your willingness to serve your family members. I appreciate the opportunity to meet with you in person. Sorry our meeting had to be rescheduled. Randal quarles, we would like to start with you. Your actions in the past are important for us to figure out how you are going to pursue your role the you have been nominated for. Some of the questions will be about past actions and the work you have done in the past was Randal Quarles, one of the things i want to understand, you have been a member of the board since 2013. Yes. Finra is the organization that is supposed to serve as a watchdog for wall street. You qualify as a, quote, governor on the board which is the slot meant to represent the investing public when it comes to how it operates. That is correct. Is qualified Public Interest representative you qualify even though you had investments and lines of credit from many firms that were regulated and also serve currently on the board of the chamber of commerce during that time. Is that correct . Yes. The chamber of commerce has sued regulatory agencies to overturn investor protections on behalf of wall street members. If confirmed to the position at the fed how can we trust you to balance Public Interests against the interests of wall street given the obvious conflict in your current wall. In the same way representing public on the board i have done that without any influence from or discussion with the chamber of commerce, it is possible to exercise responsibilities, the duties of person has. A chamber of commerce including wall streets biggest banks and accept contributions, who is to overturn rules on their behalf. If you are supporting those actions by the chamber of commerce, if you sit on the opposite side of Public Interest representative withinrock . Any decision that involved something the chamber of commerce with a party i would recuse myself. Never rip used yourself as a member of the chamber. In relation to the or interactions on both. No matters have arisen that would require that. You would use your position to stop the cfpb arbitration rule . Dont have a role with respect to that. That is a no. Havent given any thought. And appropriately so. With regard to it robust enforcement of the consumer roles is an important policy matter and i support that. Did you advocate for the chambers position on arbitration . No. Joseph otting, let me jump to some questions in a followup to the conversation you were having with senator brown. If i understand this correctly, 160,000 homes were saved and when you said 160,000 were saved they were modified, people stay in their homes. They did not go through foreclosure. 175,000 nonbank homes that were not in your portfolio, were subject of a 75,000 a year. At 175,000 loans that went through the Consent Order looked back which was done by an independent consultant under the guise of the occ. One w. Onewest is the one bank that did not settle the review. That is correct. Go ahead. One w. Onewest was the one bank completed the look back that had the actual results with the Consent Order. Can you tell me Loan Modifications during your tenure when you were there. I dont have a number. I appreciate that. As comptroller of the currency, entrusted with enormous response ability, the comptroller makes impact where borrowers can keep their homes or have another economic crisis and we talked about this when we were together. Can you point to a single area where additional Consumer Protection is needed . There is a lot of discussion about small ticket dollar amounts for lending activities that came out of doddfrank, highly complicated, requires you to underwrite 2500 loan like mortgage and that is one area, input and discussion, we pushed those out of the Banking Sector and should be back into the Banking Sector, oversight and regulation is offered in a fair and economic manner. To the exclusion of the fpd. Not to the exclusion. My time is up. Thank you, senator scott. Thank you for holding this hearing and take it to the nominees for joining us today. At their core, the Federal Reserve and occ are bank regulators. Due to nonbank sifi designations they oversee a huge chunk of the Insurance Industry having sold insurance for 20 years and being wellversed in the business it is time to reconsider the designation process. The president agrees the executive order earlier this year, regulated on the state level, nonbank sifi are deviation from assistance that works well for 150 years. After stock and federal regulators i can donate lack understanding of differences in Business Models between banks and Insurance Companies, Insurance Firms simply do not have the same Systemic Risks but the any costs associated with the Council Designations have an outside impact. Designations have an outsized impact on the economy at large. For example, life insurers are the largest investors in the u. S. The same bonds leverage growth. 14 of ira assets. Many americans have entrusted life insurers with their savings. Ill ask mr. Transpose the same Systemic Risk of the bank. Well, i think that it would iifficult to say that the Business Insurance pose the same Systemic Risk of banking. Principally as its also obvious, Systemic Risk is o created when you have ins organizations that have liabilities that can run from a shortterm liabilities that can be called very quickly, that are funding activities that are very interconnected with the rest of the system and the size that the interconnectedness would result in severe problems for the system. Insurance companies in particular Life Insurance companies i guess in somecomp theoretical way could have a round up all the policyholdersco showed up and asked for the cash surrender of their policies at the same time. But that is such a remote and historically unprecedented possibility that i dont think it is a part of one to consider. The risks posed by Insurance Companies are quite different. Thank you. Senator scott, thank you for the question. I agree with mr. Quarles appeared the Funding Source and as long as the core business is in line with the mission of the insurance company, i do not agree that poses the same risk of the Financial Institution. To support legislativeam efforts to ensure theres always a Voting Member without socks on the insurance expertise . Seem absolutely. A that would be wise. Im looking to her chairman and Ranking Member to make this a reality. For regulatory purposes, the Federal Reserve often uses threshold like 250 billion or 50 billion or 10 million. These levels seem to come with very little rhyme or reason. The same time, multiple regulations which utilize threshold including volatilelevl framework include the fed to exercise discretion on a casebycase basis. In other words, you can tailor regulations as you see fit. Would you use this discretionary power under the law and its no wonder what circumstances . One of the important general themes of regulation is ensuring that the character of the regulation is adapted to the character of the institutionur being regulated. What has become the word tailoring. I fully support that and i think it is not only appropriate to recognize the Different Levels of risk and types of risk at different institutions in the system pose, but also makes for better and more efficient regulation and efficient regulations allows the financial thstem to support the real economy. So i do think we should look carefully and would certainly be an advocate for that where i confirmed at tailoring capital regulation and other types of regulation to their particular character of the institution that are regulated in that includes their size and other aspects of the character. Thank you very much. Senator tester. Thank you, mr. Chairman. Special thank you for the honorable member for letting me go ahead. Appreciate that. Y thank you for being here today, very much appreciated. When you are in my office earlier this week in thank youou for coming in we talked about of neighbor works and at that moment in time you run up to speed on it. Hopefully youve gotten up to speed. Have you had a chance to take a look at it . I have. I went to graduate school over the last 24 hours. Ou good for you. The question is, what is your view on neighbor works. Youre going to be a direct her of that program . Affordable housing program. What is your view of it . Senator tester, there is a representative on currently the acting with mr. Curry in that role when he left. But it is one of the more senior persons had to sit on the board and the chairman of neighbor works. I spent a lot of time, ive noticed a look at the budget last year, 180 of it came from appropriations, 20 of it came from foundation gives. I went out and spoke with people in nevada on the east coast and learned about the organization and what they do is really a proxy the united dates iswhat t offering data of how you do that. You dont mind perspective on affordable housing. I also think we have to find a way for an organization to be able to maintain their place in america. And so, i presume by your previous statement that you dont intend to be the rap on the neighbor works . I didnt say that. Im sorry. I meant to say your position. Do you intend to fill that . Is the role and historically played in the community that i lived and i would be honored to be considered for that. As you well know, the president the budget of neighbor works for 142,127,000,000,000 cut a lot of affordable housinga programs. I asked you this in the office and i will ask you these programs you believe in. Are you willing to push back and talk about the positive impactsa of program and help us get to a point where the funding is that a reasonable level . I would be happy to. Oftentimes we dont get that straight up kind of stuff. I appreciate that. The next line of questioning is something we also took in my office which is critically important. When we talk about robo signing in my office come your exact words were this is a false narrative. I went back and i looked at the content orders for supervision which no longer exists, but the other regulators in here is what it said about one west, in which you were a big part of. It says numerous affidavits or other regulated documents werehe not properly notarized. That was a quote in the physical, too. Litigated for proceedings without always ensuring the promissory note were properly i endorsed or assigned in that one west failed to devote sufficient financial staffing resource to ensure Proper Administration of the foreclosure processes. Can you tell me what that is that that is not robo science . I dont believe that is robo signing. In when we signed the Consent Order, we did not confirm or deny the accusations in the Consent Order. Does a fairly genetic Consent Order and really did not have aa choice. I think the issue ofcons documentation of robo signer tww different different things. An organization where most note were electronically stored and there was a provision at that time where you could use thein system to be able to do foreclosures and when the occ u came in, ots, they found lots of errors in the system and they forced upon the banks to clean that up. I got it and i appreciate about to comment on robo signing. In my mind, there are a lot of definitions to robo signing. Like i told you, if we wrote it down, my guess is we would have different descriptions of it. There were four key ways i would answer. The first is due in the process and controls to review the i affidavit to complete those . We did. For their errors . I dont have that statistic, but i would tell you there were. Some accusations were people find other peoples name. I can tell you that was ever done that one west tank. The third issue was with a properly notarized . We had our notarization activity occurred in one location. People sat next to each other. They were not doing it remotely and a critical component of the foreclosure is the affidavit isr the person signing the affidavit validated principle has to an amount you and quite frankly we found no errors on the person was doing that work. In way over, mr. Chairman. Bear with me for a second. If in fact you were to sign off on an agreement that was not accurate, i dont know why you would do that being in business, in the banking business. This is pretty darn clear when its a litigated foreclosurerea proceedings without always ensuring that the promissory note for properly endorsed ornsn assigned. I would imagine that the office of thrift supervision found that have been once or twice, this wouldnt be in there. It had to happen with some regularity. And i got it. Im not saying, but it does say properly endorsed or assigned. Would appreciate the opportunity to have a followup discussion. I can try to gather data from public sources. I can tell you similar to secretary mnuchin, we have kicked this thing five ways to sunday. If there were errors, i dont want you to think they would never make errors. Im going to close it out wat real quick. The issue is you are ahead of the occ. You are supervising people who potentially did the same thing. Thank you. Senator tillis. Thank you, mr. Chairman. Thank you for being here and congratulations to you and your family and your nominations. Someone earlier said, mr. Quarles, that they were concerned with you doing the revolving door between regulatory roles in and out of the private sector. I actually find not refreshing versus bureaucrats riding the escalator to learn how to regulate. That is a good thing, not a bad thing and im impressed withfr your past experience in both settings. First, to either one of you, do you think youll cause the 2008 financial crisis . Give me a real quick yes or no or maybe because i got a couple other ones. L i do not believe so. I think that keeping depositoryr institutions say from other kee activities in the larger organization. Relative to that in the followup. I do not. Said chair volcker has said he thinks the roles should be simplified. Do you agree with that . Im trying to get somebody whos watching nathan doesnt understand what we are talking about in terms of the Regulatory Overreach a kind of visual. I ive done the masses are meeting the other day. I look forward to it, but there is some of the larger more complex things will submit as much as 80 to 100,000 pages annually to be compliant with the stress test mission. If you line up those pieces of paper along and, that is 17 miles. It is 81 volumes of war and peace. It is close to 20 or 30 feet of shelf space. Now, after this a minute, we hear regulators going to agencies a week or so later. I dont know if anybody in here can read 81 volumes of warren peace in a week and digest it, but my guess is the regulator can. It raises the question about how valuable it is. One thing we have to look at is of course many of these largers banks and Smaller Banks regularly do stress test. Can you talk about why the transparency, some people were s suggesting its giving somebody the answer key before they take the exam. Kitano in the transparency is important and still provides yot having it to be transparent and that the institutions know what theyve got to be up against. Im happy to have you asent well. I think there are a number of aspects of god. It is not giving the antitv answer key. It is giving them the questions. It is giving them the past. It is a little difficult. The situation we are in now. If they get out they can game the system. Theyre regularly during stress tests anyway. In that is certainly the benefits of transparencyst outweigh any theoretical costs. We you are clear about what it is you expect coming youllig inevitably get more compliant, positive feedback not only from the banks, but the public as to how tests can be approved. Who ultimately pays for the cost of this . If we keep on ratcheting the costs come in who pays for this . The consumer. The little guy. Exactly. I wanted to ask a question. Mr. Otting, i will start with you. How many takes on a spear . A classical spear . Tart two. So weve got four or five for the Financial Services industry, right . Lets get away from the big bang for a minute. Lets do a Community Banks arere midsized banks. Weve got four or five regulatory agencies on any given day going into a bank pretending to be at the tip of the spear. We does that make sense . Is there some way we can get to a point where we have certainty and responsibility around regulators said the Financial Services industry, whether a Small Community bank or superin bank knows who they should be answering to for a given set of regulatory regimens . I say for the record i misspoke it should be one 10th. Record i will see one of the complexities. Complexities when you talk to Financial Institutions is often similar entities asking for the same information. Once coming in the door when the other is going out and the lack of coordination makes it difficult on the industry. This is an area where he askn you out to commit being territorial and deciding that you are right. Theres only one tip of the spear and you are the tip. Logical assignments or rational basis for one to take the leadd and the other to follow and provide the clarity to the Financial Services industry. If you really want to help the little guy, you better stop passing the regulatory costs down by adding the regulatory be burden. Price waterhouse regulations are good for us, put my kids through college. I think we have to simplify these things that so they get to write size regulations. Otherwise, the money goes down to the individual deposit, individual small business, and using Financial Institutions and i hope you all get in there right size regulations. Regulations exist for a reason, but do it in a way that actually is responsible, predict the bull and as plain as possible because it will have an enormously positive impact on the movement of capital in this country and getting growth were needed to be. Thank you. I look forward to supporting nominations. Mr. Quarles, i hope you dont have an opportunity to deal with the arbitration rule because i hope we repeal it long before you ever get there. Senator donnelly. Thank you, mr. Chairman. Thank you both for being here. I would just like to let you know obviously these are positions of incredible importance and that the American People are counting on you. I just want to quickly but you know the results of what happened in 2008. In my Congressional District that i represented at the time,s Elkhart County 20 plus unemployment. The chrysler transmission plant is in my district, over 5000 people work there. A little bit later, less thand 100. So that is 4900 people wondering how they are going to pay their mortgage, how they are going to feed their family, how they are going to be able to make angoing meet. Small businesses in my district, and met with one after another that had lines of credit and they were all called. These are small businessmen who worked all their lives, small businessmen and women who at that point had to have a fire sale of assets in order to cover the line of credit. 20 unemployment, lines of credit being called, people cull losing jobs because we had a financial collapse caused by wall street. But it was not wall street who at the end of the day got the pain. Pa was the folks i live with in indiana. He and so when you miss that, the real result is people losing their houses who did nothing wrong other than show up for work every day and work nonstop to take care of their family. Thats the obligation and responsibility of these jobs that you are walking into. I want to ask a couple questions. Mr. Quarles, one of the things i saw as the rating agencies recently reselling ratings, that were you aware that the were taking b. And double b. , stuffing them together and have that be rated aaa by the agencies at the time . The exact mechanics of some of the Rating Agency practice i was not aware of. Looking at the rating agencies and practices with them came we were in the process of doing. Did you see anything that caused concern, when you looked at their practices because you can see the products they were putting together. I would say well we didnt appreciate the depth of the problem, it was something we were looking not, which was evident and should be more evident to us. Synthetic ceos, peer gambling, do those kinds of things concern you . Do you think are appropriate . I spoke at the time against the derivative products. Yes, they did concern me. Mr. Otting, what lessons did you take to the crisis . We were looking at basically the wild west, ceos, rating agencies that take the zen sees in all the sudden you have a aaa. H people suffer from a live inou indiana and lose their jobs. Senator donnelly, thank you for the question. I too have experienced the pain of people we met with the went through the foreclosure process. It is a lifechanging event or when you said they are hardworking americans. At the time of the crisis i worked at u. S. Bank and never participated in the dvds. We felt people needed to have the proper credit for underwriting when you work with the younger people, did you ever look and say this is crazy . . I did hear there was a pointr in time that the high to loan value and if somebody had a good fight though, maybe they justified the higher loan to value. When the boxes slipped, we mail im almost out of time. As we look ahead, and obviously i want to and make sure it doesnt happen again. Everybody does. What concerns you most . Anything in the horizon that you look at it and say this could be a problem. I think Student Loans are an issue. If you look at it from ann underwriting is commonly auto loan market got a little s overcooked, pulled back a little bit more terms were getting aut aggressive, loantovalue surgeon in aggressive and at the inside of the occ examining the pullback got a lending activities. Mr. Quarles. I would agree with both of those points. Anything else that concerns you . You know, i continue to behat concerned about some of the level of complexity in the c system. I dont think that weve given enough with more thought is how it relates to each other. Thank you, mr. Chairman. Could i add one thing, chairman . You ask what concerns me about america today. A big concern is the lot ofha people are not qualifying for banking products and services. You have branches going away, people concerned with a walk in the branches and opening up accounts. There needs to be a real focus fund we make banking available to the lower economic enough that people across america. This and tools to do that with automation. We did that at one west bank were focused on bringing people in when they want in their neighborhood. Senator menendez. Thank you, mr. Chairman. Mr. Quarles camille at the Treasury Department in 2006 during the callout group on a private equity firm in 2007. After you left the Administration Come he publicly advocated to change the rules limiting private Equity Investment banks. Is that correct . That is correct, senator. In september 2008, they a policy shift line for equity firms to take larger ownership stakes. In may 2009 the callout group or two other firms hope i need early in bank of united. Is that correct . Bettis is also correct. The ftse covered most of the losses they made 1. 6 billion il payments, more than any other washington agreement during the financial crisis. Ultimately, bankunited failure cost the fdic fivepoint 7 billion in the callout Group Another private Equity Investors walked away with more than 2 billion. That sounds pretty much like to me you used your remaining influence in the administrationd to change the rules to make it easy for your new employer, a private equity titan to turn americas struggling Community Banks into cash cows and in so doing he gave little regard for. The community served by these ll banks. I hope my colleagues are acutely aware of the consolidation Community Banks that they understand what we are talking about here. Here. Mr. Quarles lobbied the government so his employer can invest in deals for the yes he would take on all the risk private Equity Investors would reap all the benefits in the future the Community Banks involved was merely an afterthought and that worries me in the context of some of the comments you and i discussed yesterday about your views onors Regulatory Oversight changes in regulatory reform, changes in the wall street reform that came in the aftermath of the worlds worst the nations worst financial crisis where we were told by the vernacular of the Global Financial meltdown. An and so i worry about that. Mr. Otting come i heard thenc answers you gave to senator tester and mike secretary minetd chinned mnuchin, theres contrary facts. Let me ask you something else. Did one must engage in dual tracking, offering a struggling homeowners the hope of a modification while simultaneously pursuing a foreclosure . Allison and mr. Is. I didnt ask you that. The answer to that is yes. We did and it was an industry practice to identify the Consent Order. We are committed to provide a total number of foreclosures among modifications completed in each of the state presented by members of this Committee Prior to voting nomination . I do not have access to the data. You could request the information from them, but i would not have any you dont have thee wherewithal to us than to provide that . Ut i do not. We will ask, but i dont know if they will comply. What you may not have direct access to the information coming you can be helpful in requesting information prior to the Committee Voting on your nomination and i hope you would do that. Are you asking for me to request the information . I dont think thats myinfo position to request that. New jersey was particularly hard hit by the 2008 financial crisis and continues to have the highest foreclosure rate in the nation. Nominees who must understand that based upon the positions theyve been nominated to and positions they have taken in the past that one doesnt come prepared to reconcile or try to reconcile those views. So i have a problem with that. Finally, mr. Quarrels, you i spoke about a rules based approach to monetary pall olicy. And you tell me you do support a rules based approach to monetary policy. Do you accept the analysis that following a strict tailor rule would undermine the ability to achieve the full employment mandate we talked a lot about that one side about that nomination but not about the full employment side and your views on that. Certainly, senator. I think that the tailor rule is merely one example of a rule and is not advocating the adoption of the tailor rule to guide fed policy. With respect to the employment mandate as part of the dual mandate that faces the Federal Reserve, i think thats an important element of the Federal Reserves obligations that were taken very seriously. Thank you, senator. That concludes the questioning except that senator brown has asked to have two more questions. So we will do that, and then the hearing will conclude. I was a little perhaps the collective amnesia has spread to me personally from this. But my understanding in my office when i pointed out the information that senator menendez had asked you for, i had asked for secretary mnuchin, and i believe he signed a couple of those letters asking for the information he just asked you about. I thought you said in my office you would be willing to make that request to get that information for us if i left that impression i said i would help participate. But its solely at cits decision i understand that, but i think the request from the designee to be the controller might get their attention, and it didnt get their attention through the whole process. Secretary mnuchin nominated, we all had a number of us ask repeatedly he wouldnt disclose that, and i sent a number of letters. So i would like you to help us commit to sorry to hear that. One question, joseph otting, you talked about 30 people you apologize to in my question earlier and the occs april 2014 Consent Order we discussed found onewest did not comply with rules to protect activeduty Service Members, borrowers not in default, modification request and others. Thest Consent Order said there were 10,700, not the 38 number that you cited an hour ago. Why not apologize . The 10,000 number, there was an accepted practice if you had this dollar amount, escrow would close, you would get the title n policy and appraisal policy for other activities and often these would be 0. 02, the was between relatively small dollar amounts we didnt ask for nor give refunds. When the occ said we had to be 100 accurate on those transactions, anybody . 99 or less on those we gave them the actual dollar amount and Certain Circumstance it was . 10, and we end of reimbursing every one of those dollar amounts. I want to know more about that. Randal quarles, you said, quote, markets are always ahead of regulators, that is how it should be. It is analogous to the advice my father provided me, quote, if you dont miss two or three planes a year you are spending too little time at the airport or too much time in airports, sorry about that. If regulators are not a little behind market in a few areas atp any given time it will be stifling innovation and evolution. We have all been guilty of using unfortunate analogies but what concerns me, this world view contradicts the ideas that you were doing everything in your power to prevent a crisis. It concerns me even more that you believe oversight agencies like the one you hope to run should in fact miss a plane here and there, should miss risks in the system the last time you missed those risks and costs by zip code and by state and a lot of people, their jobs or Retirement Savings in the name of innovation but the question is at what price, do you stand by your statement that regulators should be, quote, behind the market . That is probably the most unfortunate use of language that i have ever made and i do not stand behind that statement. Thank you for what you said in your statement about humility, those are two things we dont often see in this many. Last i would like to say is when chair yellen was nominated and confirmed i asked her to come to cleveland and see what the real economy looked like and learn about manufacturing and what decisions she would make as chair of the Federal Reserve, the impact and she did that much as alcoa got to operate a 50,000 ton press, and considering the impact on my neighborhood and beyond, considering what some of the statements from joseph otting, i so much appreciate your comments a minute ago. Orns i would like to invite both of you to come to my state. President lincoln said staff wanted to keep them in the white house to win the war, prefree the slaves and preserve the union, i have to get my Public Opinion bath and go out among people and i would like to invite each of you is confirmed to ohio to join me and learn more about the economy in the midwest. I would be delighted to do that. Back to cleveland for me. A midwestern guy. Senator cortez has a brief question. Just a clarification. Joseph otting come in your answers did i hear right that you said onewest did not engage in robosigning . When i answered a question, couldnt have been errors, they werent identified in the robosignings, there are processes in place, i think people of different definition the robosignings, we have a process for the affidavit, did anybody sign an affidavits of another person at names, third is the data check before somebody assigned the affidavits and we didnt do those at onewest. Im not aware of any exceptions. They were identified as any issues in the interim report that reported our results. I have the Consent Order between the office of thrift supervision and onewest, specifically states onewest bank engaged in unfair banking practices related to Mortgage Servicing and handling of foreclosure proceedings, specifically those unsound practices that included state and federal courts or local land records offices in nevada. New affidavits or other mortgage related documents that were not notarized specifically that were not signed or affirmed in the presence of a notary dedicated for foreclosure and bankruptcy proceedings and initiated nonjudicial foreclosure proceedings, and the promissory note that was not properly endorsed or signed, that is robosigning. Wi that is in the Consent Order. We did not confirm or deny. You have to look at the results. Why did you sign a Consent Order . If you didnt agree the Consent Order the state of nevada. Do not have a choice. You are telling me your company did not engage in this but were forced to sign his Consent Order . I hope you are never in the position i was. Th i had great pride, i was here less than a year and i would argue i had to for the benefit of our employees sign the Consent Order, when i did not agree with what was described, the words that were inserted were do not confirm or deny. I encourage you to look at the results produced in 2014, happy to get those to your office and it is a different story of onewest bank. If you did engage in the practices you shouldnt of sign the Consent Order. I appreciate your comments, thank you very much. It was very instructive. That does conclude the questioning and the hearing with the exception of a few final announcements. Before i do that i want to thank you for participating at the hearing and i think you for your willingness to serve the country. For senators, all followon questions need to be submitted by tuesday, august 1st. Tuesday, august 1st. For our witnesses response to those questions are due by the following monday morning, august 7th. Please respond quickly to the questions as you receive them. With that, the hearing is adjourned, thank you. [inaudible conversations] majority leader. Be d with. The presiding officer without objection. Mr. Mcconnell i ask unanimous consent that the papers with respect to h. J. Res. 76 be returned to the house of representatives at their request. The presiding officer without objection. Mr. Mcconnell i ask consent that not withstanding rule 22 at 2 15 today the senate proceed to consideration of calendar number 178, the nomination of Christopher Wray to be director of the f. B. I. I ask there be four hours of debate on the nomination equally divided in the usual form and that following the use or yielding back of time the senate vote on confirmation of the nomination with equally divided in the usual form and following use or yielding back of time the senate vote on the confirmation of the nomination, and the president would be immediately notified in senate action. And all post cloture time on of the new some nomination be considered expired. Is their objection . Without objection. The majority leaders announcement on taking up the nomination of mister for ray for fbi director. One of the items on the agenda and the senate postponed the august recess, and the fbi director coming for a party lunch, senators are due back in a couple of minutes, taking a look outside the Majority Leaders Office where reporters are awaiting any comments as lawmakers exit their lunches. A short time ago the nomination of mister ray, the deal that was hashed out by leadership which requires consent of every senator and allows mister ray to skip procedural hurdles, a sign that the fbi is heading toward a smooth confirmation. The senate set to vote on the confirmation after only four hours of debate and the Judiciary Committee came on his behalf late last month. Multiple congressional committees and the fbi Justice Department overseen by Robert Mueller investigate russias election interference and potential ties between Trump Campaign officials and moscow and Christopher Ray saying i do not consider director mueller to be on a witchhunt. Waiting for comments from leaders as they exit the party lunches, watching live coverage on cspan2, the senate expected back in in a few minutes. [inaudible conversations] the reporters gathered here right outside the Majority Leaders Office the senate out for its weekly party lunch meetings, expected to return in a few minutes to start four hours of debate on the nomination of Christopher Ray to be the fbi director, expecting a vote later this evening on a judge for the 11th Circuit Court of appeals, tevin newsom. At an end of july the Judiciary Committee voted unanimously to approve mister razz fbi director, one on the ray nomination and the nomination of kevin newson to the 11th Circuit Court. And we will let you know about the debt ceiling, news on the debt ceiling, and Steve Mnuchin lobbying for cleaned and dealing increase, the debt increase expected to be needed some time this fall but may prove a tough vote for both parties, leaders from either party signed off on the Trump Administration plan to raise the debt limit without other attachments. You can read about that in politico. Com. [inaudible conversations] [inaudible conversations]
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