agree with general keane's assessment that we should take the pakistan supply route off the in negotiations with pakistanis and it'sot gnan rdrr oueeue w ita agree logistically speaking we are in a much better place vis-a-vis pakistan. it's an amazing alternative. thuto rre snreaseslighy explicit permission, and in any event, we're in a much better place. i think the green on blue situation is still very troublesome. i don't think the general would ivialize it, and i think it do runi ry inr itooperate well with afghan forces. i think it's risen to being a strategic concern. but i degree with general keane that there are -- i agree with general keanehat there are serious efforts to try to at

least cap . ma tes co t er at would be my reflection there. if i could briefly comment on to whom the afghan forces are loyal. a lot of this is going to turn the 2014 elections in afghanistan which are crucial, i eda t aner stthdsk h what's your number one concern about security in afghanistan, and he said the 2014 elections. because we get the wrong person elected, and all bets are off. even though i don't think presidentkarzai has been a str leader, there a le oh'so neea no emulate. and one of them is to have non-pashtun vice presidents. preferably someone better than e first vice president. but thbasic concept of may a heic as the first vice president, i think a pashtun

will win in 2014. the other point in terms of the ministers of security, you need at least one non-pashtun prenn'reor than karzai's family. there are two or three people whose names i heard frequently who i think we need to find a way qutly or expliciy to veto, and that the point i was ngge n sty. n'agthons in5li aear if the next preside of afghanistan is even more problematic than the karzai regime. and i think we need to send that message soon. >> thank you, mr. cooper. we'll go to. ew t ymrir preparation this morning. dr. hanlon, you've been invaluable. we appreciate that very much. mr. boot, in the last sentence of your testimony you say most ruby tba nestoe

eympeeur cnu do consolidate their post-2001 efforts to create a more inclusive and more moderate state. how commitd to a more inclusive and moderate state do >> well, as mike suggested, i mean, obviously, president karzai and his family are deeply problematic. there's, obviously, deep issues of corruption there, although it is possible to work withthem as we've seen inheecen retsteacn ghiddhend o the detention facility. at the end of the day, i mean, i think there's no question that the karzais, like a lot of the elites in afghanistan, are trying to get the most they can out of theste, af em dveel buthk we're encouraging that by not having good controls over our spending and setting

deadlines of our departure -- >> but isn't the other half of that argument saying, you know, we'lltfilyanee enagthyp of behavior? let me ask you this question. i completely agree that, obviously, an extension of taliban rule in any part of that country is wholly undesirable, prt.it whawe'r trygto an t wssrei er that the present regime might find it quite acceptable to ve an unwritten agreement where they would stay in power, but there would, in fact, be parts of the country at wld be ruled by the taliando whateverhey nt meare is t is rmeoudo b us, preserve their own control of the country, their own wealth and justook the other way as the taliban rules certain parts of the country and perhaps once again is the host for the alaedaase? anit.sro w

>> sure. well, first of all, this regime is going, and thank god for that. you know, ryan crocker, i think, has worked -- you know how pablee ar e is. >> and he's confident there will be apolitical transition, and that was not always the view. there was some speculation, as you know, that karzai would find some means to sort of hang on here by constitutionaefor t en i gme g. n'in wt a transformational leader or, but i do believe we'll get a leader who clearly uderstands the legacy of the past and the problems it's caused this country, and they'll try to make some iremental improvemes, cheonheli o s take place in korea over a number of years. so i'm not of the mind that the regime is going to get worse although there's potential for

that. and i clearly believe we should be a in helping to influence jo iern wweion as mhael -- >> see, if i could paraphrase my question, what i'm really asking is how confident are we that the afghan regime's interests are truly aligned with ours? and to the extent that they're aegeng anecan we do to iue dcity hi that it's absolutely not in our best interests for the taliban to control a square inch of afghanistan. i agree with that. but they may see it as being somewhat in theirs. how do w make sure our teres areig thuestn.--us my -- i don't know political leaders in the afghanistan that i've dealt with who would be willing to cede any of that country to the taliban. >> uh-huh. >> and foall theobs

asanle, violation of human rights and what that would mean inside of their country. there would be absolutely no toleration for political leaders doing something like that, in my view. >> uh-huh. >> you know, one of the most rk thisha t acshewyrgha took place last summer asking for the special relationship with the united states. e participation in that came from virtually every province in the country. >> it was -- my time's about to expire. i apprecia the answer. byin . stse.han, mesnkhr o rindrs ahr the republican administration and the democratic administration we've been asking the wrong question, which is how competent are we at transitioning over to afghan security. i think the qution is h ine tac i >>, ow troops are doing a fantastic job there under very difficult circumstances. i think these gentlemen have given us very sage tactica

advice on w to achieve it, but istric urman re wr ets here. >> sure, sure. >> thank you. >> thank you, mr. andrews, we appreciate that. gentlemen, thank you so much for spending your time with us today. asou can see, we are on the ont end of a vote series, and i want to make sure that we have anpportunity hey ess tan h k,tthele to submit those in writing and ask that you be able to answer those for the committee. and with that, again, thank you for appearing before us. and with that, this hearg is adjourned. naleveio nef av t trtheonatwe ny wig ha ay ate ld grn play in housing finance?

>> in reckless endangerment, pulitzer prize-winning new york times columnist gretchen more des gnmsusubsidized homeownership. >> if we want to talk about it and the populace agrees that it's something we should subsidize, then put it on the balance sheet. and make it clear and make it of mit cngdkevodwa thth y enterprises, fannie and fredty mac, when you deliver the subsidy through a public company b with private sharehders and executives who suy hevehat a lot of th t day o subsidizing homeownership. i think we've en the end of that movie in 2008. >> more with gretchen morgenson sunday at 8 on c-span's "q&a."

reatgc-2. thitanbl fa da featuring live coverage of the u.s. senate. on weeknights watch key public policy events and every weekend the latest nonfiction authors anbooks on booktv. you can see past programs and get our scheduled toes our thonatonso media sites. >> today a house hearing looked at the legal issues surrounding payments through electronic devices and smartphones. the house financial services suommitt on financial institutions a umed arom htoav eaepenfiia es erctne and an attorney for the federal reserve. >>eang will come to order.

ms. maloney's on her way, and she said go ahead and start, so i will start with my opening statement. rst, i want to welcome the witnesses. this morning's hearing marks the l alt ri o arhicotes d heurne m wel hearing that served as a primer for members on the current landscap of mobile payment. earlier this week the nking member and i had a dinner, bipartisan dinner that afforded members and stafthe depm ibi penre t ior cay it's an exciting future, and, um, i wish i had the brain depth to be able to invent some of these things myself. this morning we willear about the current regulatory ctur forhe pntysm a wepm me ym citnt t guryucture. the past decade has seen tremendous growth and innovation to technology that will no doubt influence the payment system in this nation and abroad. we can't really imagine what the technology may be sixeafr

w. r rn iiman r cttndan ruofth fmobile payments. does today's regulatory structure provide seamless protection for consumers? easy dispute resolution? and otect ait money teisdengnd tan o d me ge if swh geou be made, minor or major? for that reason today we have two very important voices to talk about today's regulatory structure. the federal reserve has been the expert on the paent system for ata bito m, and the boston d tar inn t omised potential pitfalls of mobile payments. while their consumer protection duties were transferred to the cfpb two years ago, the reserve continues to be an important player. as witnessest ourirst le enar wd,e fos en ail udthedo phone bill billings may not fall under

current paent law as we understand it. meanwhile, the trsury's financial crimes enforcent retithel las t rcagesig m unng tinng terrorism and is in the best posion to tell us if any parts of the newer forms of payments mit fall outside of our current requirements for financial institutions to report suspicious activities. we nd takta w t a orcost two bank has warned explicitly it'll be much harder to follow the future of money and to establish the sender and receiver of money as the transactions movetowards anymy. unouon insert -- consent to insert into the record a statement from the cfpb i thank thank both witnesses f r ars of service. the committee would le to k ctre r his

work, we're aware you're transitioning to another job and could have declined is invitation to testify. so we especially want to thank you for coming today. i would now like to recognize -- >>re icot itht i d coming in. >> i tell you, i apologize. we had democratic caucus meeting for health care. >> on mobile payments, i think. [laughter] >>-- >> w - rnihe rine hanko much the chairwoman and welcome the federal reserve. and this is the third look at the issue of mobilepayments, hog ss hegseommend te t new technology, and literally we co-hosted a dinner to look at it and expose the new technology to members of

congress. and we saw this earlier in wee the in g tld d he isra t finding ourselves reacting, being proactive. and i really think that i'd like to put my opening statement in the record. beeve me, it is very reg. gh opuntosk questions, particularly in the area of identity and security and maintaining the security of consumers with these new products. thank you. i yield back. 'diko gn c . ecr onu t yad chair. the growth of the mobile payme industry represents a tremendous opportunity for everyone from consumers and rchants to financial institutions and other providers. mobile payments have aread siicdepm um enthsi

the move away from checks to debicards. this should bring a great number of benefits, particularly in the form of competition a lower costs for consumers. t sent likendegor structure a regulatory framework that helps protect the private information of mobile users but alsoncourages investment and innovation whin the indtry. w,s el nthae last senate policy initiative -- significant policy initiative in this area which was price fixing in the debit card market was the exact oppote of what congress and i eedomhs should beoingand ryatis igcais. m chair, my hope is that today's hearing helps congress and regulators embrace these new innovations and that it leads to a

properly-constructed regulatory frameworthat works f i dk.v enan ydsa mr. scott for three minutes. >> thank you very much, mr. chairman. let me commend you and the ranking member for putting this very important and timely hearing together. certainly nothing could be more ademofhny. r a t m ou than in the mobile phones we use. we basically have becomeless saptly captive -- pleasantly captive by the cell phone. and we need to make sure tt thamanpl aad - ua pcted from abuses, from invasions of identification theft. many people may not know, but 92%, 92% of all the american th ho geyheuse mile phos. and with that comes all other

types of services that are connected with it. many times people have their bank accounts, their bank statements on their mobile tha mcafoio prip drug information all on their phones. and so it has become an integral part of our physical beings. and so we really have to ma sureh adeateroio re he phones are what weall smartphones which are capable of processing mobile payments, cred card payments. scofthsiificant athente amount of impact that mobile phones have on our entire existence particularly in very vital and ptinent information

reinr nc co, hee,ll ryor ies 's very important that we make sure that proper regulations are in place to protect the american people. and i look forward to hearing the panel. ankou, cman. haou t. tht, ev in atts aompleted, and i'd like to turn to the panel. our first presenter is mr. james h. freis. director of financial cres foen network athe pantfrey. sten,llel y t yndd morning. chairwoman cap toe, ranking member maloney and -- >> could i ask you to pull the hope? for some reason that microphone -- yes. thank you. >> i'm jim fss ai' eato hois efforts to establish a meaningful regulatory framework

for mobile payments and other emerging payments methods. my testimony today will focus on me of the most important bedo t enimdalalo e heinal system aztec logical advances create innovative ways to move money. at theutset, i would like to make a distinction between mobile banking and mobile paymts. while mobile banking volv mmatanrenm ccolouir coat depository institution, mobile payments essentially involve the directions of funds outside of a bank account to effect payments or other transfers. let me emphasize that both types rent fen-phen regulations either as part of the requirements on banks or as part of the requirements on money transmitters. recognizing that payment syste olve rly fphto

reivpr i t ea yr ago specifically to cover mobile payments and other innovations. the rule was developed to be technologically neutral and, hopefully, coverew developments for years to come. specifically, e rule focus rehe url ait osohe particular electronic communication vehicle. if a mobile phone allows person-to-person payments or payments that cross ambassadorrers -- borders in or out of the country, tn the idusen t st, res sansveprur in place to report to fen-phen possibly money laundering or other suspicious activity. in furtherance of that, regulations make it clear that the acceptance of funds from one person and then the smon ho fs ot on ocnby a m tis money transmission. and that any person doing business wholly or in part

within the united states that engages in money transmission regardless of otherusiness lines such as telecommunication ic elbe money delivery service and as much must register and comply with all applicable to a money transmitter. as part of fen'smmnto gan ogh t dueswe regulate, fen-phen held a series of town hall meetings. fen-phen's already released a number of pieces of guidance with respect to regulations, and ancipate additional red om oheueeormi edythusttes during those town halls as well as ongoing requests for clarification and guy dance on the new i regulatory framework. i'd like to briefly mention some analytical work in the mobile ymenspace. to ece, ngup

regularlily provide reference manuals to help better understand the workings of payment mechanisms and provide prmss to use utilizehis prihenund eq lnfme tr, eee a interesting trend in the mobile payments industry where dierent telecommunications systems and financial mechanisms merge and become interwoven in the same overall mobile payments transaction. forxa, a stgh ooonie tt ughyl money service busiss location with the transaction then being processed through the msb's internal stem. the payment of the funds then going to a recipient's mobile account. on completion of the mee,otaton t mobile phone that indicates the funds have been credited to their mobile account. this transactional overlap results in multiple

informational chokepots that may assistaw enforcement's efforts follow themone lsdey r cois a sans ci w gn sct fortunately, fen-phen's prepaid access regulation was specifically design to accommodate new technologies as they emerge, but aso toapture noveme od enbeusch ct t sar i just described. in the area of new payments methods, the administration has made appropriate oversight of prepaid acss products a priority, and we are very encouragedy the proess made tocouiold es coshs wcourage legitimate consumer and commercial activity to flourish but also help financial services providers to focus on serving their customers, not criminals. thank you for viting me to testify befo you today. i'be hpy tnsan ess ha tu, dto f.

and we'll have ms. stephanie martin, associate general counsel at the board of governors, federal reserve. >>han c td th it to appear before you today to talk about the regulation of mobile payments. the evolution of technologies that enable consumers to conduct financial transactions using mobile devic has the pontia inpoew wa l udby expanding access to mainstream financial services to segments of the population that are currently unbanked or underbanked. but with any payment system, including abi paymen stgurs ho er wer consumers are protected if manager goes wrong -- if something goes wrong such as an unauthorized transaction and, two, whether the system provis appropate

serity and coenality for ensiodto ay irunsanhe rsinalination of consumers. in many mobile payments, at least some parts of the transaction are settle through existing payment systems such as stesu cesks subject to the th vipects of mobile payments typically are related to new consumer interfaces and new payment or settlement arraements which can involve service provids that have not adna bin e ensi. pl tho mp making payments through nontraditional arrangements may change the legal protections related to the purchase. depending on the details of the arrangement and the applable ads pattiesres. b, a federal bank regulators have the tools to

insure that banks offer mobile payment services in compliance with the consumer protection provisions of any applicable laws orleuc ecicd sf ac e icnf most federal consumer laws to mobile payment transactions is subject to the rulemaking and interpretive authority of the consumer financial protection bureau. as pafthpeor oc tnkgag's vi of bank security protections for new payment interfaces as well as for compliance with rules on information security, identity theft pevention and anti-money ariret biat h payments, however, remit to the involvement of -- relate to the involvement of nonbanks. nonbanks can have a variety of roles in a transaction such as an agent o a bank, a managerf

pid vero ane smr mph iltoor payment frank actions. the applicability of existing consumer protection laws or security requirements to nonbanks generally depends on the nbank's role in the mobile endepe is oe ic at conclusion, it's difficult to make broad generalizations about the applicability of existing statutes and rules to mobile payments. this is due to the different patrrmed tiice pders,ank potential applicability of both banking and nonbanking laws to any given rangement. aremts, heal technogical apriinerns cmerequate ri protected. at the same time, given the

fast-paced nature of changes in this area and the potential for significant improvements in consumer financi services fadild atileays, fhe ysndldee t insure that any legislative or regulatory proposals would not stifle the very innovations that would benefit consumers overall. thank you again for inviting me to appear today. i am hpy ansry he mme' qio an t ybo a llini miv minutes of questioning. i would like to make a comment on something, ms. martin, you said at the end of your statement. because at the dinner we had last night, i think we had five raof farin med w cutl t sm, some that are innovating into the system. and one of the, um, concerns that they have -- and think we share the concern and you did through your coents -- is that d'tetadhecu

regular to havely and stifle the innovation and cut off what could be an ea of paymen briingnpe w nohekr an ihihae t this hearing is to really see where are we and where do we need to be, not so much where do we as lawmakers need to come in and clamp down. don't think that's an iue, keur oho ldous nequon are there in existence now informal or formal agreements between banks on the mobile payments issues? is thia structure that banks spic agreements along the lines of mobile payments and the consumer protections that are

contained within? >> um -- gel --does fall within just a ildyortir wrem tarin new technologies, usually you see a partnership, often you see a partnership between ban a nonbank service provider, sometimes a telephone company patannteyo vecoct a aeements in place as to how that will work. but many of these arrangements ultimately get funding into, you know, into your mobile wallet for for example using existing -- i'll call them so asuwitu llhowa perhaps put in that wallet a credit card or debit card would be fundin those creditor debit card transb actions through the normal - >> through thexisting. >> so those arrangements a em aulre la uh.

sh ron t your -- >> yeah. i don't know if you have a mment on that. if you're aware, it's certainly at finn finn you're looking internationally, too, are there special reentsou'rre o tt fh nonk to bank relationships that are already existing? >> i wou concur with ms. martin that if you are trying to transfer between different financial institutions, en is lgely daetonxig bank-sent rick networks such -- accept trick networks such as those involves what we commonly know as your mastercard or vis card for which you need a bank reon. anssue td pretysto m g a specific money transmitter, and i must be a member of that network. uh-huh. let me ask you this too. in your statement you were talking about nonbank

participants and mobile payments. toa c that you could swap between paying with your visa debit, for example, or maybe your rewards points. finish i mean, is that -- that wod be something that really wobe ly vored busat n,'say win esi your u.s. air frequent flyer miles or something of that nature. is that something you all have taken into consideration or are looking at? do you understand at i ng ouerd c mo wt arrangements where you could choose different ways for whatever you're purchasing. >> right. >> i mean, today you have a credit card with flight miles on it -- >> right. >> -- and you can use those to rechemo. spicch i uele yo , ir flight

miles at u.s. air. so that is typicallyithin a very proprietary system. but if i were to use by deb card, that then i would have to go get the money y soths goen wcayoll of your virtual wallet as to what rails that transaction will follow. >> right. and i think the important thing on tt is the consumer protection jurisdictions and are they covering al sorts ertrct t m so think one of the issues to hook at the consumer protection -- to look at the consumer protection laws such as the cfta. ths. arindst the cbth t nlet e laws do apply in each case where a nonbank is invoed. >> right. and i think that's the point you were making, and that's -- >> yeah. and in some cases those laws

were really written with a nk-te reon imi or adein on what the nonbank's role is and how the system is structured. >> already, thank you. ms. maloney? >> first of all, i want to thank both of the panelis today for th rlatwe caih do not want to stifle innovation which was part of your testimony, ms. martin, as we move forward to make sure that consumers are protect and that money launderin isprevented and that other things are in place. oth vine chgymuayin terms of privacy and consumer protection some of the technology really identified the person b their voice, by otraphveaid atouerdom te y identity which is, regrettably, a growing crime in

america among many of our constituents. and i'd like to get a seans from you -- a sense fromou because liew nssy itnecessarily aank, do t w b ary regulator? someone has to be in charge, and which agency should take the prime role over mobile payments which are not necessarily bank produc? and what, to whaextent shld e inreto lvnd coordinate, and who do you see as taking the form of the primary regulator, the fcc, the ftc, the cfpb, the federal an then, ms. martin. how do you see this being regulated? we have to have someone to call if there is a problem. >> yes. thank you for your question. from my perspective we have a great alofere

inth e different financial service providers and a range of different agencies to insure apprriate regulation. laderiounterteismoney inedia value can be abused by a criminal actor. so that's the reason why fin fin looks at this aspect centrally in the examp i've given, ether aeyrass tgh ,th moseesinro through a new provider such as in the mobile payment space, we have a common in making sure that we've done as much as possible to mitigat the risks of criminal abuse. in s doing o debaages atgu on the money transmissionpace. and we've found that that is an

important working model just as we do in other areas such as insurance working with the states or with the sec,orking withhe secitdu. chthil hri onliitspto whether it's safety and soundness, consumer protection. but our ability to work with them is on our single mission of reem ink ioney laundering ravo t thhest tthbaes criminals, frankly, would abuse. so i think the model that we have at least from my purposes is working. >> okay. and, miss martin? >> yeah. i agree, bsicay,th wt sa th iantein tequon to think about who, what agency should take other thanship of this area. it's -- ownership of this area. it's such a broad area, and it covers so many different types of entits. it'sllhardnton eniteigere

etihaca cr t t. so i think at least as a first step it certainly seems to me that, um, there should be coordination and consultation among all of the agenciesyou named as welas fen-phen a egor ti whgoatu kow? who's covering what bases, what gaps there are that need to be addressed. and i think you can achieve consistent result in that way through interagency discussion and coordination. that'str, - charge, otherwise everyone's pointing fingers at each other. >> and -- >> but building on your question or the statement that you had, they were testifying to us or telling us at this dinn we had thherew, tthe newtelo hodspe already using these products. and so i wanted to know what protections have states or actions have states put in place

to protect consumers from unthored tnsacti sp ces t pai phone deposits or wireless phone bills. and i'm wondering what actions states have taken, if any, in this area. >> states do haveoney ofon tmi,an law where if atav registration requirements and some bonding and investment limitations. so to that ec tent -- extent, i know states do have some laws. when you talk about bringing e aninhe ua, thkrht' thwehtwa tec h on. i am not sure what kis of protections exist in the telecommunications law for consumers who are billed for rtare t w mt esa ym t inksor s

further investigation. >> my time is up. thank you, chairlady. >> thank you. mr. canseco. >> thank you, madam chairman. ms. martin, we often tk about pat s 'tav ank account and that roughly 30 million americans are unbanked or underbanked. so how do you feel the growth of mobile payments will effect this group, and would theye more or less likely to eth in st ihato ic second question that you -- >> please. >> i think mobile payments present a good opportunity for the banked and unbanked,, obtain services that are perhaps even cheaper than what their alternatives are today which may be going to a check casher or money transmitter and paying

pretty hefty fees. it's also prettyonvenient, as somebodytate ove 9f opo obon th to enter into the financial system. um, to the extent that banks can offer products that are available through that mechanism, that might be way to reon tghob e i replacement for a check casher or buying a money order. >> now, one concern, ms. martin, that i have ishat we adopt a regulatory framework that makes it morost and m ohiv f et icts novate within the space. what specific steps should regulators be taking to encourage innovation and investmentn the mobile payment e e aurh anonauin laws, um,

are working? >> yeah. the walk betweenon the fine line between regulation and not stifling innovation is always a umht'oror prti aome key concerns that you would like to see in these mobile payment arrangements regardless of how they're structured. i mentioned a couple in my coerotonecy,ne, you kas m anti-money laundering to that list. so if we can look across all of these arrangements and make sure that those key concerns are met, um, then maybe you don't want to reem uil y seeremore detailed e etgotome o lleo experiment, innovate with pilot programs until some really best industry practices are established. and then that might be a time where you see particular patterns emerging that you ink

thige tio address wthore >>nk. ist tioe tth you, mr. freis, and ms. martin. do you believe that international standards should apply to mobile payments, and if so, what typef coordination is ing on bweengurs coies ot >> happy to address that first. with respect to our anti-money ladering/counterterrorist financing efforts, we have devepedinatl ineser riard ertto mitigate them. we do that at a broad level in terms of different products including money transmission, not things that are specific to enngstmni f mobile ens and i believe that is the right

approach, especially based on the concern that you just expressed about the evolving technology. better for us to define the risks andecon h ti tanto ese epeca. by the time we had agreed on any international basis, it would already be obsolete in terms of technological advances. that is being done on an international basis, in particular through the financial acti taskorc pug r trtoon haa. i can tell you in my own work in the development of these prepaid access regulations, specifically including mobile phones as i've described in my testimony, i corp, ty engaged with my gury ahew thhohentirety of this process, sending them copies of the documents when we put them out for puic notice and comment, seeking from them examples of specific ces where they might have seen law enrcemt abtoesu

eregse >>nk yr. . in w agree with that. i would also add that i, it seems to me that this type of service is so new and rapidly evolving thait's a bit early strdatlulyintstthng um, generally those kinds of discussion come when systems are more mature and principles and best practices have been established. and th really hasn't happened yet. >> but we need to start thinking >>, eehham atartg iset me lapsed. >> thank you. i would like to ask for man now consent to insert the following statement into the record from the cfpb and the clearinghouse, and i'd like to recognize mr. ca for five mesor >>nk, mhand meg thth es for being here this morning. one of the things i want to ask, basic goal in reviewing this

topic is insuring that the consumers understand the product. i think that's very important, that they understand the heshng a r lvecve irt tdvancement of technology, we have seen security threats grow as well when it comes to electroc payments, specifically in identificationheft is a re coern l o u rrs onrs h when they encounter problems with unauthorized charges or the amount they are charged in inaccurate and that's a common problem that we have. especially people thatake advantage of a lot of our ni ses thon m lnleth k problem even though they get involved in this technique. i hope -- i open up for either one of you to respond. >> so to the extt amobile chngctch tsults in a debit to a

by or tila, those error resolution procedures would kick in for consumers. >> um -- >> but how will they be informed? because, you know, they may be recovered, but they want to coupheir m, at' rtthprm. ben tihmeg occurs and the time that their account is reimbursed? because that means money, and a lot of them are on fixed income. >> right. so the existing, for example, under efta is -- the existin m soin t atanouscd su i t b disclosures as well. i believe it's within a investigation has to take place within ten days. if the investigation is not concluded, the csums bu mes it gets concluded before -- >> will that consumer be informed of the process of what's going on within that period of time?

>> i, i can get back to you -- >> because if they don't know that you're doingnyth-- thocan sd - >> yeah, should be and doing it is two different things. [laughter] >> the other point that wanted to make is that those laws, it's not clear that those laws apply in all cases where a nonnk is vo. paprer h nan incorporated reg-e procedures into their rules and user agreements. it's not qte the same thing as bueyre tg uthly to them by rule, oceshieiwn leknr question along these same lines. consumers sometimes find miscellaneous or added administrative charges tacked onto their monthly bills. we used to see this a lot with obslhiau a loof cums to dispute

these charges. how consistent are the mobile payment dispute resolutions policies of the varis wireless providers, which is question number one, and should federal relatouramim tian? o t le provider, um, consumer dispute be resolution process would be something i think that the fcc would weigh in on. that's reay outside my area of thou t wf u bi p ll ame that you sent and that's wrong, what are your, what are your rights? and i think that that merits some further investigation and fact finding. >> okay. and thencoerone - mme re mor i was going to -- >> you actually have 58 seconds left, but we've just been called far vote, so i'm going to go to mr. ruth meyer because he's the

next questioner, and when h coteis w oth et's go ahead. >> thank you, madam chair. and thank you for the briefing the oh night on mobile payment systems. it was quite instructional, and after the meeting i told my s to htoetid omy ry phone. so thank you for being here this morning and just a quick couple follow-up questions with regards to my colleague, mr. can canseco here, asked a couple queions an mma,ma es to internationa enat'rino u taristu before you actually get in the middle of a regulatory promulgation here, and@kind of after the- it's kind of after the horse is out the door that apchre going to take tha w k ldan wngit t ti odgse and find ways to

curtail abuses of those right off the bat. i was surprised at th comment. >> yes, my remark tere was directed specifically towards international standas. >> well, that's what i'm ncerou rnna ,enlywh we work on international standards in other contexts, it's when we have some rules and thoughts in place about how that market is regulated here. all i'm saying is i think we tur ition cefwe sta- domestically before we start talking internationally. >> are you familiar with the proposed rule involving international wire transfer services >> i didn't want hear the first part -- wifpredle are youfaar alwiinteatnale transfer services? >> the remit dance rule? >> yes. >> i am somewhat familiar with it. >> okay. are you hard against it, think it's going to work? hois it going to effect mobile

payments, i ess es. t t'sod ti nurer are any mobile payment arrangements at this time -- and maybe, jim, you can jump in re -- that are >>ua t aom icoricil ym a p o international remittance network. as i've mention inside -- mentioned in my written testimony but are covered from regulatory frework ad, ngressman, jt on t reatatt f finn recognize the risks of cross-border payments. and it's for that purpose that although some of our regulations are subject to thresholds, oucoro a zerooctivity tts, y dollar threshold automatically

brings that payment mechanism including that mobile phone network into our regulatory framework and subject to all of those controls. rith ad cer w, one of the tif we impose an important regulatory framework on the united states but do not do something with the ality of entities from outside the country to acess, that would pose alnil epecaha a enretorark last year, taking advantage of the full authority that congress gave to us to assert jurisdiction over foreign-based money transmitter provirs to e extent that they areervi s.rs tyofulyrbrage, people from outside the united states. >> well, there's a couple of studies that have been done, the atlanta fed, swift, world bank. knowledge these new services had the potential to facilitate money lawpped oring. d, yow stu

codst ratta proportionate approach, advance financial inclusion and inre the soundness of financial services. what are your thoughts on those relations, or are you aware of those? >> yes, i am, and it exactly depm a promulgation of this final rule last year, and we will continue to monitor. one thing i can say is that something i instituted after joining the agency more than five years ago i a yearfter prga neule akt werit hig intended effect and then reconsider whether changes are made. it's something that we will constantly look at and will certaiy be doing in this area this aap-ein >>nk. yibalamy time. >> thank you. final question is going to be mr. scott, and then i think we

ll dismiss the panel. mr. scott. >>hankou.ai. aticldhe weo lose their, their cell phone, their mobile phone, what should they do especially in many regarding how they protect their vitalfoatio whatuleyoif to on beyo yr cell phone, make sure you have a pass word on it. >> i'm sor, you said pass word? >> password protect your cell phone. ani also think it is very phan tca i they lose their phone. so to have that information somewhere other than on your phone would be a very good step in helping you mitigate looullneyo

>> now, but o your side of things what steps would you as regulators take to make sure whomn, t know how and whennd d t do? i mean, it's good that they put their cell phone, their id and their password and all of that, but is there anything specifically they shou do? be should they just forget it? if, for example, iost my credit car i'moing ll stay oha t ought to be something or some procedure we could communicate to the consumer as to what u do particularly if that consumer -- they may not have the pass wore on it. -- won haso si there now who are capable of doing a lot of things with this advance in technology. so if we don'tave a procedure, we ought to get something out so

thos this precious how, wh, instrument. >> so think maybe who you call might depend on what kinds of payment, mobile payment applications you have on your phone. so if i d a mobile wallet wh edarta t do tl eamin it mlc. i would call that credit card company. so i think many of those procedures that you would already do if you lost your real waet would be the same things you would do if you lost your phone. mreio ha enon t ae dve nsumers? >> i think being aware of the risks is clear. one thing that must be said is that part of the reason why these paymt products, these prepaid whether it's throh a mole pne o a av reseyounydoha nlifou lost your

wallet with cash in it, if you've lost a card, you do have the ability to contact the provider to shut down that old card and get your money back. it'sot lost for gd. beetonss. d athou that it is important that they understand these steps to take to follow to get those funds back such as ms. martin described. >> all right. thank you, madam chairman. >> tnk you. anofur qtith aiulot tom ers may have additional questionfor this panel which they may wish to submit i writing. without objection, the hearing record will remain open for 30 days for members to submit written questions to these witnesses and to place their resps the record. co t.ewise kn ilveaor scon t evolving technology brings different challenges but also different opportunities. and i appreciate that. and with that, thisearing is