[cheers and applause] let's agree right here, right now, to keep the peoples government open and pay our bills on time and ours uphold the full faith and credit of the united states of america. [applause]

>> on facebook, we asked what issue do you want president obama and congress to address this year? >> president upon is expected to announce plans for federal contractors to pay employees at least $10.10 an hour. house speaker john potter was asked about the issue when he spoke with reporters today. here's a look. >> what do you think about these actions by congress? do you have any support? >> the president has the authority to raise the minimum wage for the federal contracts. that understands the game.

this affects not one current contract. it only affects future contracts with the federal government. i think the the question is how many people of this executive action actually help? i suspect the answer is somewhere close to zero. when it comes to the federal minimum wage, when you raise the cost of something, you get less of it. we know from increases in minimum wage in the past that hundreds of thousands of low-income americans have lost their jobs. and so, the very people the president purports are the ones who are going to get hurt by this. you look at african-americans and hispanics, they are the people who never a chance to get on the economic life. it's bad policy. it will hurt the very people the president purports to one

another. >> again, president obama delivers his state of union address tonight. coverage starts 8:00 east are not the stand with former obama speech writer john updike and historian don ritchie. the president speaks at night a stand with the covering response. that is live on c-span. after the speech, reactions from members of congress. >> consumer financial protection bureau director, richard cordray said today the agency received 270,000 ancient consumers. he testified before the house financial services committee. we are going to show you almost two and a half hours that this hearing, until a 25:00 p.m. eastern when the senate will undressed ascenders can make their way to the house chamber for tonight's state of the union address. >> the committee will come to order. >> without objection, declare

recess at the kennedy at any time. senator, purpose of receiving to be a semiannual report coming out recognize myself for for a half minutes to get up statement. this morning with welcome back mr. richard cordray, director of the cfpb for runners to statutory and annual appearances before his many. it's an important appearance because by design the cfpb is perhaps the single most powerful and least accountable federal agents he cannot washington and demands rigorous oversight. when it comes to our credit card loans, auto loans and mortgages of hard-working taxpayers, the cfpb has unbridled discretionary power not only to make them less available and more expensive, but absolutely take them away. it's not the rule of law. the rule of rulers and the rulers are unaccountable. fundamentally unaccountable to the president since the director can only but for cost

unaccountable to congress because to be refined and it's not subject to appropriations. fundamentally unaccountable to the course because doc frank requires courts to grant the cfpb difference regarding interpretation of consumer financial law, thus the pair regrettably remains unaccountable to the american people. the american people deserve better. i have now witnessed a failed stimulus plan. stimulus that we can witness on the monitors. revelations of domestic data collection and a broken promise that if you like your health insurance you can keep it. the american people rightfully demand accountability from this administration. therefore commit to, since november to make it appear more accountable and transparent when we passed six bills to reform the flat structures such as replacing a single eye, director with the board, putting their

employees, introducing a safety and soundness jack and regulations and giving american citizens greater control over personal financial data that was collecting and maintaining on them at this time. our committee took another modest centers greater accountability for the transceiver ran off the committee's website now offers an easy way for the american people to let us know how to bureau works, good or bad. since many citizens today justify and fear reprisals when it comes to speaking their mind about big government agencies, citizens stories and comments will be treated confidentially on request. we are already hearing numeracy that concerning the harmful impact on consumers of the bureau's qualified mortgage rule, which went into effect just days ago. finish a couple messages thank you. one, from doyle cooper, small-town anchor in texas used her website and gave us

permission to quote it. the results of dodd-frank and cfpb continued to be a burden each and every day. we have decided to suspend any and all mortgage products. we know our customers and their businesses. yet we are being asked to use it once i spent underwriting criteria to allow a qualified mortgage. the customers and our community have come to rely on us to hope their dreams have been and now we are being forced to say no, we can no longer help you. another small-town community banker wrote in to say this about the world. our bank has had to exit this line of business, and many mortgage lending. the bank cannot find a way to generate small bounce once in a profitable manner under the existing regulatory environment. i can't say the number of times they've had to tell her good looks and moderate income customers we can no longer loan them money to purchase a home to live in. one more story from the small-town community banker

outlasts. the community bank tqm role discontinued making a owner-occupied homeless. the bankers that a typical customer is not without a credit score with whom we've known all of his or her life and have made any personal loans to them over the years. often these are hispanic customers. 60% of our population in any more stable than so-called paul and secondary market individuals who are simply overleveraged. the cfpb has an important mission, properly designed and made it is capable of great good. stories like these dramatically show the very real harms the cfpb can inflict on low and moderate income americans. we can all imagine a brighter day with abundant economic opportunity for all, competitive market where consumers freedom to choose is respected. a day when consumers are protected not only from deceptive practices in fraudulent claims that may come from wall street, but from the

power grabs in excess of washington as well. until that day comes when the committee will do everything in its power to hold the cfpb accountable to the american people. the chair recognizes the ranking member for four minutes. >> thank you, mr. chairman. welcome, director cordray at the consumer financial protection bureaus 46th appearance before congress since its inception in 2011. despite debeer's extensive engagement with this committee with the past two years, the cfpb has managed to do more than just testify before congress to the contrary the cfpb has built an unprecedented record of success, protecting our nation's customers and consumers and servicemembers who have been victimized by unscrupulous corporations and financial

institutions. in fact, the bureau's enforcement actions have resulted in over $3 billion being directly refunded to nearly 10 million consumers and servicemembers. the cfpb has earned the trust of the american public. it has raised the carmarthen 200 xt 9000 were complaints, resolve tens of thousands of individual problems and answered more than 1000 questions posed to its online portal. director cordray come you are here today to discuss that being better semiannual report, which shows the bureau's continued success and effect to miss on behalf of consumers. in fact, the report shows in just one year, one years. , the cfpb received approximately 122,000 consumer complaints on issues ranging from mortgages, credit cards and bank and services to credit

reporting and student loans. these issues matter to her nation's consumers in the cfpb is ensuring when it comes to these industries, protect and consumers is the bureau's top priority. moreover, we know when consumers complained, companies listen. recently the cfpb has issued a number of important regulations that protect consumers from creditor financial practices. most notable is the qualified mortgage rule of which protects consumers by requiring lenders only make mortgage loans to those who can afford to repay them over the long-term. semi annual report indicates the bureau has continued its unprecedented success in enforcement actions against a wide range of institutions for unscrupulous actions. in fiscal year 2013, the cfpb was a party to 13 enforcement actions related to deceptive

marketing, unlawful debt collection, discrimination, unlawful fees in fraudulent mortgage of these schemes. i am truly proud of cfpb sat to success at the house of her nation active-duty military, restoring or than 12.5 million to servicemembers. i was particularly pleased to see in november of last year the cfpb took its first enforcement action against a payday lender, ordering cash america to refund $14 million to consumers for overcharging service members in court documents and data collection lawsuits. these actions are important and must continue. and significant republican scrutiny to potential data breaches and other agencies, the cfpb has actually helped consumers protect themselves from fraud and identity theft in

actual breaches such as the recent incidents at target and other major retailers. director cordray, i'd like to take this moment to commend you for the cfpb's impressive track record in the short hairs. despite all these successes, republican attacks of cfpb continued unrelenting their campaign to undermine the bureau is nothing more than a disservice to her nation's consumers and our men and women in uniform. i look forward to the witness' testimony and i yield the balance of my time. >> the chair recognizes the gentlelady from west virginia, chair of the financial institutions subcommittee, ms. capito for a minute and a half years that thank you, mr. speaker. i'd like to thank you for joining the committee this evening. less than month my committee has spent time learning about the new mortgage rules and what

impact on consumers. they are very concerned about their ability to offer targeted programs to help borrowers. questions come in and we like the west virginia raise concerns about his bank to continue administering a charitable trust that assist low-income borrowers to realize the dream of ownership. two weeks ago, the executive from orion federal union in memphis raised the same concerns that many have visited the taylor government to purchase program will not fit the qualified mortgage standard entering the same hearing, the ceo of charlotte testified that as the regulation stands today, habitat affiliates remain at risk of debilitating liability. in each of these cases, and local lenders losing their ability to serve their community. under suicides a virus ability to repay will be handcuffed by arbitrary threshold and a

one-size-fits-all. unvaried air and what we'll end up with in this q. admiral is hurting those low and moderate income i respect us who need the flexibility and ability to ascertain a mortgage. i look forward to hearing your comments on that and i want to make sure these binaries are not left out of the system. i yield back. >> the chair recognizes the gentlelady from new york for a minute and a half. >> i think the ranking member and chairman for calling this meeting about some director cordray. in just two and a half years, the cfpb has made huge strides in a number of important consumer protections. for mortgage disclosures to credit cards to remittance transfers to protecting servicemembers. the cfpb has also this published itself as a data driven agents be. it's rulemaking process has won praise from industry advocates,

democrats and republicans come in the bipartisan policy center describes the cfpb qm wrote writing process as i quote, a commander in baghdad and research and focus on practical application in the mortgage market, end quote. there's still plenty of work left to do. the bureau is working on important issues such as prepaid or regulation, payday lending, debt collection, credit card overdraft policies. these are clearly issues that merit attention from the cfpb because they affect a large number of constituents and consumers on a day-to-day basis. as one who helped author the requirement of the semi annual report to congress and other provisions in the cfpb law, i look forward to director cordray's testimony today. thank you for your hard work.

>> to turn a recognizes the gentleman from new mexico, mr. pearce for one minute. >> thank you, mr. chairman. again, we appreciate your appearance here today. we have heard in previous hearings and in this one that your job is to protect the consumers they do you in fact yourselves stay your focus on making financial markets better. i believe the several states like new mexico, you're making the market first. i would call from a banker, hard-working people in rural new mexico are being denied access for purchasing a manufactured home because of cfpb policies. policies are hurting the small guys. a site is maintained and never hearing we had so far. tenure at times to protect melody and access to credit. 50% of the homes in new mexico

or trader houses and because of that, almost all of our lenders are out of that market. 25% has gone out of loaning money for houses completely. you are hurting new mexico with a two express our position in this hearing. >> the time of the gentleman has expired. the chair recognizes the gentleman from texas, mr. green for a minute and a half. >> mr. chairman, day to yield 30 seconds initially to mr. capuano. >> mr. cordray, you're doing a great job. keep it up. >> thank you. thank you, mr. chairman. i think the director for caring. i would like to thank mr. dodd and mr. frank. i liken them to benjamin franklin who were questioned after the constitutional convention of 1787. the question was whether we have

a monarchy in for a republic. his response was we have a republic if you can keep it. today we have a consumer financial protection he wrote. the question is can they keep their? my hope is that mr. dodd and mr. frank had done in requiring the semi annual reports will give us enough empirical evidence so as to convince the public and members of congress this agency is vital and important. with this agency having returned $3 billion to 9.7 million consumers, that speaks volumes. i would also add the question is whether or not we would have received this $3 billion place back in the hands of consumers if we did not have the consumer financial protection bureau. my suspicion is probably not. i'll ask the direct her to elaborate at a later time.

we have it. the question is can they keep their? i yield back. the chair recognizes the gentleman from wisconsin, mr. duffy for one minute. punic thank you, mr. chairman. i'm here with a hopeful heart to the director is going to renew his commitment to provide is so thin and transparent testimonies consistent this promise and the promise made from the cfpb to the american people. i'm interested in hearing testimony in regard to the data collection program. specifically the extent of the information collected on the american people and the extent of disclosure the american people get when you collect and monitor information on their financial trend actions. i'm also interested in hearing about the civil penalties on, how you find the dems, designate victims, decide to reimburse the nuns. we are where you're provided 14.6 million victim compensation

yet i'm also interested in hearing about because of education and financial literacy program revisit it or 10.4 line for the education. but us at the 96 million unallocated in my content of these to those dollars are. with that i yield back. >> the chair recognizes the gentleman from connecticut, mr. hines for a minute and a half. >> thank you, mr. chairman. welcome, director cordray. i'm glad you are here. i was heart by the discussion we had a ton ago. were committed to your mission and appreciate the limits of your mission in the media had to not overly regulate them is harmful for economy. i'm glad you are here. you will sense that is my sentiment universally shared in this room. as the chairman said, they offered the opportunity to offer storage about the work you do. i got reading the survey. they point out your location massive data collection effort gathering financial information on millions of americans cannot

impose snoopers and regulations and job creators get it goes on and on. and my business this is push polling. it is fear mongering and apart from the entertainment value of this white-hot partisanship, i got to thinking, what about the stories that can't be told? but how does one tell the story of a predatory loan that didn't bankrupt an american family? how does one tell the story of the liars that didn't get made in the family not sitting on the curb bewildered, surrounded their meager belongings. this is where we were with the majority would put us back in it's worth remembering that. it's also worth pointing out that dallas had produced a report putting a price tag on that tragedy and they said that price tag per american household was fishy to not $120,000 per household. talk to cordray, thank you for the efforts to make sure that

never never happens again and i yield the balance of my time. >> the chair recognizes mr. fincher for one minute. >> thank you, mr. chairman. welcome, mr. cordray. i read you are somewhat familiar with rural america. i too live in a small can a tennessee where we don't have roadside in the entire county. i spent my lifetime in embarcadero communities. you may not realize the manufactured housing plays a significant role in the lives of many folks who live in rural communities in my district and across the state. for many families, this may be the only home they can afford and that just starting out, sometimes rental properties are not abundant raw areas. starting this month will be harder for families to get a loan to buy manufactured homes. i am concerned for cfpb is cutting off access to credit for the 100 come home buyers due to do was implemented this month. i've introduced legislation h.r. 1779 as preserving access to correct this problem in its

received bipartisan support with over 100 cosponsors and a companion bill in the senate. clearly this is a problem for a lot of members i am hopeful we can work this out before families across america as much of that access to financing. >> the chair recognizes the gentlelady from arizona come in the cinema for minute and a half. >> tractor cordray, thank you for recognizing difficulties faced by homeowners in my state and phoenix have for choosing to hold a hearing to kick off the consumer financial market rules. as you know, one of five arizona homeowners that they were engaged still owes more than their home is worth. across the country, the numbers roughly one in 10. as of december 31, the cfpb this was it on the six dozen including over 2500 mortgage related complaints. in my constituent, and there is

one of these homeowners. merry lost her job. she's attempting a short set with her bank, but the bank refused to accept the terms of the deal to unnecessary preventing silver property. problems are and this and should no recourse issues at the mercy of a bank teller the cfpb helped facilitate a favorable outcome nonetheless married to move on with her life. arizona's homeowners are still struggling we must do everything to help them. the cfpb's mortgage rose protect every stage of the process of getting the right mortgage to pay back the loan and they provide hard-working families reasonable safeguards against that mortgage deals for good credit and cost families thomson financial security. the has enforce protections for active-duty military families, restoring millions of dollars to service members in the military lending act. this is a huge issue in errors or not. thank you. >> the chair now recognizes that generally from missouri, ms. wagner for one minute.

>> thank you, mr. chairman. it is unfortunate by no means surprising the worst fears and predictions of consumer financial protection have already come true. earlier this month, our committee learned organization such as habitat for humanity as ms. capito referenced are finding it more difficult to help low-income families and homes. many of us have heard from her community banks that are altogether leaving the mortgage business or seen compliance cost absolutely skyrocketed. regrettably companies such as this is all too common in scipio's inception. weathersby on fairway about moderate american and under the mortgage rules, the deceptive public database of unverified complaints that only serve to mislead consumers are the abusive manner in which the is spending money and irresponsibly gathering financial information of american families.

it is clear by now the federal bureaucracy is crying out for reform. i hope today's hearing hopes to shine further light on the bureau. i thank you in the outback. >> today will from richard cordray, director of the cfpb. director cordray has appeared before a messiah believe he needs no further introduction. that objection, the written statements will be made part of the record after his oral remarks. director cordray, welcome. you are now recognized by testimony. >> thank you the chairman has to like working underwater scuba members of the committee for inviting me to testify about the first in the inner part of the consumer financial protection bureau. since we opened our doors over two years ago, the bureau has been focused on making financial markets were better for consumers and honest businesses. representative hinds county you're such a sharp one is glad to see me today. my senses different. they may have different reasons.

the report we discussed today describes the efforts to achieve this vital mission. through fare rules consistent oversight, appropriate enforcement of on broad-based consumer engagement to help ensure trust in financial markets. through collaborative verse that work with regulators, would put approximately $3 billion in the pockets of millions of consumers who thought the end to various violations of consumer financial protection laws. as a refund of $6,000,000.2000 with service numbers is something to disclose cost associated with repayment on a list of the military system and expensive auto loan sought to active-duty military. because his supervisor were come institutions make changes to the management systems prevented violations and results in financial restitution in many thousands of additional tumors. that is good work by supervision team can make good business practice for companies and good for consumers who desire to be treated fairly under the law.

over the past to reconnect the number member of to meet the mandates of the dodd-frank act, which i understand will talk about today. this important role requires mortgage lenders to make a good-faith reasonable determination that are as can pay that their loans. at the back to basics approach to mortgage lending. enacted a mortgage servicing was assigned to clean up sloppy practices and ensure fair and more effective processes for troubled borrowers who may face the loss of homes. we talked a remittance rather provides transparency and consumer protection for money transfers for the very first time. the consumer has been closely focused on making sure businesses small and large have what they need from a practical operational standpoint to understand and comply with the new mortgage rules. without plain language versions of the rules created to be okay and i met with active players on a full range of industry stakeholders including vendors and smaller lenders.

we worked with regulators lobby for the implementation phase though industry understands expectations and has necessary adjustments. with coordinated at the regulators to ensure we have a shared understanding to promote the supervision of compliance with these rules. while we work on all these important efforts can we recognize consumers bear their own share of responsibility for how they participate in the financial marketplace. we need to promote and fund financial decision-making so would provide consumers with useful tools including the cfpb section never would say we are answers to 1000 kreegel has consumer questions. i encourage you to encourage your constituents to use these resources. send them to consumer finance backup to gain the benefit of this unbiased financial information. the premise of ice at the heart of our mission is consumers deserve to have someone stand on their side and the very treated

fairly. to this end, the bureau strengthen opposite consume responsibly for receive 270,000 consumer complaints on mortgages, credit cards, student loans, auto loans, bank accounts, credit reporting, data collection and money transfers a venture to say in everyone of your districts across the country. we've received thousands of privacy among complaints and nearly 30,000 comments in response to a request for public information about how students and is individual consumers and the economy were generally. i feel here in miami unsuitable and that it it became clear this nature but similarities between the financial crisis. the burden is having a domino effect by jeopardizing the ability of young americans to buy homes, start small businesses, save for the future. we consider priority to monitor this market close as it develops over time. the progress of last years is impossible to engagement thousands of americans whose

user tools, submitted complaints, participated in the making since august reeser website and numerous public meetings coast-to-coast. progress reflects cooperation of those who regulate. we tend to remain consider the challenges they confront. each day we work to accomplish goals of renewing consumer trust in the marketplace and ensuring markets for consumer financial products and services are fair, transparent and competitive. these goals not only support consumers as they climb the economic ladder of opportunity, but health response will businesses compete on evenhanded basis and reinforce stability of our economy as a whole. mr. chairman, i self-interest yesterday the announcement the committee would be excepted service of the american people about the effects of the cfpb on their daily lives. that will provide good data on what our work is and how its effect and people across this country and we hope and expect for transparency and unders and the stories are receiving from people across the country.

we have confidence in the stories they will tell. thank you for the invitation to appear before you today. i would say for according ben franklin, during the revolution we must all hang together or most assuredly we will hang separately. as i was among the bulk of your oversight in a fight to have the opportunity to hear and address your concerns. thank you very much. >> mr. cordray, the chair recognizes himself or five minutes. mr. cordray, i have no doubt the majority of this committee feels your agency is unaccountable by design. we are increasingly concerned it may be unaccountable that are assessed well. as you can tell from the monitors, the majority also are very focused on the unconscionable, unsustainable and frankly i'm more dead immature children. so how you expand the people's funds is a very salient issue.

your last for the senate banking committee in november 12. u.s. ray senator coburn who has to can you tell me why we need a $95 million building? i believe he was referring to your renovation budget. you answered by the way, we do not own and i would rather not spend a penny on it. you were not to say the hvac and electrical apparently has three product is not then finally quote, it is not what we are building some palace for the bureau over the long-term, unquote. and now i discover on december 16 of last year, the bureau released its financial report. is it not true on page 39 of the report to headquarters renovation costs is not jump to 145.1 million? >> i don't believe that's correct in terms of construction costs. der cosby are using peer >> this is not part of the renovation costs on page 39? >> we are using gsa two of us

need because we have received scrutiny and much to make sure things are done right. >> let me ask you about the gsa. as i understand that come in the gsa leases 354 million square feet and 9600 buildings across 2000 communities in near $145 million renovation budget now is equivalent to over half of their entire annual budget nationwide. we are aware that? >> i don't know much about gsa's operations. that's not the agency had run. what i would say is they're the experts dealing with these projects. >> is 145 million merely to update the hvac and electrical quiet >> no. there's been different numbers

here and the most recent number iciness 114 million. what i am told is two thirds of it is required in order to upgrade the basic building. we've got a tough building. when i say bach, with lisa tuff building. >> so it not your building? you are renovating the building you do not own? putting in almost as much as the entire value? i'm trying to get some comparable real estate costs. as you say, we're not building some palace for the bureau over the long-term. apparently come your renovation cost is now $483 per square foot, which is triple the typical washington d.c. luxury commercial class a luxury renovation, 150 square feet. three times as much as that the signature area. the trump world tower you spending more per square foot on

the trump world tower which came in at 334 square feet. you spend more than the bellagio hotel and casino most of the time is the most expensive as built 333 square feet. if i'm pronouncing that's right, you are more expensive than the birch khalifa, the tallest skyscraper in the world located in dubai came in at $450 or square feet, which is rsa quote, unquote, world-class destination, new carpet masterpiece, superlative in every respect, designed by the world's most is deemed designers, one of which is the architecture will scare him skidmore, which the bureau pay 7.5 million in order for architectural and engineering essays at your headquarters. so here is bill. what on god's green earth is going on here?

explained to me, mr. director, why i shouldn't be outraged and with the american people should be outraged. >> thank you for asking a question, mr. chairman. let me restate. vision on the other. it is an asset by the comptroller of the currency. we have leased the building. the renovations performed there will make building serviceable far outlasted the time of our lease. the notion we would build some palace we don't own or control doesn't make much sense to me. >> you're spending the money. >> if i might finish. i am told we have to do certain things so the building can be brought up to code and work properly. we will have to vacate the building might or not. myself and our employees, none of this is something we prefer to do. we worked with gsa to understand what space is available in washington d.c.

there's limited space for an agency -- >> my guess is jeepers base could be found in the american taxpayers. >> with a two run to surrounding as well. >> i'm beyond my time. the chair recognizes the ranking member for five minutes. >> thank you very much, mr. cordray. allow me to apologize for my chairman because i got you politics. you are here to give your semi-scandal report and supposedly thymus of congress, we are here for oversight and to work out problems. i could ask and talk a lot about all the good work you're doing. men and women in uniform, predatory lending, payday lending, we've alluded to some of that in her opening statement. you know, i wish you talk about solving problems, not give political messages. i heard some of the members on

the opposite side of the aisle talk about manufactured housing. to tell the truth, the chairman and i are interested in providing leadership, we would be working with you and the members to deal with the issue that keeps being brought to our attention. would you please give me your take on what is happening with manufactured housing what are the differences here? what can we do to solve this problem? >> thank you, ranking member waters. i do think the chairman's questions are fair and i want to have a chance to address them fully because as far as i'm concerned, this is an unavoidable one-time expense we simply want to put behind us and again, it is not something i would choose to do if we could avoid it. in terms of manufactured housing, appreciate the representative from tennessee. i have family who have lived in the manufactured housing. i went to school with many of my friends and other children who grow up in manufactured housing in my area ohio.

it is a useful, beneficial and often import housing alternative for people particularly in rural areas. arendt manufactured home loans go back to the changes in the poker rule and before that there was a certain retreat from manufactured home lending at that time. we had executives to the american banking association states many people who retreated at the time because they feared inability to pay for a comeback into the market realizing they overreacted. there is further concerned with the ability to pay regime and the qualified mortgage will. i personally have met with leaders from the manufactured home, both builders and lenders. we'll continue to meet with them and i want to understand their concerns and what we can do to address it. i recognize in parts of america,

this is the premier alternative for putting a roof over people's head in getting a chance. we want to make sure that happens in to the extent we can address there can turn to monitor the market to see what the effect is as opposed to state predictions that are easy to make. we want to know what's happening in the order to address those concerns. >> argued with the rest of the time to address those concerns. i want to work with you is my chairman. i care enough about this issue to spend some time on it. we work with you and see if we can't convince him that if members on his side of the aisle have concerns about new country in manufactured housing. >> their special difficult i on which you would put in manufactured home on the lawns around us. inevitably, those are specialty properties. we've heard the representative

from west virginia in southeastern ohio that i'm familiar with in my area ohio. there are lots of places you cannot necessarily build a home in the down foundation. the manufactured home provides alternative to that. some are pretty basic, some more elaborate. the bottom line is it is a useful piece of the housing market. it's a necessary piece in certain areas. many of those phones are lowered our lord wants, so there's issue imposed cost becomes larger as the pictures mauler dollar loan and that is how we attempted to build it. to the extent is any modification or change the needs be made to make sure the market can work, we're all ears or we will continue to be all ears to the members of this committee and also those in the industry and consumers who are affected by the rule. >> you've done such a great job of solving problems and providing leadership. i would like to meet with you on

this issue because we need to demonstrate we can talk difficult problems no matter the chairman and willingness to work on this issue and resolve that, but rather simply to the political messaging. i will meet with you on behalf of not only our constituents on the side of the aisle, but it can issue a he fails to pay attention to. thank you earn much. >> the chairman recognizes the gentlelady from west virginia for the nationalist or two should. ms. capito. the mac thank you, mr. chairman. that start with the half step for humanity issue. i expressed this a private indian and i'm concerned about the impact folks who have the nonprofit that are right to run programs for habitat for humanity's little fielding on firm ground in terms of the rules to move forward with their program and give themselves a level of comfort they can move out of the way they've conducted business in the past mulches

work in with families individually. they think they need more legislation on this issue. we are ready to do that. what is your response to that? >> i share your concern about these issues. let me go back and review. last year were qualifying, habitat humanity came as several concerns about the ipo. we told them we share those concerns. we worked with them. we with vancouver's identity supplemental sat down at a supplemental proposal that was her post and finalized in may or june of last year that provided a broad provision for coverage for title one c. three charitable work nations such as habitat. my understanding of the time was that address their concerns. now we've come to the end of last year, beginning of this year. they've identified additional concerns they did not present at that time, the new concerned. i understand circumstance change.

we've been working to figure out how we can address this can turn to any further activity. had a conversation with the ceo for habitat for humanity yesterday to walk through specifically three issues they have. >> if i could cut you here quickly coming to think these can be solved in your space? >> we do. >> how quickly can you respond quick >> of i asked directly what kind of timeframe are they looking out for this will pinch them. by the way, the main one involves how you characterize first and second lien, which was an issue -- >> seems if you identify the problem, we can have the fix if you or me know. >> i would encourage rulemaking in the light. only six affiliate are affected by that. of the six, they all would be addressed by the discussion we had yesterday.

we will move forward to address those. we can address these by regulatory means and we've made a commitment. >> would have encourage you to do that. other programs don't have the voice habitat had. in your statement, you mention the qualified mortgage rule requires lenders to make a good-faith reasonable determination virus can afford to pay back their loan. if i was reading that, i would think you're getting bankers or lenders flexibility to make determinations yourself. that is not what it qm wrote us. you write the mortgage of tenet and if it doesn't fall within that, this is not just me speaking. these are testimony after testimony after testimony from credit unions and community banks who feel they are not able to have the flexibility to give the farmer, med student, single mother the ability to get the home because they will not fit in. my question is how -- what is

plan b? how long will it take before you see and we see what effect this is having in when are you going to be able to react to this? >> i could not disagree more. i remember we finalized the rule. we saw a press release before anybody had even read what we did same one-size-fits-all. it is not true. we had a special provision for small creditors. it covers thousands. if they keep lonesome portfolio, they can do anything they traditionally have done in terms of lending. we trust them on the lending they do. many when we hear these complaints and i call them and speak to non, may have been understood that was added to the rule and we'll continue to get the message out to them. for small blender, less than 2 billion asset extreme 500 mortgages a year.

every mortgage covered by cliff at mortgage rule for small creditor provision. >> the best thing for the two of us is to wait and see two months or 30 days. six months, one year. family after family after family affected by this. >> data comes out every month and as i say to you when we met, we are open to hearing what the data shows and also stories. >> are your comment cummings said publicly we will have flexibility that tells me turn signals to me you know there are problems ahead. >> not correct. in the beginning can we make further changes in the role. we made a number that your response but we heard from people. we are open-minded agency. we don't want to have some unexpected effect on this market. >> the chair now recognizes the

gentlelady from new york, ms. velazquez. >> thank you, mr. chairman. director cordray, in 2012 for cfpb has been credit bureaus. as you know, the personal credit rating with small business owners can have a direct impact on our ability to obtain financing for businesses. can you provide an update on cfpb supervision of the consumer credit reporting market and whether it is having a positive impact on small business owners access to credit. >> thank you for the question. we have now undertaken for the first time to provide federal supervision of the major credit reporting agencies. it is an adjustment for them. we've had each of the three largest credit reporting agencies and their serious issues we have been discussing

with them in areas concern. as a result of our efforts come you may have seen the credit reporting agencies for the first time are forwarding information consumers send about problems and errors in credit report to be evaluated. before they were simply taken the information, translating to one number code and not actually sending the information along to there is no way to evaluate whether you're writing sandy was an air in credit report. that is a big change and that change continues to evolve. we are concerned about their wares. we are concerned about your resolution and we are concerned about the handling of data. they know we are concerned and we will work hard to see these things are fixed. for years, the industry was pointed away from his numerous. it was a business-to-business industry. credit reporters at furniture is in providing information to

lenders. it has dramatic impact on consumers among many who now have their credit report check may apply for a job, all of them have it checked when they apply for a loan and it's an industry that needs to take seriously its obligations to the american public. >> well, i'm really concerned about access to capital for small businesses nfa have errors without recourse to have a negative impact on their ability to ask is capital financing. mr. director, section 1071 of the dodd-frank act report credit application data on phone businesses as well as minority and women-owned businesses. can you elaborate how collecting this information will help enforce fair lending laws and enable lenders to identify opportunities for improvement in underserved communities?

>> we do understand that is the intent and purpose of that provision of the law. it is a difficult area for us frankly because we have nothing to do with business lending commercial lending or small business funding other than that single provision. we are determined as we undertake the rulemaking we are required to do under the act to cut it to mauritius grocery sector will, which we are underway with now, we will see how we can for the small business lending element into that as we develop. we will be overhauling the database, working with a fad and that seems like the right approach. we very much want to work with the small business administration, the people were asked in this area than we are. >> when can we expect a cfpb for rules? >> the overhaul is getting underway now this year. it feels to me the right spot for this and we've talked to a

number of folks in industry and consumer on the two make this part of the later stages of that. it is coming, but not immediate. >> is required by section 1451 of the dodd-frank act, currently developing informational materials to educate the importance of home inspection. these inspections are simple, cost-effective way for borrowers to identify problems prior to purchase and reduce teacher risk of foreclosure. do you expect cfpb adopt similar regulations to help educate and protect homeowners under your jurisdiction? >> so i'm not entirely sure what our authority and what had the authority would be and how they overlap. i find it remarkable when you asking a question. 23 years ago, one of my first post ever saw the residential

real estate disclosure act is exactly the problem you're describing. i may know it has termites, but the buyer doesn't know any of that. if i don't do anything, they'll get a ride deal or maybe there's problems in the plumbing or electrical, but they wouldn't know. to sum up making disclosure requires either be a fair back and forth across the table. i find it remarkable 20 years later we talk about the same thing come to see legislation in ohio enacted at that time. it seems that the basic principle of fairness and if we can work with hud and i don't know who should do what. >> the time of the gentlelady has expired. the chair recognizes the chairman emeritus of the committee, mr. baucus or five minutes. >> director, first of you appreciate manufactured housing, commonly referred to sometime this mobile homes. in the south, they replaced tarpaper shacks often without

indoor plumbing or electricity. they are many times the only affordable alternative. i would like to continue to work with you as you refine your approach to landing. we've had many conversations and i know you have with jerry moran and the senate about automobile lenders and direct automobile lenders who go to auto dealers to make loans. you have issued a direct to or bulletin. i think it is clear you can compensate these dealers with a flat fee per transaction and there's some move in the market to go to that. you've also indicated other nondiscriminatory practices to

compensate automobile dealers other than the flat fee. i know you've been asked before to be more specific about what may be some of sorry. he said because i think there was the collection which was resolved in december he didn't want to go into more detail. or could you give some other examples of how to interact out lenders can use a flat fee system you might guess, this is a good example when a stranger respond to representative capito, if you're having to think about changes, and must meet think there are problems. it doesn't mean that. we don't know at all. we are making our best judgment at the time. if there's new information in it sounds like there's something that occurs to us and is brought to our attention that we didn't understand or appreciate at the time, we are open to making changes. in our bulletin, we made it

clear flat fees are one mechanism by which lenders could address this issue. it ain't no means the only mechanism. my real answer to your question is i don't know we know what the mechanisms get that would be satisfied very and we are open to auto lenders and bringing those who are attention. reduce a flat fees are one possibility. a flat percentage of blog to be a possibility. some combination of different durations of the loan, different levels and potentially other things we haven't thought of that others in the industry may think of and bring to our attention. we are open-minded on that. >> as you make determinations on alternatives, can you make those public, to? >> we will. as we become convinced of more and frankly other alternatives we describe have come from further discussions with auto lenders who said what about this, what about that?

we are open to having further discussions. were trying to be very careful because as you no doubt recall in dodd-frank, it is clearly defined we do not have jurisdiction over -- >> share, i understand that is limited you to certain -- but i appreciate it. they want to know, what are some alternatives? >> we wanted to be careful not have people think -- >> or reinforce those, in the ticket to the point again knowing what what they can do. >> fair enough. >> many people get my constituents and other collar card services, which is a fraudulent enterprise. i know the ftc made a settlement in december with some of those people. i can say the calls have

continued. .. financial products that appear to be sponsored or promoted by the government or approved by the government. i have one example that just came yesterday. >> it looks pretty good. >> and if you will -- how would

like some discussions on that carried it is getting defend the u.s. government is inviting you to do this. congress is authorizing this. >> it is a terrible practice. seven senior levels attorney general in ohio. people america government because it has a certain amount of credibility. we have been -- only have the opportunity to enforce the taken very seriously. we salute the market for of the legitimate programs and it undermines all the honest self respecting businesses and trying to do things right. >> the time has expired. vigilant that recognizes california. >> the financial institution must take an incredible low. congress is a step up. supply. >> on the ability to repay somebody wants to mortgage their

houses are the business. a risky business your rules imperil the bank that makes that low knowing that the very same consideration that the banker has always given. they try to assess their ability to repay. >> zero one into an chance you will be a billionaire and by the bank. 50 percent chance of your business will go down. is the bank in effect punished? >> no. at o.c. -- >> but in all likelihood the borrower cannot repay. >> the bank has to make reasonable determination in good faith within that low would be repaid. that is their judgment to make. all they have to do is document

that they did that. if it's a reasonable good-faith determination than this totally satisfactory. banks have to make these judgments about the risk they're taking with their capital. >> and that is a different kind of loan when you know that there's to in a good chance your going to have to take the home were forced the sale. >> the simpler what you are describing the become an actual commercial loan. >> i want to pick don't -- take upon her questioning. with regard to the affiliation, are you formally studying the discrimination on the affiliated -- i mean, as a consumer i could not care less whether make tunnel company is affiliated are unaffiliated. that is what the best possible deal. are you looking formal yet have a fix that?

>> they did seem to care and in various places they wrote and concerns the protection, affiliated entities where there would be steering. >> adelle want to use steering. >> on the other and affiliated entities can provide more efficient one-stop shopping. i've talked to a number of the people in the industry who are affected by different aspects of these rules. we have said very clearly we're interested in with the data will show us and have that intersects with the 3% point fee cap, and we're interested to have them come and show us what they're finding it what they are experiencing. >> i hope that if you see a need for legislative fixes that you will -- they will be back to us. >> we will be receptive to take a look at as low. >> okay. with regard to automobile dealers, there's a lot of controversy.

of course the equal credit opportunity act is something for you to focus on. as it happens in our society, those with lower incomes or lower credit scores pay more for credit. it's more difficult to arrange a loan, takes more time and, of course, there is a great risk. in the work you're doing, do you believe that the cfpds sought considered inadequate input from the stakeholders on the issue of fair lending in vehicle finance? >> at think we're always interested in having more. frankly, i will say that we have had more in the last six months than the six months before that. it has refine our thinking in the supple to us. it is, as you say, typically the way of the world that the tougher it is to make the loan the more people have to pay, and that's a credit worthiness determination. that is fair enough. what we think is problematic is

when the credit or the determination has been made in there is a rate that is gauged, some of that rate would be pushed up because of the financial incentive for people to push that empire at these events of the consumer. we saw that of the mortgage market which congress acted to step up. it's not quite the same dynamic in the on the lending market, but there are some similar concerns. >> i yield back. >> the chairman recognizes our capital market subcommittee. >> chino, is to edit your comments out. the chairman's question you unlash flagrant spending. we should also agree that someone is to stand behind the american taxpayer that -- your

agency as someone else as was testified. one of the questions we put back to you in september was why is it necessary for the cftc to collect consumer credit card information on so many? millions to combine data collected representing eight to 90% of credit-card accounts. the census bureau projects there are over a billion credit card accounts held by over 100 million cardholders. it appears that the cftc is collecting account level data on at least 991 million credit card accounts which would account for literally 60 percent of the adult population in the united states. as the question, why is it necessary to collect so many credit card accounts of some americans? >> a couple of things. i do strongly believe that the bureau is needed in congress

passed the measure is a created the bureau to stand on the side of consumers and see their treated fairly. and also agree that the bureau of these people looking over our shoulder to see that we are held to account for how we do what we do which is this committee and others. that's why i'm here today. i am here regularly, as you know. as i said at the time, the purpose of this information gathering by any agency is to be able to make informed judgments about policy. you would not want as throwing darts at a board. >> it's my time. says he did not answer the question is still have not answered by the number, i went and asked the chairman to put in my letter the about to submit and also the response of dr. thomas stratton, press officer of economics. >> without objection. >> an expert in economics and the look to what you have been doing. asked interview how many to over 900 million to a this is what is said.

this siepi be is collecting it far more data than necessary. expensive data collection, expensive and risky. the census bureau will achieve even the same or better results. do so by making a granular data available to researchers and one to 5 percent statistical numbers. why do you seem to need more data, 70,000 tons per cent more than what the census bureau does for their data or anyone else does and that matter. >> with all respect to the professor, i don't mean to discourage him, and learn there are economic experts on about $0.16 of every issue. on this low we have family work with industry and are collecting information for them the very same with other agencies have done so, they often prefer to provide it wholesale rather than themselves having to go wind faugh a sampling device six.

it's easier for them to provide the inspiration. that has been our experience and is why we have proceeded as we have. >> tea till the consumer the you're collecting this data? collecting data. >> we had this conversation the number of times. we are not collecting information about mr. garrick or cordray. we are collecting and related information that is aggregated before it comes to us about what credit card issuers are doing to their customers and now they're treating their customers. that is our focus. >> let me clear the record on that. i have been disallowed the contract were you collect some of this data. some of the information you're collecting, charlie you don't have my name or address. with regard to one of the contracts, you do provide the zip code and the four digit zip code after it. you also provide the date of birth. let me tell you, if you have my

zip code and my last four digits in june know what my date of birth is to mothers only one guy in my house that has that. the government neighbor and his house, you know what his daughter's birthday is to begin collecting that type of data according to your contract. >> your not the only house in your zip code. there are tens of thousands of houses. >> you'll also collecting the four digit zip code afterwards which goes right to my house. >> we don't have information or we are trying to -- >> reverse engineer anything. >> this is your contract. >> this is no longer the credit card but some other data collection. >> experience information solutions. >> you talk about credit reporting. again, we ever if the date it, and that is what we doing. i have no interest to where you spend money and no one hemline help. have no interest in what i do. the private industry does. it wants to know what your doing so they can market to you. we are about the aggregate information's to weaken the tour with toy gun in his market

silicon bring law enforcement actions against people. we can get money back to consumers. >> the chair now recognizes the gentleman from the york for five minutes. >> they key. appreciate you being here. coming from a state where as i think i stated, were keeping a busy. complaints in regards, especially in regards to mortgage complaints. nothing the keeping busy. appreciate the work you're doing . i want to also just briefly said that while the court to continuing to work with you and to work with you in the area of manufactured housing. it's important that we have a voice and try to fix. so i want to add my voice to the many that are looking forward to working collectively in resolving and working with you on manufactured housing. i look forward to doing that. it's important for us to work

together to get that done. let me -- my issues, trying to help. i come from an area @booktv should the sec come. i have lived the life myself. my parents who were struggling. banks, you know, were not qualified. but still they needed certain credits to make ends meet. you know, working paycheck to paycheck is a common thing. going to a bank is not available to them. therefore they go to products that are non-fatal. i have been working very closely trying to make sure that they have access to some credit, to number eight institutions. i've been working with my

colleagues and the other side to try to get something done there. but i want to make sure that the products are safe. what to make sure because they're is a statement that it is extremely expensive to deport so i was wondering if you could tell us how the cfpb is making sure that underserved consumers will be able to accept affordable and better suited products from their regulated creditors. >> thank you for the question and also for the background. we have known for years that it is expensive to be poor, particularly where you don't have to approach the services being offered to you. we recognize that there is a real need and demand among the public for small dollar credit. as you said, particularly for people who don't have direct access to the banking system. but whatever those may be. we have been careful in trying to assess the actual dynamics of

that marketplace. we put out a white paper last year and paid a lending and on the deposit products by banks that was in many ways very similar, has been very similar to pay landing. look at the need for that credit and have it is being met. one of the problems and concerns that we have is that the business model seems to depend on a significant lobov consumers who end up rolling loans over six to may, ten times. the end of living their lives which is not benefiting them. there are others who use these products and can get out of them and it meets their needs responsibly. it is not solely pay the loans, car total loans to a certain types of installment loans. pawnbroking. it is a somewhat complicated, a dynamic market. we have indicated that we will move ahead with making some policy judgments and regulations in this area. we will, but our concern is

exactly yours. we want people to have access to the credit they need. the kinds of products that will make things better, not worse. and there are many complicated an image around that. >> that is important. i could tell you, you hear the words just get rid of the products. in those folks have no resources and end up, as i have seen, some of my friends when i was, the loan shark. as the personal want to make sure stays of the business. not only recommended to some bad things. the american banker reported last week that t-mobile will be joining a growing list of companies that are enabling consumers to bank without going to banks, but offering the relatable prepaid visa card. can you tell me what to see if pbs done, researcher comments. >> it is a great question, something we watch closely and is a concern of mine temecula stay ahead of the fast-moving some of these markets are.

there are many innovators try to make their way to the global banking. various products. many of them may be offered by phone. it may be other mechanisms as well. we are trying to stay close to that. some of it is happening more quickly, some was quickly. it's very difficult to predict how that is going to evolve. you can look around the world and see that it is arriving in various ways. other countries likely will arrive here as well. and it poses challenges to regulatory system that is built on a more physical motion of we have banks of phones. the fcc does phones. so forth and so on. something that we are trying to be aware of, stay on top of command recognize that we need to work with other regulators of prayer going to be effective and probably need help from congress addressing. >> the chair now recognizes that children from texas.

>> thank you, mr. chairman, director, thank you for coming. several high profile data breaches at major u.s. retailers including the most recent breach a target as raised americans' anxiety levels about the security of their personal financial information. most americans would be surprised to learn that one of the largest repositories of financial data in the country is maintained not by a retailer or frays substitution by the cftc. the bureau is tracking, as my colleague from the jersey mentioned, 991 million credit card accounts, at least a half-million individual credit reports. in no as many as two and 27 million mortgages. we noticed the bureau is already experiencing breaches. the consumer complaint portal. the government less than stellar track record in this area suggest that there may be many more to come. my question to you, can you

personally guaranteed that consumer personal financial information is 100 percent secure? >> so first of all, there are a lot of comparisons made, some very casually in relation to us in the stimulus bill which we have nothing to do with, the nsa which we have nothing to do with, health care which we have nothing to do with. we do have to do it is the worker during a behalf of consumers. the issue you raise is an important one and one that i take seriously, just as you take it seriously. it would be benefited not taken seriously. what i can say is we attempt to safeguard any information we have about the american public into a -- where ever possible we're trying to gather aggregated information. i don't really care all want to know anything about your personal spending habits. all that does is get in my way because there are provisions in the federal law for that kind of personal information and how carefully you have to safeguard it. where we do get that information

, consumer response function where people have to give us details in order to have the complete handled, we are both comply with all the security and privacy provisions and a pretty extensive and federal law, trying to do that carefully. people looking in this to see how we're doing that. it is something that i personally am very mindful of. we will do our absolute best not to have a problem in this area because i recognize that would hurt this agency, our mission, and not be what you will be what >> you're collecting a lot of data. the want to quote the president. recently said all of us understand that the standards for government surveillance must be higher given the unique power of the state.

>> you know, as at face value. the question of want to follow up, something mr. garrett mentioned, can this data be reverse engineered? >> first of all, again, you're giving me quotes about the nsa which is not us and not what we're doing. >> i think you and the nsa air in a contest of who can collect the most information. the jury is still out. >> that categorization. however, in terms of what we are doing, we are making every effort to be very careful bulletin satisfying the federal law in terms of security and privacy and in terms of treating consumers properly. if we are careless with their permission, that is not consistent with our mission, and we're not. the question is, can this data be reverse engineered?

>> the issue of whether data can be reverse engineered is a complicated one. as we try to areas much as the canada high-level. there may be information gathering that the government has done across many sectors a one time that cannot be reverse engineered, but may become more capable of having that happen. that is something we are very careful about and mindful of in thinking about. my point is, that is not an issue that you can answer is no one time for all time. it's something that may change over time. >> the fact that you are concerned about it, does that mean that you think you can be reverse engineered? >> we're concerned about making sure that could not happen as much as possible. no one at the bureau is reverse engineering anything. no one has the title or interest. it would only cause trouble. however, we're trying to be mindful as we gather information , making sure it would not be subject to reverse engineering by us or anyone

because of the death kind of headache. >> to one of the things that -- there was some concern because it one of your contracts you say that they agree not to attempt or directly or indirectly or reverse engineer. that capability censor you would not have that in your contract. >> the time of the gentleman -- >> we try to make sure that does not happen then it is a terminal contract. all the contractors to us. >> the chair now recognizes the gentleman from missouri for five minutes. >> thank you, mr. chairman. thank you, director, for your testimony this morning. the ranking member, several members of the majority of expressed interest in working with this the fbi be to solve challenges like making sure that manufactured housing remains a viable alternative for the many families that benefit from this important product. as you know, many times will we

attempt to address, these types of issues, we have intentionally create loopholes and undermine consumer protection instead of fixing the problem. can you commit to working with us to address the concern of the manufactured housing industry will continue to protect our constituents from the actual bad actors that the rules are meant to target? >> i do commit to that. believe i have committed to it today already, but commit to a note. been open and accessible to representatives from both the building in lending industry. they have made a strong case for why this fits a particular need in the population and it's a case that i am familiar with from my own personal experience. where i grew up to my family, particularly eastern ohio. so yes, we are very interested in those issues. >> thank you for the response could be in the area of more visuals to was steps has the siepi be taken to educate and

help and help lenders as well as consumers understand your new rules? >> i am actually really proud of the work we have done in that area because will we finalize our rules last january we give these lee said it would have been a classic response to industry to well, we are done and that's your problem of removing and other things. instead we dug in and made it clear that we had all project to run regulatory implementation. we wanted to hear what kind of practical problems they might be running into the we had never seen in they had never seen because they told us everything that they had problems with before we finalize the rules when there have been a number of things, including the small creditors have talked about with the representative in the special provision we made that covers thousands of community banks and credit unions. that was in addition to the original rule and was meant to address concerns we heard that we absolutely found to be valid and legitimate. we did the examination protocols

were done six months in advance so people could be used to that see that. we continue to work with industry. by the fall of the year they say we appreciate you have been so helpful. please stop being so helpful until january 10th because we need to finalize. we have been taking further comments and issues and will address some of that this year as well. again, there will be new circumstances that will not quite anticipate. you will listen to them and see what they have to tell us and see what the data shows but actual impact on the market. we do not want to upset the housing mortgage market. >> do we have any data yet on any decline or issuance of mortgages? >> it is so soon that it is hard to say anything. this took effect january 10th. will say very sketchy fashion, i did see that mortgage lending was up for each of the first two weeks of our rule, but that is such a small slice that it is very hard to make anything up over the week before we finalize

our rule. >> the key for that response. in the area of service members, dodd-frank created the office of service members affairs to address the specific challenges faced by service members, veterans commander families. this office which monitors complaints will consumer response received approximately 3800 complaints between july 1 of 2012 and june 30th 2013. what are some of the most common grievances expressed by service members and what has the bureau done or can it do to address the concerns? >> congressman, i am lucky. one of the best people that we have at the bureau, patraeus runs that office and has a tremendous credibility across the country with service members, their families, veterans. we head it and children from

massachusetts tell us about his suddenly dove was treated unfairly on and on the lending program. we hooked into it, found a lot of complaints and the dress that through enforcement action. we have addressed a lot of individual complaints, problems like permanent changes, station orders was enough qualified people for the kind of adjustments that other people were getting a mortgage market. the department of defense and veterans affairs, to their great credit, have been very responsive to the problems that we identified. they gasol the lot of problems. it's a great partnership that we have. >> thank you for your efforts. i yield back. >> the chair now recognizes the june from march carolina. the chair of our oversight investigation. >> director, to follow the chairman's opening line of questions about your building renovation, would you provide

the committee with the occupancy agreement kinnock. >> i don't know that there would be any reason why we could not provide that. we will be surprised if we have not. i don't know offhand. >> you haven't. >> if you would that will be helpful for us to understand. >> that was an agreement signed before i became director. >> even easier. >> even easier. a 20 year contract to you disclosed in your report. no, the reason why we as this is because you spend $12 million a year in rent, you disclosed that to really appreciate the fact you disclose that. we also know from the treasury audit that the value of the building the you are occupying his 153 million. as of 2011. yeah you are spending -- first refund of 55 million based on

your disclosures. then 95, than 150. so it looks very odd to us which is love would like to know the details of this. do you think that's reasonable? >> i do. >> they keep. so he said today that you will actually have to move out of this building the you releasing. you're going to have testified temporary space. >> is a very annoying problem for us and does not make anybody happy. >> but you think about the cost of it. it seems a little insane. spending $12 million in rent. and you're not even going to be in the. >> there is much that i am unhappy with about the situation. it is a building that is deteriorated. is going to cost of fair amount of money. >> all? >> it is not that old. it has been used pretty heavily.

>> kenny laid the cornerstone of this little building. heavily used. >> if i were a consumer would be complaining a lot. >> provide us with the details of the temporary arrangement for space and what it will cost. >> as you have seen, our budget in spending has become more and more transparent as we build up this agency. all that is available on a website. let me follow-up on that. i wrote you a letter beginning of the month. appreciate your responding in a timely manner. he provided back -- in my question -- and understand that might letter request was about the details of your budget. you responded back with some links onion website. i appreciate that. one was a newly issued report in your finances for the year. what i asked was the resource detail and operating levels

detail within your budget. no, the report -- you sent me a link. i went to it, looked at it. and the level of detail their is fairly nonspecific. i will give you an example. i am asking for is a line item structure. and you have $166 million line item that has three lines of description in order to add up to 166 million. and it has a great name, prevent financial harm to consumers will promoting good practices that benefit them. i don't know that we oppose that idea. we would just like to know what that is. no, your bureau has also done something that i think is proper you disclose contracts. we're able to ask you about contracts. so i know that he's been to a half-million dollars to pay for webb dance to drive traffic to website. i know that.

and i know who you contracted with. no, i also know whether it is in no bid contract, but contract. they appreciate that. >> we have done it, an emphasis on competition. >> and they appreciate that. they'll see that no bid contracts. no, as a policymaker you are also spending a substantial amount on salaries and benefits. disclose that. but not on the detail level in your budget estimates. yet to utter and 38 people working on one area. we don't know anything more than that. what is going to happen to you is you will, for congress. we have a lot of questions about your contracts. even if you have enormous amounts of this spending to the tune of three, $400 million a year, and we don't know the details. what i ask you to submit to us is that budget line-item that other agencies have to go

through the appropriation process submit on a regular basis. would you submit that our committee? >> what i would say is as i said, the extended detail of our budget is growing greater as we have been -- the ability to do that. it is my and extending the the amount of information we provide about our budget is comparable to that of other agencies, and we are now providing it on our website of a quarterly basis which other agencies to not do. if you have other views about how much detail we should be providing -- >> the time has expired. the chair recognizes the july from georgia for five minutes. >> the queue, mr. chairman. over here. how are you? i want to ask you about the bureau's march 2013 landing guidance for automobile dealers. this is important to me. i represent a district that represents the sixth largest counties of road that led to which means the suburbs, which

means transportation which means, but dealers and auto consumers. no, i am concerned about this because i along with 12 of the members of this committee will you a letter expressing their concerns in may 28 asking you to respond but have not gotten a response as of yet. this is very, very critical. number one, there was no study. on the impact of flat fees for consumers or al it would affect consumers and the availability of them getting credit. this is serious. i am very concerned about the bureau's actions because they have had the unintended consequences of raising credit cards for consumers, pushing the marginally creditworthy out of the market entirely.

and if, for example, if you learn as many of us here in congress of learned that the broad adoption of dealer compensation methods that do not permit consumers to negotiate lower prices would hurt marginally creditworthy consumers, including many minorities of which you are ever really trying to make sure have fairness. but if you knew this, with the bureau review this guidance that it is used to finance the sources that you issued last march? >> i am trying to follow all of what you described. first of all, the bulletin that we put out -- first of all, believe we have respondents. to get to the bottom of that and

make sure we're on the same page. i would be surprised if we let seven or eight months go by. >> i will check with my staff. i understand. that is not the point here. i just mentioned that so that you can see the urgency of moving forward. we need to treat both are on the dealers and their consumers with fairness. the march 203rd guidance is not fair. no, let me say a couple of things about that. the problem we are trying to address is one the people walking to get a loan to buy a car which as you say is a critical thing in suburban and rural areas in order to get around. we find that they are treated differently, they get different -- the required to pay different amounts, higher amounts based solely on the color of their skin or their ethnic background. that is not right. that is what we're trying to address. terms of how we're trying to address it, it becomes a more

complicated issue. the bulls and we put that last march, there was nothing unfair about it. it was restating law that has been on the books and followed by all other agencies including the part of justice for almost 20 years. we as a new agency laid out the we also felt we ever going to take the same approach. the auto industry, a lot of concern about this. the auto lending industry is doing just fine. in fact it had a better year in 2013 and i suspect we will in 2014. the notion that we are destroying lending or killing of the ability of people to compete in this market, we are not. we will continue to work with people to address concerns. you so we add an enforcement action that to bear fruit against allied for $90 million. >> please. my time is running up. here is the point. and that what you to do a great job, but if the people -- if what you're doing is not grape

within the auto industry and the consumers between the people who are buying the cars and are not, and if they have been put which, in fact, they did not commit considering a controversial this guidance was and has become, wouldn't it have been more prudent for you to receive input from the which she didn't to hear concerns from them, to hear their concerns directly for directly impacted by this guidance before, before it was issued. this could have been avoided. >> the guidance itself is exactly a restatement of existing law. that's all it is. >> making more. they're wrong. we did have and have had lots of discussions with lenders over whom we have jurisdiction. we are careful about not trying to reach out to dealers over who

we don't have jurisdiction and respecting the line that covers troop. >> allow me to say this. my time is up. this is one congressman who represents probably per capita in my area because i represent the suburbs where the action is, where they have got to get fair treatment. if you could work with my office more closely to make sure my dealers in consumers are treated more fairly. >> the time for the gillette has expired. the chair recognizes the gym and from new mexico, mr. pierce. >> they key, mr. chairman, i think you, director, for being here. just a follow up on his questions, a federal judge ruled that data collection was unconstitutional by the nsa. my question is, will you submit a request with a federal judge to look at your collection and see if this constitutional? would you do that? >> we will follow our statute. >> that was not my question. >> i will say --

>> my time. >> the bureau was raised in federal district court in california. >> if i could reclaim my time. >> time village to vigilant for mexico. >> i know that mr. snowden was not a planned asset of the agency. none of the fbi arrested not planned for things to be released, but i will say that the collection of data has tremendous value in political campaigns in the worry that there might just be someone down the system who might release that information. you're saying you're not going to ask the judge if it is constitutional. i found your testimony almost amusing or you describe many of your friends live in manufactured housing. that smacks of a condescension that was rejected two generations ago. i wonder if you talk to any people who do with manufactured housing.

on january 203rd, i just got this e-mail from a friend of mine unsolicited. in not telling both looking for permission. i just return for an educational some of explains how we have to conduct business as manufactured on retailers now that the new laws are in effect. i honestly can't believe what i have to do is sell homes in a difficult it will be not to trip up. just takes the wind out of my sales. and all others that are in my industry. it just keeps getting more and more difficult to operate a business and more and more easy to get sued for not dotting geyser crossing the t's. that is the legacy that lives in the manufactured housing industry the you have given lip service to today and for the last year. but i will tell you that i found amusing your indignation that the one-size-fits-all characterization before you even came here was so offensive. and yet you're doing the same thing today.

you're declaring today that many times the mobile home, the manufactured housing, that the regular house can be built there. no, my county is from one end to the other, 50 percent of the homes are manufactured. and to declare that one lot is monsoonal for regular hose but is suitable for those that many of your friends live in i found to be journalistic thinking, one-size-fits-all thinking. you characterize that even your initial rules were coming because he feared the ability to repay. no, i wonder how many banks who lent to manufacture homebuyers the you actually talk to because they tell me that they have the highest rate of repayment of any form of fall. if you still have one-size-fits-all in the balloon payments which then kicks us out -- kick cylinder out of the qualified mortgage market.

without secondary command when you do that in new mexico we have 70 days of capital to land for housing in the entire state, and when you kick them out of the secondary mortgage market you then say they you have to lend that money for that piece of property. would it pays out 30 years from now you can live for a new house. going to chop them, the rural, small areas that don't fit your definition of what is really right for people to live in. in the eddy the balloon mortgages aren't somehow correct none of your people from wall street are going to come to mexico and lend on a trailer us and give them a 30 year note because they can deteriorate or be held in good condition for 50 years. i find your indignation that we might have said or might even be saying still a one-size-fits-all is now working.

it is a war on the poor that is being conducted by you in this administration, and it is one with a low incomes suffer the most. they don't have other options. i find your testimony today to the diminishing of. i wish she would change the rules instead of coming here and giving lip service. i yield back. >> mr. chairman, point of personal privilege as a witness. the five minute filibuster that resulted in no questions some of the most offensive questions and comments i have heard. >> the committee will come to order. it is that gilman from new mexico. the chair will yield in a brief moment. >> the completely unfounded suggestion that we are using data for political campaigns, the you have not a shred of evidence for, this is an independent agency.

>> that is what you said. and the notion of is condescending and talking of a manufactured housing because as a fact they have friends and family members who have lived and lived in many factions housing. endo begin to understand where you're coming from london. >> reasonable discussion. >> the chair now recognizes the gentle lady from the york for five minutes. >> that think the chair for yielding and mr. cordray for your hard work and would like to yield him as much time as you would like to respond to the lion of disrespect for questioning. >> the notion that we're being condescending in trying to take account of these issues and recommend as a their different kinds of properties that have different needs in rural, suburban, and urban areas, and that is somehow or amusing to you, it's amusing to me.

are trying to take this seriously. that is the mandate of this bureau, and we will do it as best we can. the notion that we are somehow going to take information and use it for political campaigns is deeply offensive. have not a shred of evidence on which your basin that. it is not befitting of this committee. >> mr. cordray, as you and my colleagues know, we created this siepi be to protect consumers. we saw that consumers are often not thought about that all or an afterthought. it is highly appropriate to have one agency whose prime focus is to make sure that it -- abusive practices and unfair deceptive practices are not on the market. i believe your record speaks for itself in really coming forward with a well thought about research position that help the economic security of our country by being fair to people and giving notice to people about

the products that their purchasing. bella would also like to ask specifically an area that you're working of. the whole lot of potential but are not subject to uniform federal protections are disclosure standards. that makes it difficult for consumers to be able to do comparison shopping and look for dissing lee, with. that two basic questions in this area. when does the bureau planned to release its pre plan -- prepaid card proposal and secondly based on your research into this market how should we as policymakers think about prepaid card policies. should we focus primarily unclear consistent disclosure? today to be placed on prepaid

cards? increasingly important for many low and moderate-income consumers. it may become increasingly some sort of alternative mechanism to a bank account or check cashing or other things that can be very costly at times for low or moderate income individuals. the stage at which the prepaid card issue is at the bureau is at the proposed rule stage which means that we are on the verge of undertaking to write rules governing prepaid cards which as you go in and know for your attention to this is right know of all of the fabric of consumer protection, just as remittances had no consumer protection. most people don't realize that : a credit card, debit card, prepaid card. think they think they have the

same protections. not true. we will be writing rules to take account of the importance of providing protections in that area. what i would say is your asking about the balance between the simply procedure improving disclosures, some substance to be provided by a general impression is we need better disclosures and better substance and the rules. i don't want to prejudge the rulemaking process. we will be putting a proposal for, and finalizing. but action is very much needed. it is an emerging market debt is now well over $100 billion being loaded on to these cards every year. people the protections and a balanced way. we will welcome the input of members of this committee as well as consumers and industry and getting those rules right. >> where do we stand up and your role on overdraft protection is? i understand you were reviewing that. overdraft would not be part of a

prepaid card. but the overdraft protection world commodities to and the working of that area? >> the unified agenda which republish on our website response to suggestions made about a year ago the committee a couple of years ago know, that is at the pre greuel stage, not as far along as prepaid cards and something that we are looking at and trying to figure out, doing analysis right now to try to understand, there are many ways in which overdraft products is good for consumers, helps them avoid nsf fees and other things. there are some practices that concern us in that area. so we are moving forward in trying to figure out how to approach those issues, but it is not as far along as prepaid cards. >> what time has expired. >> the chair now recognizes the gentleman from california. the chairman of the house foreign affairs committee. >> thank you very much. director, thank you.

i wanted to raise some concerns. maybe in the process lower the blood pressure a little bit of the question of the bureau's national mortgage database project with the fhf fe. i think you understand that the on this room there are others who have concerns with the privacy issue. at the end of the day he put together the data this like that. it is going to include credit information on 50 million people here in the united states. that is just the project. no, in your opinion this information, the data collected does not include personally identify with permission. >> that's my understanding. >> yeah. the real question here is is is searchable, can it be reverse engineered.

i assume, you know, that you don't believe that you can now identify a single individual through that process. but if we look at the actual risk that consumers have, we saw the recent target breach which in theory should not -- could not happen. resell what happened with michaels. even with the best of intentions , even with high security code it in these cases yet companies with reputations rest on the line. they've done everything that they could do to make sure that a breach of personal information did not happen. and it happened. but now we're talking about the federal government. and breaches of information that the federal government level according to the gao in 2012 there were 202008 and bridges. some of that is small in terms

of breaches of personally and in a viable information, was among the more very large. it was a 42% increase from the year before, over 100% increase from the year before that. would like to play a short video clips from a presentation given last year by bob every, the fhf a project director for the national mortgage database soft. let's go to that if we can, mr. chairman. >> we have the date the mortgage is taken up, the size, and the census tracker. 95 percent of us a unique. you can go look it up. fairfax county, really easy to find people. begin nudging into our database. >> i think there is a little more. >> at present, any federal

employee to gain access. many of you in this room are not federal employees, and then the short. only federal employees collected data. that is probably not enough. >> so mr. avery states, in fact, the information included in the database is, in his words come easily reverse engineered. and even more troubling, it will be available to any federal employee in the country and possibly others. no, this is why from the perspective of privacy advocacy there is this concern about consumer privacy and this case. personally, i don't believe that the project should move forward until these issues are adequately addressed. so i guess my question is, from your standpoint, you are weighing eosin benefits of the database.

see you -- do you believe that that al ways the real privacy concerns here? >> ultimately a judgment and the balance. i would say two things in regards to your line of questioning. the first is in fact the homeowner market is well aware there is a tremendous amount of the permission freely available to the public. of know how they do things in california, but it will hire of a home that i own is on our county auditor's website, the picture, the valuation, the ameritech said pay. and determine whether more is there was the amount of mortgage diode. all the information was public. and a law school class the tell me back in 1990 how much information there is. i was now sure i understood. they brought in the newhall about all of my home of the transactions. it's available on the internet. that was true 20 years ago. nonetheless, it does not lessen the privacy concerns. let's get the paradox here.

and getting questions from you and your colleagues, in your case so far your colleagues about what we should be doing in the mortgage market. have we drawn into a tightly the box around qm. is manufactured housing being unfairly affected or undermined here? in order to make judgments about that, in order to respond to you and get this right in for you to get it right at us to get it right we have to add information about the market. what we felt with the mortgage data base was we did not always have the kind of information we would like to have. this well as provide it. then we will be able to have confidence as to whether we are getting this right or should adjusted which is what your colleagues are crying for. it depends on information. >> and puerto we have 20,000 riches. i would like to submit something else with a record. a recent letter from the national association of credit unions to else and data security and protection affected. >> without objection. >> the chair now recognizes the gentleman from texas for five

minutes. >> thank you. at thank you again for coming before us today. i look forward to your -- i am up here. i relocated temporarily. i am appreciative of the fact you're willing to stand up with consumers'. and when i say stand-up, i mean you take a firm position. the you really believe in what you do. it comes through. that is important to consumers. i want to visit with you about the $3 billion in refunds. $3 billion. that's a lot of money impacting almost 10 million consumers. can you give just a brief overview of this $3 billion that the consumers at an opportunity to receive?

>> thank you, congressman. this is essentially basic law enforcement work. on both sides of the aisle. people should have to comply with the law. if they violate the law they should be held accountable. if they violate the law in a way that hurts people, are stable financially, those people should have our right, if possible, to get their money back which is something we're trying to do. we have been engaged in addressing violations of law with credit-card add-on products which has been a big source of redress for consumers, hundreds of millions of dollars going back into people's pockets who were victims of fraudulent, deceptive, misleading marketing of products.

>> that's part of why we feel so strongly about having the information on which to pace this. but -- base this. but we'll continue to do that work, we'll continue to be, i think, appropriately aggressive. not unreasonable, but where people are violating the law, it's our job to make sure they're held accountable. >> you've received 122,000 complaints between july 1st of 2012 and june 30th of 2013, over half of which there about relate to mortgages. 3,80