garland is not going to be confirmed and we will get our nominee. i wouldn't have done it that way. i think the senate does have a responsibility to advise and consent, have some hearings. you might not have moved them but at least some kind of hearing. maybe payback will come into play. i've got demarcation, let's stop this. democrats and republicans. you want to stop it now because you all got the president to stay in the congress. i'm talking about the institution. one of the most important things the united states senator should do that presidents can't do and the house doesn't even participate in or vote on is advise and consent on federal judicial appointments, particularly the supreme court. that is a sacred thing and i don't think they're doing a very good job with it for a number of years. >> we have time for one question that takes less than a minute, you are. >> we see that a vote for trump was a repudiation of washington.

how do we explain that they reelected nearly every member of congress? >> that's a great question i'm going to go ahead and take that. >> i think in part it was probably, there is this sense that the people still feel some personal identification with their member of congress. they hate their congress but they love their congressperson and it's because of these members who are spending over half their time at home now and they are all over and they developed these relationships that transcend.it's not you, it's them that i'm upset with so i think that phenomenon still plays out. they didn't know donald trump or hillary clinton or if they did, they probably weren't enamored with one or the other but they know their own member of congress and that transcends the often times, not always but oftentimes transcends the people view about the way washington is working . >> i think i agree with that. that's true.

i do think that was a big factor with trump, that he represented real change. you know what michael moore said that this would be the biggest go to that could pop possibly happen that people elected trump but also, i think the house and senate candidates were pretty smart if you go back and look at it. some of them came out for trump, i'm going to be on his team. some of them tried to just give the slip. some of them said i'm not going to vote for him so they kind of got their message in the congressional district or senate races based on the factors in that state. i think that with the house and senate deserve a lot of credit. i'm a huge fan of paul ryan. i think hehandled it pretty well . i hope that he and the president-elect can get together and go on him but he didn't just jump on the bandwagon.

he did what he is supposed to do. the house first . that's his constituency beyond his district in washington. i think he had a lot to do with president-elect trump carrying wisconsin. i think the president owes him a debt of gratitude. who would have believed trump was going to carry wisconsin? not me, it was a surprise. >> speaking of paul ryan and donald trump, their lunch is wrapping up just about now so we should wrap this up as well. i think these two distinguished gentleman and it was wonderful, thank you. >> . [applause] [inaudible conversation] >>. [inaudible conversation]

>>. [inaudible conversation] >>. [inaudible conversation]

>>. [inaudible conversation] >>. [inaudible conversation] this all day conference wrapping

up with cq roll call and watch the panels we covered earlier online, that will be in c-span's the library. discussion of what to expect of donald trump who visited capitol hill this afternoon with to meet with congressional leaders including senate majority leader mitch mcconnell area congressional producer tweeted the remark from the president-elect who said really beautiful. aftertouring the area where he will be inaugurated on january 20, the us capital , trump speaker paul ryan also met with the president-elect did they want on the main rotunda on the capital on their way to the house side and then ryan introduced the president-elect to the speaker's office to show him the area where the inauguration will take place on friday, january 20. congress returns for a lame-duck session next week. federal funding for 2018 on the agenda, current funding

runs out in december. live coverage of the lame-duck session on c-span and here on c-span2. early today on washington journal, we take a closer look at congress as republicans retain control and with the new president in the white house. >>. >> host: bob cusack is the editor of the hill for the first time in 10 years, there is a republican in the white house. smaller numbers for both the house and senate but who has the advantage? i asked the caller about this and in the early stages, who had the upper hand? >> guest: certainly republicans have this surprising amount of power. on election night a lot of republicans were bracing for big losses. evidently in the white house, probably the senate and a number of house seats and they did lose house seats, in the range of nine or 10, still close races but the senate obviously stays in republican hands. as we move forward, next year could be a big policymaking here because republicans have all three. they don't have 50 votes in the senate but through this

budgetreconciliation process, they can move some things with just a majority of republican senators voting for it . >> speaker ryan, he said that campaign with money for those members and he got resistance from donald trump yesterday with a different look at paul ryan, tried to bridge that divide and donald trump said to meet with the house speaker today.how do they bridge that i, how big a divide is it first of all. >> it's less high than it was before the election. >> guest: before the election, donald trump and mitch mcconnell, there was never any photo. there was never any joint press conference. this is highly unusual and it was because of controversial things donald trump said and

ryan and mcconnell didn't know how to handle it. distance ourselves from trump, it was an awkward position for ryan and mcconnell to be in. it ended up with a good ending for the gop so now, remember before the election, donald trump had to get paul ryan in a different position after the election as speaker. because he was upset at ryan and they been feuding. i think that now that donald trump has a historic win, i think they're going to bury. i don't think anyone else can get the 218 votes to become speaker other than paul ryan. the company has to mend fences with one another so ryan did talk to trump and i do think they're going to bury the hatchet. and ryan will in all likelihood be the speaker in congress. >> we've been asking priorities for the trump presidency as it comes into the first meeting today with donald trump and president obama and certainly even since his last days, donald trump has been talking about investing in infrastructure spending, etc. back to the 2009 infrastructure bill, 830 billion was approved but republicans spent a great deal of time both then and

afterwards criticizing the effectiveness, the amount of money that was spent. it's likely that certainly a big chunk of money is going to be spent on infrastructure, out of donald trump condensed on spending that money? >> it's interesting because no matter one on election night, hillary clinton or donald trump, have both targeted infrastructure as a big part of their agenda so this will be part of trump's hundred days. nancy pelosi, minority leader has suggested she's ready to deal on transportation. it depends on how they do it . there could be tax provisions in there, those are always controversial so i do think that before the stimulus in 2009 was mentioned, transportation was a bipartisan issue. republicans and democrats basically agreed and were able to reauthorize the highway bill without putting it down the road. after the stimulus, it really poisoned the well. i think that has changed,

however there's no doubt about it. the freedom caucus and the conservative movement are not going to want some big, as they would say bloated transportation bill moving through congress so i do think there's enough republicans and enough democrats to get some things done in the first hundred days's p1 bob cusack is our guest fromthe hill, we look forward to your comments . republicans, 2027 48,000 and independence, 207-488-4000, send it to c-span wj if you'd like to. let's look ahead to next week. it seems like the election of donald trump a lot less drama than the lame-duck. >> this lame-duck is not going to be a lot of business getting done. the first order of business and the biggest priority is funding the government. they must do that by december 9 and talk about maybe doing some mini appropriation packages called minibuses area it's going to be very difficult to do.

obviously conservatives want a lot done now. they want to have more power next year so expect them to be pushing for his agenda which includes the tpp. that is highly unlikely to move in the lame-duck and obviously something both hillary clinton and donald trump oppose it vigorously so it's going to be tough. almost impossible to get that done in the lame-duck. >> house returning on monday, live coverage on c-span course, next coming in tuesday. let's go to our independent line 1st and hear from linda from connecticut. good morning. >> caller: thanks for taking my call. congratulations president-elect donald trump. there's a couple of things president-elect donald trump promised in the debates that i want to see if he can do. one is childcare.

childcare in new england is prohibitively expensive . and that is so important that we get childcare and another one is carried interest tax reform and that's something that could help pay for child care. now, if he can get some form of carried interest tax reform, i think it will be a tremendous boon but he made his bones as a builder . if he can stick to building america alone, i'd be pleased with that . >> host: childcare and tax reform. >> guest: taxes something that was more on hillary clinton and nancy pelosi's radar than donald trump. they talked about it a lot, clinton and pelosi. that's not going to be the top of the donald trump

agenda, at least right now. as far as carried interest, he has actually, donald trump and democrats will criticize republicans for the healthcare industry, donald trump has said he's going to go after wall street. he's also got his drug companies for drug prices and gone after the hmo industry so on tax reform, carrying interest, he is actually for that. that is something that he and some republicans on capitol hill disagree on and that's something the democrats are going to be, i think homing in on. i think the chances of the tax reform bill which is difficult, the last one in the country was done in 1986 , have gone up the cause that the top priority for president obama but it is a top priority for donald trump and in fact the system is unfair but it's so hard to get it done i'm not sure he will be able to get it done but there will be a lot of talk of its. >> headlines say this may be

a powerful vice president as trump's liaison to congress. he met mentioned by mitch mcconnell in his briefing, what do yousee as the role of former congressman now governor , now vice president elect? >> guest: one of the best things donald trump did through the campaign, i think number one was picking mike pence. mike pence vocalized the conservative movement, he is fiscal and he is a social conservative and the base loves mike pence. mike pence served in the house for a number of years and he took on president bush on medicare and drug legislation. he was the tea party before the tea party. he has great relationships with paul ryan and mitch mcconnell. is going to play a huge role in getting the details, donald is not a big detailed guy. he can be a big detailguy on capitol hill. it's all about relationships and mike pence has great

relationships not only with republicans but mike pence is very media savvy . >> host: on those details, vice president elect trump short on a lot of details for his programs but we will begin to get a sense of those as the budget is developed for the next year. when is that process starting for potential trump employees, trump appointees i should say quite now the transition is number one. have to decide who's going to fill these key positions, there's already chatter about who's going to fill the cabinet and after he does that and after they tried to quickly, they nominate people and try to get them approved in january, then you've got to come up with the budget and that'sgoing to have , that budget is the most mostly scrutinized document in basically since the last president's first year. that's going to be big. people are going to look at, what are the details? he plans to build a wall on the southern border around there, you have to have costs in there and he said mexico

was going to pay for it. so there's a lot of work to be done between now and the inauguration. >> host: here's richmond virginia on our republican line . >> caller: good morning. the first thing, i've a black republican as as i've said many times i'm a black man in america and what donald trump has really done is more than any white candidate that i've ever seen done. he's actually doing something for the inner cities and for black people but he's saying something that i want to hear. in two years we have a midterm election. i'm satisfied with donald trump. to review, we have a midterm election. in four years, most republicans are lining up for 2020. donald trump will be the incumbent and then those republicans that had an idea about 2020 might as well forget about it. the second thing i like to talk about is what people

keep saying about who black people vote for and who do black people like and you've got all these people on television, black individuals same black people won't do this. black people want the same thing donald trump is talking about. it reminds me of the 1960s and i'm very sad to say this. i'm not a muslim but i'm a christian and my religion starts in matthew with jesus christ, let's get that straight at first. but that said something that really reverberated with me. ask who are the leaders in the black community, malcolm x said we are tired of singers and dancers and clowns and people like that that consider themselves as the leaders of black people. when you really look at it, i think about who is one of the

best black people, it was phil jackson, he led an all basketball team to a championship. that's my comments because i'm so tired of black individuals running around. >> host: thank you. >> guest: he mentioned phil jackson, he's done very well with the next. donald trump did not do well with minority voters, however early data suggests, remember, like everyone was wrong. nobody thought donald trump would run but the early data suggest that yes, hillary clinton won the black vote overwhelmingly but african americans did not come out as much, nearly even close to when barack obama was elected in 2008, 2012 and if you look at it, mitt romney and john mccain got more votes than

donald trump did what hillary clinton did not have the turnout be expected . and that's going to be i think a challenge for donald trump is uniting the country because a lot of minorities did not vote for. he's going to have to worry about that in two years in the midterm and of course in four years. when george w. bush and barack obama got elected, he worked very hard behind the scenes to avoid a primary challenge and that's what the trump team is going to have to do in 2020, not necessarily to beat donald trump but to weaken him. both bush and obama avoided a primary challenge , unlike the one that was one . >> host: bob cusack of the hill, we welcome your calls and comments. trump and ryan signals a new chapter in relationships. reporting on the news conference yesterday, ellen in gainesville by the house speaker. here's what some of what he is hoping for under the new president.

>> i think after a trump campaign where people believe so hard for one time or the other it's time to heal and unify. this healthcare law is not a popular law. to your specific question about repealing and replacing obamacare, this congress, this house majority, this senate majority has demonstrated improvements and we were able to pass that legislation and put it on the president's desk. president obama vetoed it. now we have president trump coming was asking us to do this so with unified republican government we can fix these problems. it's not just the healthcare law that we can replace because we now have the willingness and the ability to do it. there's so many things i'm excited about. think about the poll workers who see relief coming.

think about the farmers in wisconsin being harassed by the epa and waters of the usa. think about the ranchers who are getting harassed by the department for the laid-off workers. this is good for our country. t sethis means we can lift the oppressive weight of the regulatory state. we can restore the constitution. think about the conservative constitution respecting judges that will be nominated. this is very exciting. >> saying there is relief coming. >> guest: apparently obamacare is at the top of their agenda to repeal it and they can do that with a majority of votes in the senate so they just have to keep their guys in line and this is something that unites the republican party. if you look at obamacare, it's survived some major challenges. a 2012 election where romney bowed to her eradicated and now it is being targeted again and republicans appear to have a vote. have to replace it and replacing it is very difficult. they've not really been able to coalesce on one legislative proposal that has been scored by the congressional budget office so replacing it will be very

difficult. >> host: all the different things that donald trump said in the campaign on terms of his platform, what where do you think he will get the most pushback from a republican congress? >> guest: one of the things that has not been on the agenda from either candidate is cutting government spending and that is something big for the conservative movement, big on the agenda in 2010 and that's what happened in 2011 a lot really got as he said shellac, his party got shellacked in 2010. 2016, donald trump is not raise the retirement age for social security, these are things that republicans on capitol hill do believe in and note that medicare and definitely medicaid is headed for bankruptcy. we have to do something to those programs. cracks say they have the solution. the growth of government and the debt is something that conservatives want to really take it seriously and focus a lot more on . >> host:here's what warsaw new york, paula on the

independent line . >> caller: i'm still behind in my sleep because i stayed up all night tuesday and i really am so excited about this whole thing because in new york state, we had to stay up all night praying because we were fighting the electoral college for hillary clinton and i was praying and praying and now, i'm not as generous as donald trump and giuliani and all them. i think a lot of people in this country too, we are so disgusted with washington dc and donald said he was going to clean up the slack. for all of the republicans, i would start right there with ryan and with mitch mcconnell and with lindsey graham and john mccain and i would make

their lives so damn miserable they would quit their jobs and go home because they are not for america. they're not for anything except their paychecks. they are a total bunch of turncoats and i have no use for any of them. like i say, my vote originally was ben carson and i hope donald gives him a very important job in his cabinet. guilani, some of the ones that really stood by him because donald needs a lot of help what he's not getting any real help from all those hanger on, those worthless, they are even worse than the democrats. >> host: paula, we will let you go and hope you get some sleep. >> guest: i mentioned the popular vote. it's interesting that after the 2011 election which moore won the popular vote but george w. bush won the electoral college after the supreme court decision was final, many thought that

would be the end of the electoral college and she ended up winning the public popular vote. there's a phrase that nancy pelosi said in 2006 and it helped them win the house majority. donald trump is now saying famously with congressional term limits, something he's proposed, not popular inside the beltway. it's hard to get that done because congress is like that and a ban on lobbyists in his administration. i think ben carson is going to have a prominent role. he is a top adviser to donald trump. he will be in the cabinet, maybe secretary or somewhere along those lines as a doctor. as far as the anger at republicans, that's their view but if they're able to get stuff done, if ryan is working with trump on and expect that to happen, hewill it be able to get legislation passed and that net may help congressional approval ratings but democrats , their

biggest target obamacare, they will fight very hard the election donald trump put into the top place, particularly those opposed to john mccain, lindsey graham, >> guest: it put them in a difficult position and you think of 20/20, most of the pundits were thinking about 2020 republicans running and we were thinking of ben sachs, a governor from nebraska who was thinking about a 20/20 run but that's not going to happen now in all likelihood. >> host: here's hillsboro pennsylvania and gladys onthe republican line . >> caller: hello. >> host: good morning, go ahead. >> caller: i was just saying that i was so tickled when donald trump got elected and i know that if they give him enoughtime, he will get this country turned around . i would, i was just so happy. i didn't want hillary in

there. i know donald will get this country turned around if they give him enough time. >> host: we go to donnie who is in maryland on our democrats line. hi donnie . >> caller: good morning. thank you for taking my call. i recently became a us citizen after the election. from mypoint of view , i was an undocumented immigrant. i went through the process, it's really hard, it's really difficult. i did not come to america to a country to be one of the rapists and murderers. they look at us in a different way. now i worked in my family and i'm proud where i am right now and i think it's difficult and i would like them to not judge us by our

color or how we look. to prove that we can be a great asset to this nation and that we would like to contribute to everything. and i'm so blessed and i know that now i feel equal as everybody else. >> host: thank you for joining the conversation donnie the five there is a lot of fear out there based on donald trump's policies and what he said about deportations. republicans know they are for legal immigration and they also when there are violations of the law that actually hurt the people who have jobs through the process which is very rigorous and that is something that i think in his budget people are going to be looking at. he said different things about whether there would be mass deportations and then walk it back, also a ban on muslims and they changed that only certain countries as far as coming to america so these

are details that are very important and also i think are going to reveal what a trump administration will do's in terms of immigration, he could undo some of the executive orders that president obama has issued. the dependent children order for example. >> guest: that's what he's promised to do. he had a long list of what he would do on day one. that is something that he would rescind a lot of these executive orders and i think on those type of comments, he's going to have to deliver because people, trump supporters give him some leeway. they givehim access to the possibility of maybe not gridlock in this town because they give him the leeway and they know he's a dealmaker . he just abandoned most of his promises. >> host: he comes into office with the supreme court still at eight justices and has a chance to send the nominee to the supreme court. i want to play you the comments of mitch mcconnell on what he's thinking and get your sense of his briefing yesterday when i think we all agree this is a stunning

election and clearly an indication the american people wouldlike to try something new . i know the speaker shares my view that we would like to see the country go in a different direction and to work with him to change courses, to change the course for america. he will have an opportunity to fill a supremecourt vacancy. as you know, i said in february of this year , to hell with controversy. that i thought it best that the american people decide who made this appointment to the supreme court. i thought i was on pretty firm footing in doing that, it's been 80 years since the vacancy was in an election year was confirmed by the senate, you have to go back to 1888 to find the last vacancy on the supreme court in an election year, it was confirmed by senate by the opposite party. so the american people have

spoken and president trump is the nominee. >> host: what our democrats options in the senate? the republican president now appointing his appointee to the court in the coming months? >> guest: what the base really liked, a lot of things the base didn't like about donald trump but when he put out his list of possible nominees, they love it. they love the list, they thought it was great. he's going to pick someone on that list and republicans on capitol hill are in all likelihood went to support that. if it's a very controversial pick, democrats can filibuster the supreme court nominee. the nuclear option the democrats have does not apply to the supreme court nominee so the republicans if they change the rule are going to need 50 votes and they've been able to move prior

justices whether it's alito or roberts and basically put the democratic party opposing them and supporting bushes nominee so i think that that's always a heavy lift to get your supreme court nominee but that's something that's likely going to happen . >> host: we hear from jensen beach florida, david on the republican line. >> caller: that morning america. how about that trump? man, awesome. i love it. i've been saying for years, the only way this company is going to turnaround as if the billionaire comes in there that has no ties to special interest . that's what he's going to do. everybody in the media, everybody was wrong about this guy from day one. clinton, these backseat drivers, they need to sit back and just watch him do his magic and that's all i've got to say . >> host: any reaction? >> guest: the media was wrong, pollsters were wrong and donald trump had a huge night and a great, historic victory.

we've interviewed donald trump four times and he's very media savvy. he's knows what the messages, he wants to get it out, that's a very good slogan. it was controversial to some but make america great again. hillary clinton struggled with a message. she was too careful. we tried to sit down with her, she would not sit down with a lot of mediaoutlets, she didn't have press conferences for the first 100 days. you can't run for presidency and to be too careful and get there. you have to go for it. donald trump went there and now he's the president elect . >> host: you are lobbying for the hill for a bit. trump vilified lobbyists but his win in the short-term, they write trumps stunning

and unexpected victory is likely to be a boon for the lobbying business despite his unpopularity among washington lobbyists of both parties because political upheaval and the changeover of power in washington heightens interest and concerns in the business community about the agenda and what will be pursued by a new administration and congress . >> guest: in the mid-1990s historically, divided government, you had newt gingrich and bill clinton and they got big things done. i got the balanced budget act done, welfare reform and the divided government worked in the mid-1990s area is not worked since then in 2009 when barack obama had a majority, you had obamacare, you have climate change, that died and passed in the senate. now republicans have the leverage of power so he will be able to get stuff done and i think most people agree that gridlock is not a good thing and but of course democrats are not going to like to see what is moving through capitol hill next year. >> host: hears mobile alabama on the democrats line. >> caller: i'd like to point out before you hang up on me

that i cannot understand how at 8:00 on tuesday night when i'm voting that i still believe hillary is going to win and all of a sudden things change and it's not just in alabama, wisconsin, it's all over the country. isn't that strange to you? i feel like we have been who dude in this and i hate to say that this has been, i believe the media, and certain politicians all was this little plan together and right here after the polls closed, they dropped a few extra numbersbecause you see on every state they won by less than 150,000. something is very fishy in this country and everyone better looking , looking because this electionwas stolen . >> host: bob, you mentioned these polo pollsters that are going along lines for pollsters, what does that

look like in terms of pollsters? what are media organizations stepping back and saying what can we do write the next time? >> guest: certainly if you look at the polls and you looked at the data that okay, donald trump had a shot going into election night but he had this on the table because these battleground states were close and he's going to have to win most of them. it turned out a state like virginia, which was a nailbiter, hillary clinton ended up winning but they counted the southern counties first. real clear politics average of all the polls and a lot of polls had her bike several points. i think number one, the pollsters need to, not every poll was lost wrong. the usc poll was fairly on but most of the polls were off.

in 2012 they were dead on. and actually underestimated barack obama's performance but i do think that the media needs to reevaluate itself. i think they have to look at the passion and enthusiasm that was therefore trump and it really wasn't there for clinton. >> . >> host: it's too early to tell what you are the editor in chief of the hill. getting forward, what's that look like in terms of getting out in the field and reporting on not just presidential elections but congressional election. does it change your game plan? >> guest: it does and you have to get out there. you have to go and i was in ohio recently and being in ohio, i could tell that clinton was going to win ohio. i didn't think he'd win by double digits but i thought ohio is going to go. if the import of having money in your travel budget so you can go places, talk to people and get out of the dc ball. this is an example, i went to manchester new hampshire a year ago and it was really the first time that i realize that this opioid issue is so devastating. i thought we have to start

writing about it but in dc at that time, we were talking about it. >> host: vendor who is in miami on the independent line hi there. >> caller: i'm curious, i keep hearing about this change, voting for change and i can't understand what that really means. does it mean we are going back to the transition era where the economy was in a whole? the stock index was so low? there were millions of people without health care, is that really what it is? what does it really mean? is it that in the parliament, the house and senate, is this where we really need it?

is this everything the president put forward and it was gridlocked by people like the senate and the house. >> host: the affordable care act, we had a couple calls at this point about people who have it now, concerned about what's next. >> guest: if you're going to take away benefits from people, you're going to feel the effects in future elections so that's what republicans i think have to get all their healthcare brain trust together and figure out a way to replace obamacare if they're going to repeal it and that's going to be the rob . and people are nervous about losing their benefits and it's a lot easier. that's why in 2012 if mitt romney and one it was a lot easier to repeal obama care because the benefits of not going into effect. after the 2012 election, john boehner said obamacare is the

law of the land and took a lot of heat for it butthey knew it was going to be difficult from that point on to eradicate the law . that's going to be their number one priority. >> host: in terms of specifics, house speaker ryan and leadership in house have been waiting their pamphlet of a better wage and a policy including healthcare and a number of other issues they propose for the next administration, for the next congress. how much of that you think becomes part of the trump plan? >> guest: a lot because as we discussed, donald trump is not a detail person and his administration is going to flesh out thesedetails in his budget without a doubt but all ran , he likes to get to the details so that could be a nice complementary duo of ryan and trump and certainly also mcconnell. however, they do disagree on things such as the tbb trade deal. there's no way trump is going to give him the green light. he's going to have to back

off that and other major issues that trump wants, i think on the part of the president, he's the one that got elected and they may not likeeverything the past but they're going to like it a lot more that they have a friend in the white house now and not an enemy . >> . >> host: he's got is negotiable negotiation skills on the campaign trail, could we see a renegotiated transpacific partnership deal? >> guest: that's something trump has said repeatedly that i'm not against trade deals, i'm just against unfair trade deals. he said like obama that he was going to renegotiate nafta and he saw doctor nafta a lot harder than obama did who never really renegotiated so that's going to be extremely difficult for trump to fulfill his promise but it's one of the promises that got him elected . >> host: here's paulette from newhampshire . >> caller: good morning gentlemen. first of all i'm ecstatic to think there may be good changes coming for all us americans. one of the things i'm

concerned about has to do with social security. there's been very little mentioned about social security in this campaign and in my research, i have discovered that, hopefully it's true, that our government has taken over $3 trillion out of the social security fund, yet no one speaks to this and we are just told that old, social security is in trouble and who's going todo something about it ? they continue to take more money out of it. this year during my watching what's going on in the campaign, one of kelly ayotte's republican people that was running with her brought up the fact that she had voted to take another hundred $17 billion out of social security. is this truly going on and if it is, why isn't it a ponzi

scheme and what can we the people do to stop washington from draining the social security fund? >> host: you have a specific response to that. >> guest: there's no doubt about it that social security and medicare are headed for ultimate bankruptcy so there's going to have to be something done. that happened in the mid-1990s, it was headed for bankruptcy and congress passed the balanced budget act and increased its solvency and because that's not happening next year or within the next five years, social security has more solvency certainly been medicare but at some point there are going to have to be some reforms and the parties don't agree on it. democrats are talking about expanding social security, having more benefits for beneficiaries. i think in the short term, once again i said earlier that donald does not support raising the age of social security like other republicans so on social

security, i think the recourse is calling your lawmakers and impressing upon them the issue. i don't think there's going to be many changes to social security in the first term. >> host: it may be a republican president will encounter issues of having to raise the debt ceiling. are we going to see those cliffhangers in congress when that happens? >> guest: absolutely. but this time you will see some, and i think this is going to be driven by capitol hill republicans is we can raise the debt ceiling but we have to cut government at the same time so we don't keep doing it again. i do think that is going to be, that's always very difficult and is going to be a very different dynamic now with donald trump in the white house. >> host: here's stephanie in moscow mills misery on the democrats line. >> caller: good morning to both of you. i have a few questions foryou if you don't mind . mister trump had some legality issues and as a president elect and or a president, how does that come about?

i don't know if we're ever going to have a president, does that wait until after his term? is it something he has to take care of now? you can discuss as far as the trump university charges, secretary charges explicitly. so if you could comment about that i'd appreciate it. also we have the debt ceiling coming up. the debt coming up in december, which he will take care of hopefully but march 2017 we have the debt ceiling that's coming up and with the freedom caucus, you know how that gets when that time span comes up, ted cruz etc. how is that going to work with a mister trump and also i hear of this big infrastructure bill he wants to do which is great. that will be a boost for jobs, construction. i see a lot of progress there. however, i'm not sure that's

going to fly with the freedom caucus going along with that. there's going to be some problems there. they demand cuts for spending so if he bloats the budget very much i think we're going to see a conflict in that. and as far as, i also hear a lot about bringing jobs back to nafta. one of the things i never hear anybody explain to anybody is that we've gone to an increase technological infrastructure and automated systems, the computerized age and a lot of those jobs are merely gone. they just don't exist anymore or a computer has taken that job over, it no longer exists and unfortunately nobody's come up with reasons or examples of what to do for a job after that. >> host: good list there, some of those we touched on already. >> guest: there's no doubt about it. donald trump has lawsuits against him, trump university is one of them. they will be continuing on.

he also, he is saying the irs is auditing him and he will release tax returns after. he will become president, that will continue to press him on that. obviously it didn't hurt him that much in the presidential election and the criticisms of trump university by hillary clinton and others didn't matter that much. the government funding bill has to be passed by december 9 and that's going to be an issue with the freedom caucus, the debt ceiling, the details of that are going to matter to the caucus so there are definitely challenges ahead for donald trump but he does have control of both the house and senate next yearand that's a big deal . >> host: trump having some impact on international affairs. the philippines new trade envoy, they write that the timing of president due care day of the philippines couldn't be better.

before donald trump's election victory, philippine leader had named donnis donald trump's business partner as a special envoy to the united states. mister duterte whose comments have drawn comparisons to trump namedthe chairman of century properties group, josc antonio as the envoy to washington for trade, investment and economic repairs . times writing that the company is building the trump tower in century city in 150,000,057 story apartment building in manila.mister trump has no involvement in the project except to provide his brand name. i've always loved the philippines, mister trump says. i think it's a special place and manila is one of asia's most spectacular city. the website notes that the project is not owned or sold by mister trump or anyone in his company. >> guest: the foreign-policy aspect of donald trump's rain is going to be fascinating. were going to see different relationships and obama had a contentious relationship

toward the end of his second term with the philippines. obviously russia is going to be a different type of relationship and putin congratulated trump yesterday. that was a big issue on the campaign trail on foreign-policy and national security we will see a different direction and we saw the last eight years be one next up is palatka florida, mike on the independent line, good morning. >>. >> caller: the republicans for years have been trying to get rid of the affordable care act because there's so many problems with it. when they give us the same benefits they had, the same healthcare? would that solve the whole problem? they always want to cut spending but they do it with domestic programs. how come we never hear about the welfare spending? you never hear them want to cut that. that's all. >> guest: that's an issue that comes up a lot is why does congress treat itself

differently than the rest of the country and that is something that they are on a government healthcare program . some members of congress decide to go on obamacare for that reason. there's no doubt that the anger in washington and donald trump's message on dc and going after the media elite is going to change this town. it's just a matter of how much. george w. bush bowed to change washington and be a uniter, not a divider. barack obama did the same thing and they failed to change washington. washington wins most of the time so we will see if donald trump is able to change both the gridlock and the culture of washington that everyone is so angry at. >> host: from princeton new jersey, on our republican line. >> caller: hi, thank you for taking my call. i want to say that i think donald trump will be the closest to being a president of the people and by the

people. i think he's going to have people coming to the white house that are not going to be special interest donors so he has a unique opportunity to have policemen, firemen, everyday people going to the white house on a regular basis as opposed to the highest donor or bitter but i want to address quickly the illegal immigration issue. i think i have a unique perspective of dealing with legal and illegal. i have, speaking on the philippines, my wife, came over on a fiancce visa from the philippines and she had a prior before i met her. she had a prior illegality, tried to get into the united states illegally and they deported her. there was a major black spot on her record coming in and

we went through a lot to try to clear that up. she's now a citizen but we know of illegals and i think there's a common sense compromising solution that can make this. first of all, we have to build the wall. we have to stop the influx. for those who haven't committed a crime, trump knows that we can't deport 12 million people so really the only logical solution is to give them a green card which will make republicans a little upset but there's absolutely no chance of citizenship whatsoever. they have to honor the people who come here legally weather through ellis island or through our own and if they want to become a citizen of the united states, they have to go back to their home country and get in line like everybody else. >> guest: those type of details are very important details. what can you do as the party

mentioned with the green party controversy with the opposition so i do think there's no doubt, donald trump, sometimes these things actually get bipartisan support. the act of 2006 was supported by both hillary clinton and barack obama, opposed by many immigration groups and harry reid created this is different obviously but at the same time it was the same thinking. border security which was popular and obviously that's a mandate that donald trump wants. that's the number one issue. >> host: who do you think will be supporting immigration for donald trump and house and senate and are there democrats might support some measures he proposes? >> guest: on the democratic side you have to think of the red state democrats were up in 2018, there are a number of them.the math is very friendly to democrats in the senate for 2018. joe donnelly, those are some of them, joe mentioned from west virginia area so right now, if you look at it, the

republican majority is narrow next year but they have a chance to expand as a few republicans are up in 2018. as far as who's going to be the point person, you have to look to the judiciary chairman in the house as well as senator chuck grassley from iowa, those are going to be the ones that would take the lead i imagine . >> host: chuck grassley elected for another term in iowa area let's go back to a few more calls for bob cusack. maria is in lexington kentucky on the democrats line. >> caller: i had a question about the k-1 visas for the people who are here illegally to be legal citizens and they are in the process of getting their papers, what is he going to do about it? >> guest: i don't know. he is not going into that much detail as far as i am aware of and this is something he will have to flesh out inhis budget that would be coming early next year .

>>. >> host: let's go back to congress for a few seconds, there is a lame-duck session and the hill.com as far as the relationship with paul ryan. ryan has set leadership elections next tuesday but despite calls from outside conservative groups, delay the races until they can evaluate how ryan handles issues during the upcoming lame duck session, writing the idea of ceding the exact same leadership after such a historic victory isn't sitting well with david mcintosh, president of the club for growth. republicans shouldreplace ryan but the speaker should rethink the opposition of his leadership team . with speaker ryan and powered by the wind for donald trump or is this like the club for growth or conservative growth

game a bit more foothold? >> guest: i think he's looking at a difficult speaker election if hillary clinton had one, he was going to strike deals with hillary clinton if you was the speaker in the new congress so i think he's empowered. these are leadership elections for next week. that does help the incumbents who are in leadership right now, doesn't give any challengers time to get a operation going so that may delay the conservative tax and i think ryan is going to hold true to that. there's a feeling where republican leaders will say through the freedom caucus and others, we need to be unified now for our agenda. a democrat is leaving the white house. let's stop bickering and get some stuff done . they're not going to agree on what stuff should get done so this is still a problem. >> host: a real opportunity for speaker ryan to make changes among the committee members, just look at some of the house chairs leaving for whatever reason. candace the administration. she's term limited in terms of her chairmanship and how rogers on appropriation, also permit

john ryan, leaving congress , fred upton, also limited. charlie dent, term limited and jeff miller who is retiring fromcongress . paul ryan will have the choice of chairmanship here. what does that look like for him? >> guest: those are big decisions and as far as, there is an aspect where republicans have to watch. it looks like replacing ryan on the education committee could be virginia fox from north carolina. >> host: a schoolteacher. >> guest: exactly because that would be the only female chair with candace miller leaving so the one big race here and speaking of obamacare is the energy and commerce committee, fred upton is leaving. he's trying to get his bill done in the lame-duck but he is term limited so the race is boiling down to greg walton who used it had the house republican campaign arm and did well as well as johnson kiss.

ryan has the most votes of anybody but it is still done by a number of leadership phones and i'm not sure who's going to win that race but that committee is very powerful so the commerce chair will have a big policymaking role. >> host: mark in fort lauderdale on our independent line. >> caller: yes, hello. i had you guys on in the background so i haven't paid 100 percent attention to everywhere that's been said that i don't know if this has been covered. i guess to phrase, the guy who said the election was rigged, he won the presidency with the second most popular votes. hillary actually won the popular vote and all this business about mandate and what they are going to do and all that sort of thing but the fact of the matter is more people voted for hillary then voted for trump and in a

way, i'm calling on the independent line, i'm an accident democrat whose very left leaning and i left the democratic party because they're also interested in compromise as opposed to standing up against the other side whereas republicans will fight, fight. already we've heard news that when trump called democratic leaders are all saying no, were going to work together. they need to be reminded that the first thing the republicans said when president obama got elected and took office was we're going to fight him on everything and do our best to make sure he's a single term president . >> president, bush did not win the popular vote in 2000. he did in 2004. since that time's democrats and won the popular vote, including hillary clinton. when tim kaine was introducing hillary clinton for her concession speech, he also noted. both hillary clinton and

president obama said we need to have a transition. you need to basically give donald trump a chance. he was elected president. nged. you know, donald trump won fair and square, he won the electoral college, and that's -- and democrats are saying that. yes, she won the popular vote, but our system is electoral college, and there you go. he's the next president. >> host: first reaction out of independent senator, bernie sanders, boston.com, in first post-election comments, bernie sanders presents donald trumpat two paths going forward, suggesting potential forte cooperation given some conditions. what's the role of bernie sanders and elizabeth warren and others in the party, in the democratic party now? >> guest: well, the democratic party has a vacuum.

i mean, this was, tuesday night was one of the most devastating nights in the history of politics for the democratic party. and the ramifications of it will be felt for years. so now we're thinking of, okay, who are the leaders now? because both michelle and barack obama, leaders of the democratic party, they're leaving. joe biden is leaving. so it's, obviously, nancy pelosi. now you're going to have a new minority leader in chuck schumer because harry reid is retiring. >> host: right. >> guest: but without a doubt, the progressives are looking to elizabeth warren and bernie sanders, and they both have a populist appeal that donald trump has. do they agree on a lot of policies? no. and i think that the two people on the left to watch are sanders and warren. they are, they have a huge movement behind both of them x they're going to be probably fighting donald trump a lot over the next four years. >> host: one more call for bob cusack. it's bill in canton, georgia. democrats line. >> caller: yes. i'd like to speak to social

security for a minute. that would be the easiest thing in the world to fix. right now if you pay in like $125,000, you make that much, you get your social security paid up? well, i'd like to see it run up to about a million dollars, and that way it'd give us a cut on the lower end of the spectrum. and not only that, the oval office with trump x be he needs to be search -- and he needs to be searched for a wire in case russia has got him wired up. thank you. [laughter] >> host: all right, bill. we'll leave it on that with the meeting today at the white house. if you could be a fly on theon wall, what would you like to hear? [laughter] i'd love to be a fly on the wall. it's going to be an incredibly, i think, awkward meeting more so for barack obama who said repeatedly on the campaign trail that donald trump was unfit for president. but barack obama is doing, i

think, what he should be doing. listen, the people have spoken, and we need a smooth transition of power.'t we don't want to have violence, so he's going to have to, basically, give tours of the white house to donald trump andd his wife, melania, and it's going to be, it's going to be awkward, there's no doubt about it. but at the same time, remember, like obama has mocked trump repeatedly especially at the white house correspondents' dinner a while back, and next w year donald trump is going to be giving the speech at the white: house correspondents' dinner. >> host: bob cusack, thanks for your time. editor and chief at thehill.com, also follow his reporting @bobi cusack on twitter. thank yous so much for being here. >> guest: thankthanks, always ey being on c-span. >> congress returns next week. on the agenda, legislation to extend government funding past december 9th. they also plan to work out differences between house and senate versions for aid for flint, michigan's, drinking

water system. you can watch the house when members return november 14th live on c-span, the senate on november 15th on c-span2. this afternoon pollsters and journalists discuss the lessons of the 2016 elections. hosted by the smithsonian associates at 6:45 eastern. we'll have that live on c-span. next, a look at the role of regulation in consumer credit products including payday loans. duke university's law school hosted a forum in late september. >> okay. well, welcome to consumer credit in america. we're extremely grateful that you're here, and we're grateful to duke university and to law and contemporary problems for working with us on this event. and we believe this is an

important moment in consumer law in america. it's in flux because at a federal level the consumer financial protection bureau has been up and running since 2010, has returned more than $5 billion back to consumers and now is aggressively pursuing regulation as well as enforcement actions. we've all seen wells fargo, and the cfpb has continued to really change the consumer credit landscape. and even states and municipalities have been passing legislation. i know in texas, where i live, almost 40 municipalities have passed consumer credit regulations or, i guess, ordinances to affect payday lending. so there's definitely a large amount of regulatory change. and so going along with that

regulatory change, business models and types of credit products continue to evolve at a rapid rate. i was thinking if you tried 20 years ago, you couldn't get a loan online. you certainly couldn't get it from individual people funding that loan. subprime mortgages may have faded away, but subprime auto loans have risen. and so both the regularlation and -- regulation and the business are in a state of flux. but despite the dynamic environment that we're operating in, there are some themes that continue to emerge, right? there's the same sort of themes of access and opportunity for people who need to smooth consumption over time, but also the same themes of exploitation, racism that have been in our credit system for years and

years. and so as we come to this moment, we think it's a critical moment for policymakers and academics to critically evaluate what rule regulation should play in these products x. so that's the goal of our symposium today. and if anyone is up to the task, i really believe that it's this group of speakers. we have people from policy centers, people who have just emerged from working in government and then a host of different types of academics. we have a wide variety of backgrounds and wide variety of preferences for how much government intervention there should be in these markets. and so i'm extremely grateful to all of the people presenting papers today for their involvement. and with that, we will start with the first panel. >> excellent. thank you, jim. i'm pamela foohey, i teach at the indiana university maurer

school of law, but i just want to take this opportunity to, again, say thank you to everyone for being here today. to the duke law students and law and contemporary problems, and to jim especially. the idea for this symposium was his, he got it off the ground, he kept it going, and he's really been the driving force in getting us all here. so thank you, jim, for getting everyone involved. so our first panel today is about consumer credit and the consumer financial protection bureau. and given the conclusion that the cfpb sparked possibly the most important moment in consumer credit, i think it's fitting that our first panel starts with it. the panelists will be discussing the breadth of the cfpb's powers to regulate, to examine and to collect, monitor and respond to consumer complaints. so christopher peterson, from university of utah, kick off the panel talking about regulation

of abusive financial products, and then angie lit wynn from university of -- angie littwin. nick bourke, from the pew charitable trust, will focus in on one regulatory power. and then i will finish up the panel talking about consumer complaints and the narrative component of the complaints in particular. so, chris? >> well, thank you. let me, first, start off by also giving my thanks to professor hawkins, jim, for organizing the symposium and also the students and staff here at duke university for hosting us. well, i just to kick things off i thought it might be useful to take a step back ten years ago and think about where we've come over the past decade or so. recall that in 2006, ten years ago, we were just at the

beginning of what was ultimately going to become the crash, the subprime mortgage market that spread throughout the world through derivatives and a host of other bank insolvencies and other problems. and in the great recession, approximately -- and you get different estimates, but the one that i've been going with is 7.3 million americans lost their homes to foreclosures or short sells, or but nearly $11 trillion in household wealth vanished. and the national -- and this had profound consequences. i won't go through all of them, but among some of them that are particularly poignant for me, the national suicide rate increased nearly 13% between 2005 and 2010. and, you know, it wasn't just for adults. this profoundly affected children. food insecurity increased from an average of 11.4 to 15.4% of households. so the notion that consumer

finance is, you know, a boring business/law-related area of the law, i think, is mistaken. consumer financial services are dangerous. if consumer finance doesn't work appropriately, people die and children go hungry. and that's why congress created the consumer financial protection bureau in the dodd-frank wall street reform and consumer protection act. well, by way of a disclaimer, i think it's accurate to give for both the folks in the room and also that may be viewing at home, i've just finished about four and a half, five years of working at the cfpb while i was on leave from a university. i just stepped down and returned to full-time teaching about a month ago. so i am invested in the project of the cfpb, and all of my remarks should be taken with a grainover salt. but my disclaimer is that none of the material that i'm discussing is confidential or private and has not been influenced or, you know,

suggested by the cfpb in any way. my presentation reflects entirely my own views and is based on publicly-available information. so in particular, in addition to the creation of the cfpb, title x of the dodd-frank be act also created a new prolix of abusive finance -- prohibition of abusive finance, and that's what my remarks are going to focus on today. in particular, this abusive standard added to what has been the long-held prohibition or the long standing prohibition of unfair acts and practices. these deceptive practices and unfair acts and practices have been illegal as most folks that are involved in this area of the law know since, you know, from many generations under the federal trade commission act and federal banking regulators have also had authority to enforce, bring enforcement actions based on those prohibitions.

but one of the big innovations in the dodd-frank act was to create this new prohibition of abusive acts and practices. and that abuse iness standard -- abusiveness standard was greeted with polarized views in the industry and among activists and commentators. a mentor to many consumer finance law psychological arounds around the -- scholars and recently passed away tragically, she said that the new abusiveness standard was arguably the most exciting development in consumer protection since the 1960s. that's a big deal statement from one of the country's foremost consumer finance scholars. but also on the other side of the sort of political or ideological divide, todd s wiki, a renowned scholar from george mason university said the abusiveness standard is dangerous, will likely chill innovation especially given the cfpb's tendency toward overuse of enforcement. and then practitioners that

represent financial institutions including, you know, some influential banking attorneys, they said that the bureau's resistance to providing further clarity or defining the abusiveness standard is a missed opportunity because an infinite ly flexible standard provides no permanent protection to consumers. so that raises the question that i'm interested in in in my pape. has dodd-frank's prohibition of abusive consumer finance measured up to either the hopes or the fears for this standard? and by way of overview, just a couple quick remarks about background and methodology, and be then i'm going to present just a few results from a quantitative study that looks at four years of the cfpb's enforcement of abusive practices through statisticses and some notable findings and maybe looking towards the future. so by way of background, the cfpb enforces a whole host of enumerated consumer financial laws including the equal credit

opportunity act, the fair debt collection practices act, a variety of other statutes. but my work today focuses more directly on the cfpb's authority to enforce the prohibition of unfair, deceptive and abusive acts or practices or so-called udap authority. title x prohibits all of these things, and it also prohibits individuals or companies from aiding or abetting through substantially assisting the prohibition or substantially assisting those types of practices. well and, and in particular looking at abusive, just trying to ground us all, it's illegal now to materially interfere with the ability of a consumer to understand a term or condition of a consumer financial product or service or to take unreasonable advantage of a lack of understanding on the part of

the consumer of the material risks, costs or conditions, the ability of the consumer to protect the consumer from selecting or using a financial service or the reasonable reliance to act in the interest of the consumer. so these are the -- this is the thing, this is what the statute says is illegal and how the statute defines what abusive acts or practices are. but how has that measured up? what has the bureau actually done with that? my study takes a look at 122 publicly-announced cfpb enforcement cases that range from 2012 to 2015 and then classified them based on a wade variety of -- wide variety of variables including, pardon me, total consumer redress awarded, civil money penalties awarded, enforcement partners, whether cases were settled or contested upon announcement, the type of company involved and whether or not it was an enumerated statute

or udap that was enforced. and just looking at the trajectory of the cfpb's enforcement actions, you can see over each year the number of employees in the line -- whereas the number of cfpb enforcement cases that were announced in the bar chart, and as the number of employees grew, you also saw a parallel growth in the number of cases. by 2015 the cfpb had 1529 employees, and the bureau announced 55 different enforcement actions. this chart also tracks the amount of consumer redress or consumer relief awarded to american consumers in public cfpb enforcement actions in the bar chart and then also in the line, you're showing a characterization of the amount of money that was awarded per cfpb and law enforcement authority. sorry, law enforcement employee. so if you look at the entire amount of relief that was

awarded and then divide the number of employees, that's what you get in the line chart. and in 2015 the cfpb returned $6,425,000,000 to consumers. and this is a relief awarded directly back into consumers' pockets. not penalties collected that the government holds on to, but this is refunds, etc. and if you add that up based on each employee, that works out to be just under $10 million per cfpb law enforcement employee. well, what about what kind of cases, what kind of products did the cfpb bring enforcement actions against? well, the largest financial product or service that received the cfpb's attention was the mortgage market, 47 cases which constituted 38% of the bureau's docket and amounted to about $2.9 billion in consumer relief. debt collection cases were the second most prevalent with 29 cases constituting 23% of the cfpb's enforcement docket.

and about $6.7 billion in consumer relief. credit cards were next with the largest sort of -- credit card cases returned $7 billion to consumers, and there are 21 of them over that four-year period. ancillary products that were sold alongside consumer financial services were a big part of the cfpb's enforcement docket. debt relief services, there were 13 cases that focused on debt relief services. student loans is, interestingly, was not as big a part even though it's the second largest consumer financial services market which is an interesting result. only six cases over the studied time period focused on student loans, even though that's a relatively large market. and then some of the, some markets didn't receive any cfpb enforcement at all including pawn loans and remittances. well, this chart shows the different enumerated cases that, enumerated statutes, selected enumerated statutes that the

cfpb brought enforcement against, and you'll notice the relief is, by bureau standards, relatively modest. most -- the truth in lending act, for example, cases that pled violations to the truth in lending act only led to about $306 million in consumer relief which sounds like a lot of money for a private case, but for the cfpb given the 10-11, $12 billion that it's returned to consumers, $300 million is a modest portion. much more significant was the enforcement of deceptive trade practices. about $10 billion was returned to consumers over the studied period in deceptive trade practices cases which constituted 93.2% of the total amount of consumer relief. so the large bulk of the cfpb's return, you know, restitution refunds that were returned to consumers came in cases where the cfpb pled deceptive trade practices. compare that with the abusive

cases that pled abusive practices, it turns out that only 1% of the total relief awarded in abusive -- sorry, cases that pled abusiveness as a violation only returned about, constituted 1% of the total consumer relief awarded. so what this tells me is that the cases that pled abusiveness tended to be small cases that didn't actually -- where consumers, not a lot of consumers, and the amount of money at stake was relatively quite modest. which is, i think, surprising given the level of controversy that was involved. i think i'm running a little bit short on time. this is a list of the different abusiveness cases that were involved, and i think the takeaway point here is that it was the middle two of those prongs where the cfpb most relied on in bringing enforcement cases. and those are the prongs that in particular where the bureau's required to show unreasonable advantage-taking of the consumer. so some notable findings as i wind down. well, deception rather than abusiveness has so far proved to

be the bureau's most important legal theory. 73 of 132 cases pled while only 14 cases pled an abusive practice over the studied time period. approximately 93% of consumer relief was awarded in cases that pled deception while only 1% of consumer relief was ordered in cases that pled abusiveness. and between 2012 and 2015, the bureau did not accuse any banks of abusive acts or practices. that changed recently after the studied time period. wells fargo was accused of abusive practices in the creation of bank accounts and debit card accounts without consumers' knowledge or consent. and that was the first time in the entire four or five-year history of the bureau where are a bank had been accused of acting in an an abusive way. and it's also important, i think, after reading all the cases that every cfpb case alleging abusive practices has also alleged some unfair or and/or deceptive act or practice. and oftentimes the abusive

practices theories tend to look to me as though they are in some sense derivative of the same types of claims we've seen in deception and abusive acts or practices claims. so then i guess maybe the takeaway point there is that the fear or the optimism over the abusive acts or practices standard, at least so far, both of those have proven to be misplaced. so looking to the future and some challenges to consider for the bureau and for commentators on the bureau's work, it seems to me a key question is whether or not the cfpb's attentiveness to the dodd-frank restriction on the establishment of a usury limit is that impeding the development of a jurisprudence on unreasonable advantage-taking. the cfpb was not allowed -- prohibited from establishing an interest rate cap. but at the same time, the cfpb has been charged with prohibiting any unreasonable advantage-taking where consumers can't protect their own best

interests. so whether or not the effectiveness has been inhibited by the fact that the cfp can't establish a usury limit. can you really, in consumer finance, prevent unreasonable advantage-taking if there is a prohibition of any usury limit so it seems to me that the bureau needs to -- if it wants to have a robust and innovative abusiveness jurisprudence, it needs to come to terms with what a usury limit is and what it is not. and then finally, is there a viable theory of abusiveness that cannot be ameliorated by enhanced disclosures or regulation? our activity -- are there activities that are abusive even when the consumer understands the terms of the deal? does abuse iness mean something more than deception? and with that, it seems to me that as we look to the future and whether or not someday we'll have another consumer financial services crash in the economy and whether or not we will

continue to have a meaningful consumer financial protection will depend at least in part on how the cfpb answers those questions. thanks very much. [applause] [inaudible conversations] >> great. i'm angie littwin from the university of texas. thanks to jim and everyone who organized this for inviting me. i'm about to present a paper that i finished, quote-unquote, of jean brocker's after she passed away. she was writing it for a symposium honoring bill whitford. the paper's already been published, but i like to continue presenting it because, as chris said, she was one of the leading scholars, she would have unquestionably been here today, so at least her ideas are here. for the symposium she took

bill's article from 1981 called structure in consumer legislation to maximize effectiveness and applied it to the cfpb's supervision powers. bill's observation started from -- bill's article started from the observation that was still true leading up to the bureau's creation, that while there was plenty of consumer protection on the books, there was much less consumer protection in action. he laid out a series of hypotheses about what might promote consumer protection. he had three main hypotheses. first was statutory specificity, right? rules are better than standards because they encourage voluntary compliance in the shadow of enforcement rather than with direct enforcement. with vague standards, companies give themselves the benefit of the doubt. of course i'm not doing anything unconscionable. with rules, it triggers a company's belief in being law-abiding citizens and

harnesses their fear of bad publicity. but he argued it's good to have overarching standards as well because to encounter situations that weren't thought of by the legislature or because practices change. his second insight was about the cost of guidelines. obviously -- of compliance. his insight was divided into two types. one is direct transaction costs, and those are, you know, the costs of writing new disclosures, for example, as they come out. for those, generally, the lower the better, right? lower transaction costs help companies comply better, and that helps consumers. but there's also indirect transaction costs which are, essentially, the substantive costs of compliance, right? the revenue that companies forgo because the practice is now illegal was making money. so, for example, with credit cards, over-limit fees used to be charged all the time. companies sort of gave up on

them, and according to the cfpb, there's been a $2.5 billion transfer from credit card issuers to consumers as a result of -- in general. so important insight about why consumer protection is so difficult, right? indirect costs are in many ways a zero sum game. a consumer's game is a company -- gain is a company's losses, and it also means companies are most likely to comply with regulations and rules that cost them the least. for example, the tealer disclosures. everyone's happy because they're probably not that effective in some ways. final point was remedies. then as now private remedies have never been enough to affect enforcement, and his argument is that public agency crucial for having, for having real enforcement. and that within a public agency the most important concern is its dedication to consumer

protection. so this is a case study sort of applying those principles to the cfpb's supervision program. the statute, starting with the statute, it did set up a framework that's likely to lead to company-consumer protection and company compliance. it meets bill's best case scenario of broad standards backed up by specific rules, right. >> it has three broad statements of purpose of supervision but then backed up by, as chris mentioned, the 19 statutes or parts thereof that were transferred to the cfpb and the udap powers. its practices also appear to be meeting the criteria for robust consumer protection. most obviously, supervision is focused laser-like on increase ing compliance with consumer law. that's directly on point.

specifically, the entire supervision process is about detecting and reducing the risk of udap and other legal violations. the bureau, its hole life cycle of supervision depends on predicting risk of legal violation. so it prioritizes, for example, it prioritizes companies for -- and products for examination by the risk of legal violations. so if you're a low-risk company or product, you're not even going to get supervision nearly as up. this enables the bureau to stretch resources which are its biggest complaint -- constraint given the breadth of its mandate, and it also incentivizes companies not to engage in risky practices, right? because not only will they have more favorable supervision, but they'll also have less of it. second, there are several specific features of the bureau process that are likely to increase consumer protection. the first is the bureau's focus on compliance management systems.

a term so prevalent it even has its own abbreviations, cms. it is designed to promote voluntary -- again, in quotes -- compliance in the shadow of enforcement rather than as a response to direct enforcement. the bureau has set out the expectation that companies must prevent violations of law and associated harms without the cfpb's direct involvement. it also expects compliance will go all the way to the top involving senior management and members of the to board of directors. and large institutions are expected to have a chief compliance officer with that person's own staff, an entire division. there's also -- companies are required to have independent auditing. they're required to do their own processing, and then they're also required to have

independent auditing of their compliance. so if the bureau can convince companies to do this, that will vastly improve consumer financialing protection and maximize bureau resources, again, which is the largest constraint. companies that are essentially engaging in self-supervision likely offloads a lot of the work onto them as opposed to the bureau itself. second, cfpb's supervision is very, very thorough. they review documents extensive ly from their examination manual, just to read you one, a list of documents. training materials, disclosures, notices, agreements, periodic accounts and statements, written procedures and policies, minutes of board meetings, you get the idea, right? and there's more. so it's an exhaustive process. it looks at products throughout the life cycle but pays special

attention to new products, right? examiners are to review documentation related to new products, marketing and media, scripts and recorded calls. next, its enforcement via supervision uses a variety of approaches. chris talked about the are republican enforcement actions, but cfpb also uses nonpublic supervisory actions and makes it a spectrum from the lightest touch of nonpublic supervisory actions all the way up through public actions. so the nonpublic actions, the lightest touch is making recommendations which are simply suggestions to the institution. the next level up is matters requiring attention which set a timeline for resolution and require a response to the cfpb. and then finally, the top level of private enforcement is private enforcement with

monetary penalties. and in the bureau's supervisory highlights, it will list an approximate sense of the violations, what industry was involved, what laws were involved and the amount of restitution to consumers and financial penalties. public enforcement is what chris was discussing, right? the consent decrees. and the bureau really effectively revages publicity -- leverages publicity. it goes to great length to conceal the institutions subject to private enforcement. we'll say one or more credit-reporting agencies because there's not that many, but it will also say one or more mortgage servicers of which there are many, but it's still going to lengths to protect confidential. in contrast, press releases, more compliance bulletins, and the cfpb wants to get the word out. so that really does a good job of harnessing companies for fear

of bad publicity. if you stay on the private side of the line, you're not going to uncur the pub lusty costs -- incur the publicity costs. the spectrum of enforcement also has the potential to short circuit companies' cost benefit analysis in terms of how much cost, will enforcement cost me versus how much am i going to gain from this process that is now prohibited. because the cfpb can improve enforcement to the extent necessary to engender compliance. but in addition to using this santorum be of enforcement -- spectrum of enforcement, the bureau early on did public enforcement actions which put the company on notice that thatn violations are egregious enough, the bureau will go straight to public enforcement, and the companies cannot count on warnings. this creates additional incentives for voluntary compliance. so overall, these supervisory

activities set up the dynamic of the type that whitford described for specific statutory commands, right? in addition to direct deterrence, the bureau is harnessing companies' beliefs in being law-abiding and fear of bad publicity. but there are some potential pitfalls. a few ways that the bureau's commitment to consumer protection could decrease. one, of course, is regulatory capture. i'm not going to go into detail about that. everybody knows about that, and there has been somewhat of a revolving door at the cfpb. second is a hostile presidential administration. if they don't kill the agency outright, could install people at the head of it who are hostile consumer protection. these are always a danger, but they're a particular danger with supervision. and that is because supervision is confidential. we wouldn't necessarily know it if the cfpb started supervising less rigorously. it could choose simultaneously

to become less active and less forthcoming. and confidentiality is a key part of the process. the voluminous internal information gathered is competitive information including about new products, reviewing it would hurt consumers by hurting competition and keeping things private encourages voluntary compliance. companies are more likely to be forthcoming without confidentiality, companies would be more likely to hide programs when the cfpb wants them to explain their problems, show their prop problems, demonstrate them and show how they're fixing them. it also reserves publicity as an enforcement threat. so there's good reasons, but it means that journalists, researchers, foundations, consumer activists, we can't know what is happening. a couple potential ways to address it. the main way the bureau's been addressing this so far is by strong public compliance practices which will, hopefully, set the norm for future

administrations. it releases these documents, the supervisory highlights that are the sort of fascinating blend of confidentiality and transparency. they're recommended reading. i find them really interesting. they describe the bureau's findings, the practices it's concerned about, the degree of company compliance management and any restitution that's required. but it doesn't name names unless an enforcement rises to the level of public enforcement. so it gives you as much information as you could possibly get, i think, without compromising confidentiality. one drawback is the reports are not going to mention issues that the bureau decides were not serious, right? so there's no way for outsiders to render judgment on those. another possibility is for keeping compliance going is having the chief compliance officers within companies themselves, they may become

voices for compliance within these organizations. i will end on a positive note, right? if future administrations don't kill the agency outright, there's some hopeful signs, right? the protective factors in the statutory structure are likely to continue to lead to a strong commitment to consumer protection, and the bureau's current commitment to supervision suggests that we will at least have consumer protection during non-hostile presidential administrations which is much, much better than we had before. [applause] [inaudible conversations] >> hi, everybody. i'm nick bourke, i'm with the pew charitable trusts. pew is a large nonprofit organization, nonpartisan, and

our main goal is to generate high quality research that is relevant to public policy and helps improve public policy. i'm going to talk today about a very specific example, payday and auto title lending. this is an area where it's one of the bureau's early forays into actual rulemaking. they've done a lot of supervision and enforcement and built up their system and capacity there. they're still relatively early in their actual rulemaking process. and i'm going to talk about a pending rule for payday and auto title and similar loans. if you're not familiar with payday and auto title loans, payday loans are small loans, they tend to be about $375 on average. they're usually due back in full on the borrower's next payday which is typically about two weeks away. so you borrow $375 today, the typical fee is $55 on top of that, you owe $450 on your next

payday. auto type loans are similar except instead of having access to the borrower's checking account, an auto title lender holds the title title to a vehie that the consumer owns as, effectively, collateral to the loans. and those loans tend to be a little bit larger, about $1,000 on average, and those are typically due back in full after one month. our bottom line in this area -- and i should mention that pew be has had a small auto loans operating for five years now. we've done deep research in this field. there are deep harms, there are significant harms going on in the payday and auto title loan program that warrant with regulatory reform. and the bottom line of what consumers need in this market is they need affordable payments, and they need reasonable time to repay. there are others, and i'll touch on them. but regulatory response definitely warranted and should try to achieve those goals.

my agenda in my talk today is to talk about a little bit of the facts in research in this industry. i'm going to talk about the cfpb's pending rule. i'm going to summarize this rule, and i'm going to say our analysis of some of its shortcomings and some of the effects that it will have in the market. and then, hopefully, i'm going to tee up a few questions about the consequences and legal implications, and maybe we can talk about some of those. so a little bit about who payday loan borrowers are, there are about 12 million of them every year, and they're spending about $9 billion on these loans. contrary to conventional wisdom, these are actually very mainstream consumers. in order to get a payday loan, you have to have a checking account. it's required to get a loan so you're banked in the common parlance. you also have income, because you have to to get a payday loan, and that's usually from working. and people who get payday loans are not actually at the bottom end of the spectrum income wise.

the average payday loan borrower has income of about $30,000 a year which equates to about $saw an hour. $15 an hour. also what we refer to as thick file consumers meaning they have a lot of experience with credit. these aren't young people or immigrants trying to strive their way into a credit system and learn how to use credit and get boo it. these are people who have used credit and are failing out of the system. the typical payday loan applicant has a credit score, fico score of 517. and if you know anything about how that system works, that's bottom of the barrel. it means they're not going to qualify for any other type of mainstream credit. if you want to get some more of these types of facts, i'll refer you. we have tons of it on our web site. one thing worth noting is that the reason why people get payday loans, by and large, is just to get by. people are living paycheck to paycheck, and what we have found

is that seven out of ten times when somebody first gets their payday loan, the reason they're getting is it because they're trying to get help to pay a bill, a regular, recurring expense like mortgage. 41% of them own homes. credit card payment, measure half of them have -- more than half of them have credit cards, but they tend to be maxed out. it's rather el.com that somebody gets a payday loan specifically because the car broke down or they have an unexpected medical expense. it's really that people's lives are difficult financially and volatile financially. and income volatility is a really interesting area of the research. we're getting to know a lot more about income volatility in american households. amazingly, almost half of u.s. households are what researchers would characterize as income volatile meaning their income is going up or down by greater than 25% even from month to month. that is astounding.

and i think what explains a lot of this is that there are a lot of people who are hourly wage earners, and if you're an hourly wage earner working at a factory, retail or restaurant, often times your schedule is unpredictable, and it changes a lot. you'll get 35 hours this week,40 hours next week, it goes back and forth. and so your income, of course, varies. it makes it more difficult to budget. it means from time to time you have gaps. so just to el strait that a little bit, some -- illustrate that a little bit, some research shows a typical households will have more than two up months and more than two down months over a given year, and so your income over the course of the year might look something like this. if you're a typical payday loan borrower and you're making about $30,000 a year, that breaks out to about $1250 every two weeks. so if you're paid twice a month, you're getting about $1250 every two weeks. now, if your income is volatile

in this way, it could be going up or down. that's more than $300 from paycheck to paycheck. so it's easy to see how a lot of households get themselves in the situation where they need two or three or four hundred dollars to pay a bill. and this means credit can only be helpful if it's structured a certain way. and i can tell you the way that payday loans and auto title loans work today is not helping most people. and the core reason is that when a payday loan comes due or a title loan, it comes due in full, in one big, lump sum payment. the lender takes the whole thing out of the borrower's checking account or requires the borrower to come in and pay the thing all. typical loan payment takes up 36% of a person's paycheck even before taxes. now, imagine any of us losing 36% of our next paycheck.

it would be a hard to make ends meet, i'm sure, for most of us. for somebody living in this situation where they went to get a high-cost loan in the first place to help pay bills, it can be devastating. and so the borrower goes back, pays the loan because they have to because if they don't, the lender will just take it out of their checking account, and then they pay a fee and take the loan right back so that they can pay the rent or pay the mortgage. this is the cycle of debt that people often talk about. this is only made possible because of what the cfpb has termed the leveraged payment mechanism. that's the ability to reach into the checking account or repossess the vehicle title in order to enforce or insure repayment. this brings us to the cfpb's proposed rule which is open for comment right now. the comment period ends on october 7th. this proposed rule would cover covered loans as defined by any loan that lasts hess than 45

days -- less than 45 days, your conventional payday or auto title loan, or certain high cost installment loans. and that means a loan where two key conditions are met. the all-in apr, so this is the annual percentage rate inclusive of interest and any fees or that are involved, is greater than 36%, so they've kind of coined that as high cost. and the leverage payment mechanism is present, so the a access to the checking account or the vehicle title. they've carved out certain things like overdraft in credit cards, but for the most part, this covers the high cost of installment market where the leper has a leverage payment mechanism. this is lender-ago knost ec. it will cover any lender including banks and credit credt unions. the way this rule works

generally is it gives the lender a choice of how to comply. the way that this table is laid out, on the left side are your short-term loans, less than 45 days. on the right side, are the longer-term covered loans, greater than 45 days, high cost, leverage payment mechanism. the top row is the core part of the rule. the cfpb says if you're going to make covered loan, you have to conduct an ability to repay analysis. you have to make sure that you're evaluating the borrower's financial situation, and you can making a reasonable determination that the borrower can pay this loan according to its terms. the bottom row is a number of traditional exceptions. the cfpb says you you don't have to follow that core process if you follow some rules about be the way that the product looks or the way that you make it available. i'm going to focus on box three, it's the upper right-hand section. it's the core ability to repay rule for covered installment

loans. now, before i kind of explain how all that would work, impacts of the cfpb rule. it will strongly encourage an installment payment restructure. the payday and auto title loan markets are already becoming, have become installment loan markets. that's the future of payday and auto title lending. this rule will not eliminate high cost of credit. 400% apr loans are here to sty, but they're going to be installment loans in lines of credit. the rule discourages in many ways safer and lower cost alternatives because it makes it difficult for mainstream banks and credit unions to get into this market. here's what i mean by high cost installment loans thriving. the orange states, and there are 28 of them, where pay today and title lenders are already making lines of credit of the type that would qualify under this rule. the dark green states are states that have credit service

organization act laws that lenders are starting to use in order to evade existing state protections. and the light green states are where payday and title loan stores don't operate today except for alaska and maryland which just in the past couple of months, the payday and time lenders have gone in there. the bureau -- i'm short on time, so i'm going to kind of skim through this quickly. but the bureau sort of has some shortcomings here because they don't actually regulate the leverage payment mechanism in any significant way. they're very focused on the ability to repay process, the process of evaluating and underwriting the rule. they don't put limit on this very powerful leverage payment mechanism. and the leverage payment mechanism is inherent inherently dangerous. ironically, it's the only reason that credit is able to flow to this type of customer with a 517 credit score. they inherently have danger to a

financially fragile consumer who's living paycheck to pay check and who is, in many ways, desperate to get this credit. the ability to repay process basically works like this. it requires the lender to pull a credit report toererfy existing obligations, and then it requires the lender to estimate everything else. housing, if it doesn't show up as a mortgage on the credit report, food, you -- utilities, transportation and other living expenses which is not defined. the formula is pretty simple: figure out the remaining income after all those expenses are left, subtract those formal debt obligations, quote-unquote, other living expenses. that's the amount of payment you can take. i don't really have time to go through this, but what this is showing you is for a typical payday loan applicant, the bureau is estimating they have

$689 of remaining income before they pay off their credit card bill and before they pay, quote-unquote, other living expenses. so $689 after they've paid the mortgage, after they've covered all of their food, all of their transportation, all of their basic living expenses. that's kind of the range of field that the linder gets to play with, and it's -- the lender gets to play with. .. the widespread harmful loads are airing tuesday on the market.

they liked these vague standards. the largest payday lender called it a win-win. their loan is a 1250-dollar bomb where the monthly payments are $370 a month and $3700 total. to pay that 1250-dollar loan back. here's an example about we are seeing popping up on the opposite of the spectrum are the lenders structure to do a small loan to last a long time, three new dollars from 18 months, 49-dollar equal payments will go to your pay standard easily. so the shortcomings image before it's going to be difficult to enforce because it's going to be daunting to enforce because there are no clear standards and these are fragile borrowers who will continue with these loans. i am short on time so i will just mention that there is a flipside to this too where the rule is trying to whack the bad

guys but it makes it really difficult for the lower-cost lenders to get in. thanks and trade unions don't want to get into this market unless they can do with clarity because there is a lot of regulatory risk for regulatory risk whereas payday lenders have a high appetite for regulatory respite of going to mention these consequences really quick. at the end of the day the most apparel strengthens its rules to be better at whacking the bad guy and better at letting lower-cost loans in to save people a lot of money to consumer benefit is dubious because of this rule. that makes it difficult and that makes it difficult for the bureau to justify this rulemaking in the face of what are going to be very dressed up challenges from opponents of reform. the cost-benefit analysis is going to be difficult in fairness focuses and proving

abuse and stopping abuses going to be difficult. thank you, i'm sorry i went on. a positive. >> thank you all again for coming. about a year ago, this flyer arrived at my law school office and i put it on my desk and took a picture of it. a flipside gives you the exact same thing in spanish and it's about very vague and i pass it out to my students sometimes and i commend to my office asking about consumer protection and consumer credit. when i got the flyer at that time i knew as most of you probably know the cfpb has a

complaint function whereby consumers can sit at complaints about particular products or services that are under a regulatory structure it in the course of submitting their complaints write a narrative about the problems they are having which is sent directly to the company. so my broad project and a paper that i'm putting together for this symposium focuses on the narratives written in conjunction with that complaint function but it was this flyer that got me thinking about the place of writing a narrative in the cfpb's broad goals of advancing consumer protection so i want to talk a bit about the tell your story feature and how it represents the complete -- complaint database. this is a snapshot of the webpage from the cfpb's web site and it has as you can see as they circled in red, a prominent

place to send consumers to the complaint function and it's part of the cfpb's rotter goal of hearing consumers and also allowing consumers to hear each other so if you don't want to submit a complaint you can tell your story but they really would like you to submit your complaint. if you go to submit a complaint web site you basically come up with this front page. it sends you in the red box to tell your story although it's a little less prominent. it also directs people to the complaint database if they want to read about what other consumers have said about their experiences. otherwise they can pick alone and if they are having a problem with click on the link and get a web form that allows them to check some boxes. many boxes in some instances and many boxes in other instances but all of them lead to a very large place where consumers can

type in what the problem is they are happening and if there are other experiences. the complaint databases where i get my data from, this is the front page of the complaint database which is also where consumers would go if they want to see what other people are writing. of note the cfpb says reading consumer narratives will allow others to learn from the consumer's experience. again played us know -- please let us know what's going on in importantly help the cfpb improved the financial marketplace. and though the cfpb began taking complaints basically the moment it opened and started publishing the database in june of 2012, who wasn't until june of 2015 about a year ago that started publishing consumer complaints narratives for public use and public consumption. the narratives areo