options for states to deal with immigration, you are talking about international discussions and flows across national borders and so, out of frustration that congress isn't doing anything and that they are really only allowed to do some things, they are focusing on the enforcement piece and have had devastating consequences for their economy. georgia has a labor report out. alabama has a labor report out that has been very harmful to their economy because in swingiswing ing wildly out of frustration that they have not done something, they have cost bills that have cost their economies great harm. they have seen an evacuation of workers and they have experimented with every pilot

project imaginable that has ever been floated for immigra ajobs immigrants have ever done. they have tried prisoners and you a these things and it lasted until last time. from florida's perspective we watched closely the alabama and georgia model and it has given us a real world-real time example of what happens when you get the state-pace estate-base wrong and it re-enforced why you need to get it right on the a federal level. >> gentlemen here? >> i'm from minneapolis, a year ago at the launch of the hln, we

heard from lieutenant governor maldanado and he said it passionately and i think we need to hear this again. he said that the latinos in california, which are a from percentage of all latinos in this country do not want amnesty. and i think we have to listen to that. another thing that we to not do that well is latinos to not talk about border security. i'm an american, i'm an american hispanic, i want a strong border and i do not think -- i want to ask mr. gutierrez, are we doing a good enough job of listening to policy reform instead of listening to the politicians that are not talking about it at all. >> you bring up a good point and i don't know what amnesty is.

any time that somebody has proposed a solution, that doesn't sound like amnesty to me, someone calls it amnesty, it has become the one word that can kill an p ideidea. it confuses people and people don't then know how this should feel about a certain issue. at one time they were calling the fence a wall -- >> just a couple of minutes left in this event, you can see it in its entirety on our website. we have the senate banki ining committee, richard cordray will be delivering the first semiannual report to congress. in it the cfpb said it received more than 13,000 complaints related to mortgages, credit

cards and other financial products. mr. cordray previously served as ohio attorney general.

good morning. i'll call this hearing to order. before we begin, i'd like to send my best wishes to senator mark kirk for a speedy recovery. he is is a ranking member of the sub committee in appropriations which i chair. i have no doubt that with his strong will and determination he will be back at work as soon as humanly possible. our thoughts and prayers are with him and look forward to his return. today marks the first banking committee hearing of the year. i'm confident that we will have another productive year in the committee as we build on the foundation set in the first session. our committee tackled an aggressive agenda last year and

i think that all of my colleagues were the contributions. in 2011, we held 72 public hearings and executive sessions including 60 oversight hearings. of those 26 were sub committee hearings and i want to acknowledge those members for their leadership. i'm proud to say that we were successful at finding bipartisan concensus more than a few times. 26 nominations with the senate confirming 17 of those nominees. we were also unanimously approved authorizations for the

national flood insurance program and for the charter at the export bank of the united states. senator shelby, i would like especially to thank you for working with me last year to plan bipartisan hearings so lay the fou foundations for mortgage reform. i hope that we can continue to work across the aisle and i expect this committee thursday to approve bipartisan bills. looking ahead to the rest of the year, my priorities will be to oversee implementation of the -- to continue building concensus on housing finance reform and to

look out for the interest of rural and troubled areas and the smaller institutions that serve them and act on the president nominees and to pass critical programs. the committee will also continue to closely monitor the situation in europe. in the coming weeks we will take a closer look at the state of the housing market and some of their proposals for adjusting housing stock surplus and hear from the federal reserve on the up coming monetary policy report. based on bipartisan successes that we had last year and the

importance to continue to meet the economic challenges that face our country, i'm optimistic that we will find common ground this year. let me turn to an issue that we should all agree on. how well the consumer financial protection bureau has fulfilled on its mission. i would like to welcome mr. cordray to provide testimony and the bureau's first semiannual report to congress. i would remind that we are not here to debate mr. cordray's appointment, we are here to role up our sleeves and provide oversight of the consumer bureau to make sure it's fostering an open and consumer financial

marketplace. t the committee has a tool to make sure that the bureau is accountable to american consumers to require the director to report to this committee at least two times a year. it's our job to help make sure that the agency is doing its job effectively and efficiently. so to make sure is bureau is accountable i point out the simple fact that it is and that is why we are here today. mr. cord it wiray, i know you sy belief of oversight over the bureau. this is the 13th that a bureau employee has appeared before

congress. and your agency's outreach to stake holders has been applauded across the board. it has been six months since a consumer bureau officially opened for business and only four weeks since it acquired all of its powers. yet in this short time bureau employees have been hard at work. they have finalized the role and consumer remittances and are currently reviewing comments and other proposal, they have to act on the know before you owe program. they are developing a student loan work sheet to help students and their families shop loans. and they have also rolled out supervisory and large

institutions. mr. cordray, we look forward to hearing fru in greater detail about this on going work. recently you made comments about the role of the agency on reviewsi i reducing burden on rural banks and small community banks. i'm interested to hear more about the bureau's plan to ensure that in future rule making the right balance is struck between protections for consumers and regulations for small institutions. final i would like to hear about progress in two areas, that the economy reviewed last fall. consumer protections for service members and for he oolder ameri.

mr. cordray, although your staff is faced with a difficult task, i have confidence that you are all up to the challenge. i look forward to your testimony and working with you to he enha our consumer financial markets. i turn to mr. shelby for his comments. >> today we will hear from mr. cordray, since the bureau was proposed i have expressed my grave concerns about its lack of act ability. i maintain that it's inconsistent with our constitution constitutional powers to have so many power in one department. the dodd-frank act designed it to be free of the most basic checks and balances.

and unfortunately the president has gotten around one of the only checks with this appointment. i hope that the supreme court will determine this issue. because of the structure of the bureau, this means that mr. cordray will have unfeterred power. if he so chooses he does not have to answer to anyone. this is not a choice that anyone should have. since his appointment, mr. cordray said that he intends to cautiously. the test is whether this will

it's way into the bureau's actions. the actions have been inconsistent with the promise of the leaders. under dodd-frank the bureau is required to convene panels of small businesses to discuss the impact of proposed regulations. mr. cordray has said that they will convene these small panels not just because the law tells us to do so but we recognize that it will help us do our work ever. the bureau has yet to convene a small business panel despite having issued multiple rules and more over the bureau has indicated that it has no plans to convene these manupanels fort of the important rule makings. the bureau officials said they will comply with the administrative procedures act

and the bureau has evaded the intent of the apa by issuing rules without asking for public comment before the rules become effective. consequencely the bureau has imopposed costly regulations to american population without providing the american population any room for comment. one would think the bureau would have gone out of its way actively seek public comments on the rules. in a speech last year the deputy director stated, the bureau will invite public input to provide a fact base to help the bureau evaluate the costs, benefits and impacts of the rules and on suggest alternatives. those were his words and he stressed that the bureau would

be quote, fact based and deliberate, the recent rule making process shows that they like to give the appearance of listening to the public but really knows what is best without much public interference. more overi it suggests that the bureau will not be stopped by having to collect public comments. it's a division between the -- the seek to make regulations more effective and achieving intended benefits for consumers while lowering costs for lenders. it suggests that lowering costs are not high on its priorities. the bureau's own analysis reveals that compliance with

this rule will require more than 7.6 million hours. that means that more than 3,800 employees will be required to work on compliance for this single rule. rather than conducting a cost/benefit analysis they will i impose the rule. we were told that research was core to its work in contrast, the bureau's remittance transfer rule suggests that what it comes to basing its rule on a examination of facts and data the bureau isn't all that interested in living up to its own rhetoric. early last year, 44 of my colleagues and i sent a letter to the president stating that we

would refrain from considering the nomination of any person to be the bureau's first director until changes were made to the structure, not its authorities. during the september hearing on mr. cordray's nomination i stated that i feel these changes would help to preserve the checks and balances in our constitution. the recess appointment has shown that the president is not much interested in any constitutional checks on his power. my democratic colleagues seem to share the same opinion. the bureau is so receive a total of $29 million in federal reserve money and it could grow to well over a half a billion dollars by early next year. so these payments are made directly to the bureau without any oversight through any congressional appropriation's process and the bureau has

already hired 800 people and it's been reported that the bureau hopes to hire as many as 1,000 people thby the end of th year some making 225,000 tl$225 year. my colleagues have resisted this, every effort to make it accountable. and they have cut this committee's funding by 25% making it more difficult to oversee these massive departments that are growing in size and power under dodd-frank. as i said many times, things are not getting better, just bigger and more unaccountable. our financial regulators have become departments, and now the regulators reassemble the

financial firms they were to oversee. they tell the public one thing and do another. it evades the law and ignores consumers while advancing their own special interest and operates behind unaccountability. just as financial firms need to be held accountable so do regulators. thank you, mr. chairman. >> that senator shelby, are there any other members that wish to make a brief opening statement? thank you all. i want to remind my colleagues that the record will be open for the next seven days for opening

statement and any other material that you would like to submit w that, mr. cordray, you may proceed with your testimony. >> mr. chairman, and ranking member shelby and members of the committee, we want to thank you for this opportunity to present the first semiannual report of the consumer financial protection bureau detailing the bureau's work in its first six months. before i became director, i promised members of congress in both chambers and on both sides of the aisle, including a number of you that i would be accountable to you. i stand by that commitment today. i'm pleased to be here to tell you about our work and to answer your questions. the people who work at the consumer bureau are always happy to discuss our work with congress, this is the 13th time

that we have testified before the house or senate and and we look forward to working closely with you. with the hundreds of millions american consumers. i'm honored to serve as the fir director bureau, i'm inspired by the talented people that work at the bureau and i'm driven by the responsibility to protect american consumers. our mission is of critical importance to making life better for americans. consumer finance is a big part of all of our lives. mortgages allow people to buy a home and spread the payments over many years. student loans give young people with talent and ambition, the opportunity to get an education. credit cards give us immediate and convenient access to money when we need it. these products enable people to achieve their dreams as we have seen in recent years they can create dangers and pit falls if they are misused or not properly

understood. during my years in state and local government i became deeply involved this financial issues. i saw people struggling with debt they could not afford. sometimes this was bad stigzdecs that they regretted and other times i saw businesses that obscured the terms of loans or engaged in out right fraud causing substantial harm to unsuspecting consumers even ruining their lives and devastating their communities. i'm certain that each of you hear every day from your friends and neighbors and constituents that have these stories to tell. these people do not want or expect any special favors, they just ask for a fair shake in a system for financial finance that works for consumers and a chance to get back on track

toward the american dream. one of our primary objectives is to make sure the costs and risks of financial products are made clo clear. people can make their own decisions and nobody can or should do that for them. but it's responsible way for the businesses to be up front with their customers, that is good for honest businesses and for our economy. a quote caught my eye, it goes, free men engaged in free enterprise build better nations with more and better goods and services, higher wages and higher standards of living for more people. but free enterprise is not a hunting license. that was governor ronald reagan in 1970. i agree with what he said and it's widely shared by those that work with me at the consumer bureau. so we will make sure that the

necessary oversight is provided to make sure there's a fair and open marketplace. we will be going on site to look at the books and with the director now in place, we have the ae ability to make sure it's true across all financial products and services. the consumer bureau will make clear that there's conquestiose to violating the law. we plan to use all the tools available tos us to ensure that everyone p resperespects andl f the rules of the road. when necessary, we will not hesitate to use enforcement actions to right a wrong. as we move forward with our work, we need to hear directly from the consumers that we protect and the businesses who serve them. we do that on our website, consumer finance.gov where

consumers and businesses are all able to tell us their stories and we make a point to get out of washington and hear from are people first hand. we have held town hall meetings and a field hearing in birmingham. we are hearing from thousands of americans what works and what doesn't. we are listen closely and we hope that you will join us at these events. accomplishing our mission will take time, but we are already taking steps to improve the lives of consumers. thank you, i look forward to your questions. >> thank you, very much for your testimony. as we begin questions i'll ask the clerk to put five minutes on the clock for each member and hopefully we will have two rounds. as director, you'll be expected to be in independent, exercise independent judgment and act independently from the white

house and treasury department, are you prepared to work independently and use your own judgment? >> mr. chairman, yes, i am and yes we are. we understand that our role under the law is to be an independent federal agency and our job is to carry out the laws that congress has enacted and protect consumers in the marketplace. we will stand with public officials from both parties. >> you have talked about reducing the regulatory burden on small community banks and credit unions, how will you ensure the right balance is struck between protections for consumers and regulation for small institutions in the consumer bureaus rural areas whampt other actions can the agency take to minimize the impact of regulations on these

institutions without sacrificing protections for consumers? >> thank you for raising that issue, mr. chairman, many of the members have raised that with us. first of all, i have made a promise openly at this committee hearing when i was up on my nomination that we would work to reduce the burdens on community banks and credit unions who i firmly believe and i have said before and will continue to say had very little to do, nothing really to do with bringing on the financial crisis. and have a traditional model of doing business that is customer service oriented, is community oriented and is the kind of model that we want to encourage in this marketplace. i've old the community banks that i'll create a special advise committee that will raise their concerns with us and