appreciate any input or thoughts you and your staff give as we go forward. >> we'll continue the dialogue on that. thank you. i want to echo concerns that have been raised already today about the issue of financial literacy. i applaud your efforts. senator akaka mentioned it, too. i too was very -- have been concerned about the lack of financial literacy being taught to our students. when i was in the north carolina senate, i also required students get that -- i think it's just a sound basis that you need to get by in the world today. have you to understand debt. and with that, i was also pleased they released examination for payday lenders. it appears there are a handful of banks making high cost payday loans directly to their customers. the center for responsible lending say they are marketed for short term but keep customers in debt for an average

of 175 days a year. which is an average of 16 payday loans per year. and i understand the rate is somewhere over 300%. can you tell us the use of payday loans? >> yes, senator. and as i mentioned earlier, this was the subject of the first field hearing that the bureau conducted in alabama. recently. the examination procedures you mentioned, we have put out, they apply equally to nonbank payday lenders and also to banks that may be now offering a product that is similar to a payday loan in a number of respects, called a deposit advance or some nomenclature around that phrase. we will have the same issues and the same concerns about any of the products in this realm. there is a legitimate need and

we heard about it at our field hearing for short-term credit availability to people. whether they are banked and have bank accounts unbanked. also a variety of products that are offered. it includes pawn brokers, car title loans. lots of different products. some of which have real advantages, some have real disadvantages. one thing we'll be trying to do is assess those products and make judgments about whether they're in compliance with the law or not. but we also would like to see a robust competition in this realm. i mean, small dollar loans are needed by people in a different era and maybe in some places still now, they would go to loan sharks. it was dangerous as well as being difficult. nobody wants that. we to want have products be available. we want them to be products that help consumers and not harm consumers. there is i lot of thinking that some of the banking products may be able to be offered on more favorable terms because there may be less risk when they're dealing with their own known

customers but we'll see over time how that develops. >> do you have a time frame? >> i don't. >> all right. one other question. one practice i'm concerned about is the manipulation of the order in which checking account transactions are posted for overdraft purposes. consumers consistently state they don't want their transactions posted highest to lowest. is this the sort of practice the cfpb will be taking a look at? >> it is. >> okay. thank you, mr. chairman. >> they require certain levels of pulpit participation in the rule-making process. i'm pleased to continue to hear comments from stakeholders that the consumer bureau has gone beyond that. would you please describe the process that the bureau has found and how it improves your role-making. >> i'm sorry, mr. chairman, i

kind of lost the thread of your question as i was taking notes. >> depa requires certain levels of participation in the rule-making process. i'm pleased to continue to hear comments from stakeholders that consumer bureau has gone beyond that. >> there are certain requirements in the law how we go about rule-making. if includes a robust notice and comment process so we issue a proposed rule. then we get notice and comment. sometimes from -- depends on how many people are interested. sometimes a few dozen individuals, sometimes thousands or tens of thousands of individuals, as with our know

before you owe mortgage form consolidation project. we are required by law to sift through those comments, to weigh them, to evaluate them, to consider the pros and cons, to address them in our rule-making process and then to develop a final rule. some of the things we have tried to do, and again the know before you owe is the most outstanding example of this because mortgage markets are the most important market by dollar figures for consumers, is to aggressively go out and seek lots of comment, even before we proposed a rule. we're not required by law to do that but we knew it would help us do a better job if we were hearing from people before we even put out a proposed rule. we've done a lot of consumer testing. and there are apparent processes. not just your judgment about how things really are but how people respond in fact to these things

and to different term ninologie and the different form and the like. we're trying to continue to use technology so that our rules and our proposals and the issues that we're addressing are out there. we're going to encourage people to participate through our website and other means and we're going to be continuing to try to press the envelope for how we can use modern technology to encourage broader participation. therefore, broader perspectives, therefore, more insight on our rules. not just from consumers affected by the rules but from the industry participants who were affected in their prayings by our rules because it needs to work for both sides. and it's something that addition i think it's very interesting, the work done by the bureau and we hope it will continue to object the cutting edge. >> in response on to a question, they wrote the cfpb would provide robust safeguards for consumers and clearer guidance

for financial service proi providers without imposing undue burdens. do you take a regulatory approach while protecting consumers? >> mr. xharm, chairman, we are required by law, and not just by the apa, but specifically in our law, to skr consider the burdens, costs and impacts of any rule we're developing. we take that seriously, not only because it's the law but because it's good public policy. we intend to and that's why i'm setting up some advisory panels to hear broadly from the financial industry about how our proposals may affect them and how they may actually work in practice. at the same time we're hearing from consumers and groups from across the country about what benefit it might bring to the

consumer public. as i mentioned, we've inherited a lot of rules we didn't write. we have the opportunity to go back and think afresh about them. and there may be occasions where we can streamline those rules, losing no benefit to consumers and reducing the burdens on financial providers. we hope and expect to be able to do that. >> senator sheldon? >> thank you. mr. cordray, i'll try to move on. you've been very patient here today. i've got several questions. we've heard there is some concern that documents subject to the attorney/client privilege that are turned over to the bureau will not remain privileged. but under the current law, privileged documents remain privileged when they're given to the federal reserve board, the office of the comptroller of the currency and the fdic, which you serve as a member of the board. the drafters of dodd/frank did not include the bureau in this law, which is troubling.

would you support an amendment with the same privilege protection for documents to the bureau currently given to other banking regulators? if not, why not? >> yes, we would support an amendment to correct what we believe was an oversight. i have told the banking trade associations that. we're happy to work with them and you to get that fixed. >> thank you. senator moran, brought up abuse s abusive, the definition of the word abusive and so forth. leading up to discussions in dodd/frank it's clear some people wanted to ban some nonbank products and services. are there any particular products that exist now that you would ban or is this too early? is it possible for an identical product to be abusive for one consumer and not for another?

is that possible? how would you make that determination? if you saw that? >> so, let me try to address both those questions. first, i don't think in terms of banning products. and that's not how the statute speaks tore it for us. it talks about us addressing unfair, deceptive and abusive acts or practices, which i think is maybe a better way to look at it. in terms of whether -- >> you don't think you'll be in the business of trying to ban products, but to make things stronger and more transparent and so forth for the consumer? >> that's the approach and the vantage point i take on it, senator, yes. right. >> okay. basel, by virtue of your position on the fdic board of directors, you will have to make some important decisions about the basel capital regime. basel 3 and dodd/frank act eliminate tier one for trust

preferred securities while dodd/frank provides a measure for trust securities for small banks with assets less than $15 billion, basel 3 has no such exception. because many small banks have trusts preferred securities, this issue will impact banks and their communities throughout the country. how do you plan to resolve the diversion for small banks taken by dodd/frank, basel 3, have you gotten into that yet and would you give your views on basel 3, whether it prevents another economic crisis and prevents banks from being undercapitalized? you know, the whole thrust is for banks to have more capital, which makes sense to me, and also to have liquidity, which makes a heck of a lot of sense. >> yep. i do think that the recapitalization of the banks and the provisions that we've made domestically here in the

united states, as well as what basil is trying to trying to accomplish is helpful to the american system. american banks have more capital they're keeping on hand than european banks by comparison, for example. >> perhaps not enough, huh? >> well, that's -- that's a hard thing to measure in the ab instruct. people are working on it. i'm now a member, as you said, of the fdic board. have i great colleagues on that board. they've been working with me to get up to speed on these issues. i happen to be fortunate because the deputy director of the bureau, who's been up here to testify, is a banking expert. and both investment banking and commercial banking and he's working with me on these issues, so we will -- we will address them as they come. but these are fascinating and important issues, not just to this country but to the world. importantish ushs not just to this country but to the world and we want to make sure that our banking system is strong. i know you want, that we want that as well money. >> mr. cordray, do you know of

any financial institutions that you can recall that have been well capitalized, well managed, well regulated and has failed? >> i think that only happens, senator, when there is some extreme dislocation at large. >> that would be very unusual, would it not? >> i would say the great depression and the recession of '07/'08. that may have happened to some banks that did not deserve. t. >> "the washington post" reported a community groups to subsidize mortgages for first time hold buyers resulted in mortgages that many buyers could not afford. i know they meant well but the article nound found that nearly one in five borrowersin the d.c.

program are behind in their mortgages. are you looking into this particular program? because i'm not saying it's a busive but maybe it lack of, i don't know how you define all that but lack of judgment because you want to help people but sometimes if one out of five failing they've got to be reviewed. is that part of your deal or is that not in your purview? >> that's the first time the program you mentioned has come to our attention. it may be a local d.c. program. we had a lot of problems in the mortgage market in the last decade. we had a lot of practices that in retrospect weren't very sustainable, even though, as you say, many were well intentioned, though some of the practices were not well intentioned and were just fraud and greed.

we need to be careful about what we're doing. the congress is now requiring us to do a number of things to clean up practices in the mortgage market. we take that role very seriously and we will continue to be glad to have your input and counsel as we do that work and as you're hearing from your constituents, we're often hearing from many of the same people but that helps us with our perspective. >> thank you. >> i would like for the record that senator reed of rhode island would have been with us today but he is away at a funeral. mr. cordray, i thiank you for your testimony today and for your willingness to serve our nation. regardless of whether one agrees with the present decision to recess a point richard cordray, the fact of that matter is he is now director of the cfpb. his time for us all to put politics aside and work together

to protect american consumers and have a strong and fair consumer marketplace. this hearing is adjourned.

coming up, a senate hearing on u.s. defense production. and two fcc commercialers talk about the national broad brand plan and the allocation of broad band spectrum. douglas elmendorf testifies about the economy and the federal budget. a cbo report released on tuesday

repredicts a $1.1 trillion budget deficit this fiscal. we'll have live coverage of his temperature beginning at 10:00 a.m. eastern here on c-span3. >> we as explorers of literature, we as readers of literature have a responsibility. for those of you who are discovering the creation of literature, you have a responsibility, do you not? can you create anything you want in the world that you create in literature reflecting history or not and feel comfortable in that creation or must you presensor yourself? >> this weekend from lectures in history, professor william foster on the n word's place in american literature and culture saturday night at 8:00 eastern? alsoon american history tv, he changed the reading habit for american. a look at the influence of time incorporated founder henry luce publisher of "time" o, "fortune"

and "life" magazine. >> and the oil boom hits and makes texas a leading oil state. visit the streets of beaumont, texas. this weekend on c-span3. regulators and energy industry executives at the senate hearing said the u.s. oil and gas industry is in the midst of a major revival. the energy information administration estimates that domestic crude oil production will increase by more than 20% in the next decade. the eia released its 2012 report last week. this hearing is an hour and 40 minutes. >> why don't we get started. the hear will go come to order. thank you all for being here. this is an oversight hearing on the u.s. and global energy market outlook for 2012. as many of you know, we often

start the year by holding a broad overview hearing such as this. obviously a lot health insurance happened since last year, since the last time we had an overview hear of this this time. many countries the middle east, north africa, the key oil producing reej oochb the world had popular uprisings resulting in new governments taking charge in what is now referred to as the arab spring of 011 as a result libya spent much of the year with oil exports near zero. with libyan export now almost totally restored or mostly restored, our focus on that reej oochb the world has new compl complexity because of the multi-lateral sanctions against

iran. which also is one of the largest oil exporting nations. though the u.s. has sanctioned iran since 19830. iran remains an important source of asian and european oil imports. so as europe now works to implement its own sanctions against iran, we can anticipate dislocation in crude oil flof as the world adjusts to this new situation. it serves as a reminder that oil markets and prices are an important factor in our economic security. that's why it's so important to fully understand the kebs between u.s. and global oil markets. the oil market outlet -- our oil

production is up, our production of alternative fuels is up by about the same amount. our reliance on imported petroleum is down. at the same time our cars and trucks are using that oil more efficiently than before. the united states has successfully reversed what seemed to be an inevitable trend of becoming ever more dependent on imported oil. so this is an accomplishment we can all be grateful for. however, it important to note that in part because of this enhanced security, we the united states are no longer the primary driver behind the world oil markets and prices. as our production has gone up in the past few years, oil prices have gone up as well. the u.s. became a net exporter of refined products in recent months, yet consumers are still

paying higher prices at the pump. that's why i hope we can use today's discussion to understand broad energy trends in the u.s. and around the world. my view is we need to understand not only how to make the u.s. less vulnerable to all disruptions but understand what events and ambassadors actually affect world oil prices. we have a panel of four expert witnesses today who can help us understand the interrelated markets for oil and for all of our energy sources. we'll start today's discussion with dr. howard gruspecht, the acting administrator of department of energy's energy administration and he will share the highlights of eia's latest short and long-term energy market fok forecast. this committee is a effie consumer of eia product. we always appreciate having eia

share its data and knowledge with us. president obama has nominated adam somins sk ky to become the next administrator of the eia. in the meantime we very much appreciate dr. gruens sp echt being here to present the iea's position. next we'll hear from ambassador jones, the deputy director of the international energy agency in paris. we look forward to discussing iea's forecast of total world energy supply and demand outlook through 2035. i also note that the iea was founded as a forum for responding to oil supply disruptions and still has an important role to play in that capacity. given the current geopolitical environment, we are especially grateful to be able to have

ambassador jones here today. we also are pleased to have with us two leading energy analysts both of whom have been before our committee on several other occasions. both mr. diwan and mr. burkehard can offer their own thoughts and insights on where the oil marks are headed. they each have considerable expertise in the geopolitics of oil. let me defer to senator murkowski for any opening statement she has. >> thank you, mr. chairman. i appreciate you convening this very important hearing. it's really a scene setting hearing for us here on the energy committee. in looking at the panel before us, i welcome you all back, recognize that this is a welcome back. we're almost on to ground hog's day here answered would suggest that this is not going to be a repeat of what we heard from last year. as the chairman has noted, there

has been a lot that has changed from the last time we convened. the conventional wisdom here is that this congress cannot accomplish any major energy legislation now that we are into -- full on into an election year. i think that that would be a disappointing finish for us, but it doesn't mean that the rest of the energy world is going to be grinding to a halt. decisions are still being made or perhaps not being made on a daily basis about where energy can be developed, who's going to buy it, how it will be transported and all of those decisions of course have consequences for jobs, for our economy and for the prices that we pay for our energy need. those of of you who have joined us will help us understand the major trends taking play placed in the u.s. and global energy poll spip whether we're talking about china taking steps toward proving up its shale gas resource, which by some

estimates is larger than our resources in the united states or where we were talking about the strait of horm use, we can all acknowledge they could have impact on the every day lives of americans. i'm interested whether there's a challenge to conventional wisdom today. when oil prices peaked back in 2008, we here in congress talked a lot about it but you didn't see much in terms of policy changes. we should take a lesson from that experience and recognize times of relative stakt are an tonight to recall what we said in times of crisis. it's times like now when we're able to have a more reasoned discussion that i believe we should seek to develop a coherent policy and then act on it. i'm particularly interested in whether the u.s. can holding together and truly see through this natural gas ref luce that's risen to the top of our energy discussion. technology developed here at home has allowed to us tap the abundant resources that we have and we're faced with some pretty

good problems actually. what to do with all the garks how to handle its rapidly expanding development in a sustainable way and how to keep growing in this space without self-desfrukting through the misguided regulatory or fiscal policy reactions. so for obvious reasons i'm going to be asking this morning where alaska fits into this picture, our very unique geographical position, our huge resource base is well placed to satisfy some of the export demand for u.s. gas. so i want to understand the context of this against the concerns that many others, including some on this panel have regarding the lower 48 assassinateos. i think it is appropriate and timing is everything but it's interesting to talk a little bit about what we know about this resource. the president in his state of the union address just last tuesday indicated that this country has potentially a hundred year supply of natural

gas. in your new estimates, the marcelis shale, which we previously thought had enough gas to meet the entire nation's demand for 17 years at current consumption rates has been revised downward to a six-year supply. so it seems like the numbers are all over the place. i think it speaks to -- it speaks to the fact that you've got changing technology, you have increased exploration that allows us to understand a little bit more about what we're looking at in terms of the reserves but it does go to the heart of what you all deal with and that is understanding the numbers, understanding what we're dealing with in terms of supply. a long time before the pred agreed for those of us calling for an energy policy, it became ef the u.s. does matter in terms of influences world energy trends and determining our own fate. if an emergency or disaster does