agencies that function mostly out of washington, d.c. that don't have a lot of champions across the country, in the hearts of the american citizen. so as we're making tough cuts, how would we justify not making deeper cuts in the ftc and how do we justify some of the expenses and where can we make additional reductions? >> so one thing that your question seems to acknowledge is that not all agencies are the same there are a number of -- as you go through looking at different agencies, in our case, in fy 2011, we had an operating budget of $276 million and we returned to $258 million in

regress and fines and fees. now let me just take a few of the other issues. one is the miami office. so we will not do this, and i don't think we -- we could do it without programming from -- but as mr. diaz bellard pointed out, there are a number of actually the miami the miami area, south florida, among metropolitan statistical areas has the highest incident of identity theft in the country. south florida has quadrupled in size in the last three years. the majority of the commission, if we put a small office, again, from reworking -- from current resources, into south florida, we can really help south florida

and there's a terrific spanish language work there. with the number of fta's, it's important to point out and i can understand why it's confusing. we are a tiny, you're going to see some big agencies as you go through agencies. we're a tiny agency by washington standards. the number of fts is 1175. so we're only asking for ten additional ftes. and if there's one thing that had to go first, although i would hate for it to happen. this technology is how we keep up with the bad guys and how we do our mergers and our anti-trust work. it's either 49 or 59 is back filling. we have already back filled most

of those, i think we're operating at about 1155 ftes out of 1176 right now. >> i think each of these projects is probably worthwhile, but not now, that's the problem. the problem is one of austerity. we are operating under -- in a period of real austerity at the present time. that said, can we handsome of this stuff off to the states? the chairman has for example talked about identity theft being a real problem in south florida, and i agree with that. but that is a quintessential theft, it's handled by state -- best handled by state and local authorities, with -- to be sure, a very large consumer education component from us. but we are not in a position to

handle this, what we are in position to do is to handle secured breaches. the cfpb, it's here. it's here, i lost that fight and so it's here. but we share jurisdiction now with the cfpb. i do not understand why we don't have a reduction in our ftes as a result of sharing jurisdiction with a sister agency which has taken 21 of our fte s away from us as it now stands. the chairman also mentioned during his remarks that we had contributed fees and fines which exceeded our budget request. >> slightly less, but yes.

>> the budget submission assumes before this committee, it assumes total offsetting collections of 136.5 million in fees but do not call fees. but i'm concerned that the agency will never be able to collect those fees. the fact of the matter is that the actual collection of fees has varied widely and the ftc has only met its estimate of hsr fee once during the last ten years. i question the futility of providing an estimate of offsetting fees to this committee. >> and if i could just respond. let me just make a couple of points. in first of all, i have the

greatest respect for rich corduroy, i think they're going to do very good work and down the road in a few years, i could agree with commissioner rush whole heartedly, i don't disagree with him much now. but the actions he's taking is while there are concerns raised about it and people who would like to undo it are -- you know, should not be used as a justification for us to sort of seize the field. we have brought 90 cases involved debt consolidation and foreclosure rescue scams and work at home scams. and we do really good work. and by the way, we have had to send people down to south florida and have them deputized as assistant u.s. attorneys to prosecute cases. so i think over time you may

want to -- and we may want to move people out of predatory or financial fraud, but i think at this point, when as you have pointed out, people are still suffering, it's not precisely the time to do that. now having said, having said that, again, we understand the need for austerity, we understand the need for agencies to tighten their belts and we also understand that we use this committee that's going to determine our budget. so if you end up keeping us -- if you end up not giving us all of our requests, and by the way, commissioner rust was part of it. i started late -- at a time where the economy was growing, we were both for growing our agencies, which is considerably smaller than it was in 1979 when the population of the united states was 200 million, not 300

million. so i have a great respect for his principal position. but i also think that given our effectiveness as an agency and given the number of obligations that congress has placed on us, really, especially, especially if we go sequestration, we're not goi the things for all of your consumers and the consumers that we try to help that we're trying to. so -- >> if i might do a quick follow-up. >> sure. >> as we make reductions we have to prioritize things. has the agency gone through and prioritized these regulatory functions that are of critical nature versus those that may be more of a want as opposed to a need? i just know that the ftc's

interagency group on this regulation of advertising on cereal and peanut butter, i don't know what the ftc has actually engaged in that endeavor, but things like that may not be of the critical nature that maybe some of the other functions that you're discussing. so has the agency gone through and said, look, some of these things we would do in a moment of plush resources, but the committee of financial services telling us to find the lowest 10%? can you identify what those are? >> that's a really great question. i'm hoping not to have to talk about this too much. that interagency group working report was mandated by the senate appropriations committee. it was sam brownback and tom harkin. and you know, obviously we're keenly aware of the new language the appropriations committee has given us in our 2012

appropriations. from the perspective of the commission, it's probably time to move on to other areas that would not be a priority. but food marketing to kids is a priority. and childhood obesity is a priority. but that particular initiative, it's probably time to move on. now under bill cossack who was the chairman before me and served with commissioner rush and myself, he started an initiative called ftc at 100. we went out to all of our stake holder holders, looked internally, and it is something that we -- it was a really good study that i go back and look at from time to time that talks about what our priorities ought to be. and what our priorities ought to be, depending on different types of growth, and we're going to

have little or no growth or possibly a decline in our workforce going forward. hopefully not a decline in our workforce going forward. so we try to do that. i don't want to throw another agency under a bus. but i was on a panel with a commissioner from another agency and someone asked me that question, it was at a luncheon and someone in the audience asked me the question, well, do you ever take a look at your agency to see what you need to do going forward in five or ten years? i basically answer ftc to 500. and one of the commissioners whispered to me, i wish we would go that. we're not perfect, but an examination by your outside stake holders, can a good thing to do. >> i don't think so. and this is an area where i disagree with the chairman. you know, he has mentioned to

you that we used to have, i don't know, 1750 -- close to 1,800 ftes back in the 70s. and today, we have 1,200. you know, frankly, i think that every law firm in the united states has seen a particular contraction of its support staff and the answer can be summed up in one word, computers. that is exactly what has happened. and yet we have not contracted accordingably. i think there's more that we can do in templg of support staff.

>> clearly computerization is a reason whooo! for why government has downsized and can down side. and nen congress by the way has been very good about growing our agency when we can do it, is entirely about computerization. but i certainly understand. >> i appreciate your comments, i might just close my thoughts by saying, certainly the agency has large scope, the commission news over what's going to be on its plate. you make those decisions, so it might be helpful for myself at least to see as budgets were to shrink, where you would choose to prioritize and sometimes agencies choose to prioritize agencies that would get the most attention. it would cause us the most strain, but what you actually see as the lowest priority,

versus the high rest priority, that we only had to do one thing, if we had to do two things, that would be it. that would be useful as we go forward with how to best spend our money. >> i think as our agency, again, aga generally we try to look at things that are the greatest good for the greatest number of people. because we do have fine night resources. >> thank you madam chair. >> thank you for being patient. >> good to be back. good to see you. >> let me first thank you for this hearing and thank both of you for being here today and for your service and just say how important i think today is because we're marking consumer protection week annsers need mo now than ever. and the ftc, this is so important in terms of consumer

protection. i want to ask you a couple of questions in terms of deception and unfair practices as we see it in the predatory lending and discrimination in lending as deceptive or fraudulent loan servicing, i know you don't have jurisdiction over banks and thrifts, but you do have jurisdiction over nonbank mortgage companies, mortgage brokers and other nonbanking finance companies, that's this sector that has really had some of the worst actors in the subprime mortgage prices and many of them were guilty of discrimination and illegal steering of minority borrowers predatory is subprime loans. most of those companies have collapsed, thank goodness. but they were replaced by the firms that ufr to rescue the --

communities like, i'll give you an example, in my district in east oakland, they were targeted, entire communities by misleading advertising, unfair and predatory loans and discriminatory lending and these were based on race and ethnicity. now they're falling prey to scams that are promising to save their homes and lower their mortgage payments so there's many scams that are going on. so your agency is as busy as ever. but you have some help along the way, but you have mentioned and we all recognize it's going to take a couple of years for the consumer financial protection bureau to be fully operational. so in the meantime, let me find out what you all are doing on these mortgage rescue scams, do youave yoateris that a bilingual d they

effectgete hitx mino ód ke t ka %s yacg. voing snish language br borrowers in california who are maybe a little t moreir -- that ane have had oth cases in now, ae reach out to legal services to community honest businesses who don't want to be the competitive disadvantage from the crooked ones to try to come up with more cases in the area, we'll be doing it. >> two things, well, three things first of all, congresswoman, lee. first of all, i happen to live in your district for a long time so i know what problems you're facing. >> thank you. >> that said, several things,

first of all, i think it is probably -- and you know this, we're not doing minorities any favors by getting them out of their houses into houses that they can't afford. we have discovered that in the compu care case whenever we brought that. and that was partially owned by the naacp as a matter of fact. we were aware of that at the time. and we told them that if people wereecau of fraud, we were going to clamp county on that and we did. we returned a lot of money to consumers as a result of that fraud. that said, i think probably the biggest problem that we have at the commission today is probably cheap consents.

what do i mean by cheap consents? first of all i don't think that anything is in the public interest if it's a consent agreement, consent settlement that doesn't return any money to consumers. and these are brought in to me all the time. people spend their money, as soon as they make it. so a lot of these scammers who are terrible people are consenting out and it's cheap. it's cheap for them to settle out. second, we have the same problem that the sec has, except in spades. because we do not, by and large, require people to admit liability. we just took a consent for example in which we did not

agree or we agreed to let these people deny liability. and i don't think that that's a good use of public funds at all. >> why is it that we don't require the admittance of liability? >> that, i don't know. >> is that a legal issue? the law prohibits that from -- >> a judge in new york has just brought the reikofp is his name, and he has to question the ftc as to whether they can legally have a consent that neither admits nor denies liability. now we have been taking those for years so i don't really have any problems with those. but i do have a problem with a consent that just simply denies that there is any liability at all. that's to me a cheap consent and

i will not go along with it and i have told people that i will not go along with it. >> let me just say, i absolutely agree with commissioner rush that we need to have more cases in which we get disgorgement or in which we get restitution for victims. but i would also say this, we are a little -- as i understand it, we're a little bit different than the sec in that we litigate lots of cases. in 2011, we brought a little over 100 cases. we're primarily an enforcement agency and a policy agency as well. but in 2012, we currently have something like -- in 2011, we currently have about half that number in litigation, roughly half. so we litigate a lot of cases,

we also settle a lot of cases. when we have settlements, is companies will say we don't want to admit liability. we don't deny ibliability. but it's important to shut down ongoing fraud. and sometimes, i can say not always, and hindsight is always 20/20. you can get better relief or just as good -- relief that's just as good. there are 5789 of people out there, so if we can get a pretty good consent that we think is the same as what we will get in court, we will do it. >> have you looked at rival rights statutes and say for example the targeting of spanish speaking homeowners, that to me,

and we're looking at other areas that could be a civil rights statute violation. >> one of the cases we brought was equal credit opportunity act. so, yes, sometimes we can use the civil rights acts as well.g? >> thank you, madam chair. it's sort of nice to go last every now and then. as we sit here on this panel and we look at the requests that are put before us, we realize the dire state that our nation is in. it troubles me a little bit that what's put before us is not going to save our nation in any way. it almost appears to be a def deferens to other agencies,

other departments, i think it needs to be addressed in totality by all agencies and departments. and so if you could help me a little bit with the history of cfpb and where that departure occurs and where that funding -- help me understand the timeline and how that tracks and where is that being picked up in your request here? and then i was really appreciative of the commissioner's comments about some things going back to the states. i think if there is ever an opportunity for this congress to evolve some parts of the federal government back to the interstates where they rightfully belong, this is a good opportunity. with the deficit as high as it is, with four contesecutive yea, we just heard on this panel that you could do better if you had

more. but there is no more. your comments a minute ago commissioner, that it could go back to the states and thirdly the gao produced the report about duplicative programs. are any of those that have -- that you can see that identified on your commission or are there some on another report that may come out that you could help us earlier and we don't haven't to wait for the report to come out. >> let me try. the situation as madam chairman is well aware of the cfpb has been documented. it was elizabeth warren's idea

initially, with the white house's blessing, i might add. and frankly, i listened to elizabeth warren up in new york once upon a time and my wife was sitting in the audience and i said, what did you think of what i said to her? and my wife said, never cross that woman's pathogen. ever. so that is as far as i was concerned. that said, i did write a letter to your counterparts on the financial services committee and i will not say that i got the cold shoulder, and i basically have said the same thing that you have said which is that we're lay yeering another layer

bureaucracy on top of the ftc. the question now is what we do do about it?