so i can give you my own view of it. >> okay. >> and i will. i think that consumers have a responsibility to make their own decisions and to be responsible and accountable for their own decisions. they're the ones who have to live with those decisions. but i do think there is much that we can do as a bureau and as a country to make sure that consumers are better informed about the choices that they may be making, and we have a responsibility to try to make those choices more accessible to consumers so that they're not coop fused by back-end pricing, by dents, fine print that doesn't specify terms very clearly, and that sometimes fosters and takes advantage of that customer confusion. >> so you're admitting that there is some personal responsibility involved when people make financial decisions and that there are certain consequences to those decisions, correct? >> i would acknowledge that, absolutely. yes.

>> and do you or the consumer financial protection board, do you all ever recommend products or push a certain product for somebody, such as a 30-year loan versus an a.r.m.? do you promote those types of things, or is that a personal decision? >> i don't think that as a bureau it is our role to promote or hock particular products. that's not what we're doing. but it is our role to enforce and to implement the law. congress has made some judgments here about some of the exotic mortgage products, for example, that led to the mortgage crisis, the financial meltdown, the credit crunch that destroyed many businesses in this country and cost a lot of people jobs and homes. we will implement those decisions to the extent we have

judgments to make. we'll try to make them very carefully in this realm. >> but you're not trying to go to a plain vanilla or everybody gets the same thing type loans? >> i don't think we're trying to mandate products for individuals. i think if people are presented with an array of choices that are responsible choices that are clearly explained, then ultimately they have to make their own decisions. i would agree with you, i think on that. >> do you think it enters into the fact that i think your report was disappointing, to say the least. do you think that has anything to do with there not being -- that you don't have any ac is concerned? >> i think we have more accountability to congress on funding than any of the other banking agencies because all of them are independent of the appropriation process. and i don't hear any strong move

here to put them under the appropriation process. the occ, it's been around 100 years. the federal reserve has been around 100 years. in fact, we have a statutory cap on our budget, which none of the rest of them have. we're subject to multiple audits and testimonies in oversight by congress. i welcome your active oversight. i'm always pleased to come up here about the work we're doing and hear from you about your concerns. if there is anything you were disappointed about in our semiannual report, as you just indicated, i'm happy to have my staff work with yours to help us understand how you would like to see us do better because we want to improve as we go. >> the gentleman's time is expired. mr. duffy? >> thank you, mam mr. cordray, just to be i was in here for a pretty decent part of theof it. it's fair to say that the rules that com ocfpb that apply to big banks will also apply to smaller banks as well,

but just implemented by a different regulator? is that fair to say? >> they will apply to all banks, and that's one of the reasons why have i said that we should consider carefully whether they perhaps should apply in a different way to smaller banks that don't have an army of compliance officers and may have different simpler processes and cannot afford to bear some of the same transitional and other concerns. >> yes. >> i have a lot of small community banks in my district. the way it seems today is the rules are still going to apply to them, and they don't have the resources to hire new compliance officers and new attorneys. even though you may not be enforcing them, someone else will be enforcing those rules on them. it's also fair to say that we could have a consumer that is seeking out a certain product, and you could deem the product

fair, but it could also be deemed abusive as well. is that correct? it could be fair but also abusive? >> yeah. we were having this discussion earlier. congress used three terms in that passage -- unfair, deceptive and abusive acts or practices, which seems to be an indication that congress believed and it defined the terms to some degree that each of them is distinct, although there may be some overlap among them. >> and in regard to the term abusive, was it your testimony that you believe that the definition as set out by congress is sufficient and there is no further definition that needs to be made by the cfpb? >> it was my testimony that sometimes people have referred to the defined term. in fact, it is defined and was defined very explicitly by congress. our role as an independent federal agency is to enforce and implement the law that congress has enacted. so that's the term. that's the way they have defined

it. our job is to try to apply that to specific facts and circumstances. if the congress at some point is going to rewrite that law, we will implement whatever law congress writes. >> and so to look at the phrase abusive, the term abusive, it does give, if you want to call it a definition, or it lays out some guidelines for what abusive is. at one point it says it takes unreasonable advantage of. do you have what unreasonable advantage means? do you have a definition of what unreasonable advantage means and how would that be implemented? how if you're a small bank in wisconsin would you go the cfpb is going to be looking at us taking on unreasonable advantage. >> i think the term unreasonable is a common term in the law. it's a common term in tort law. the reasonable man is the test that courts have used for centuries to try to define behavior. and it becomes more carefully defined over time.

i think that if banks are in a position where they fear they may be deemed to be taking unreasonable advantage of their customers, we had the example earlier of peddling an exotic mortgage product to an elderly widow, it's probably something where the bank should take a slightly different approach than if they're peddling it to a more sophisticated consumer. >> and so you would agree, though, that it's a subjective standard? there is no bright line standard on how this can be implemented for the phrase abusive. it is subjective to the director or to your staff on what that means. >> i don't think that's -- i wouldn't agree with that characterization. i think it's a facts and circumstances test. i think that most good businesses know it when they see it. they know when they're walking the line, and they know when they're far beyond the line. they also can communicate with us to give more guidance as we go. >> but humans view facts

differently. if there is no bright line test, what you might find abusive, someone else may not find abusive. what is abusive in alabama may not be abusive in wisconsin. isn't that fair to say? >> i think it is -- i think it is the case that what is abusive and takes unreasonable damage can differ from circumstance to circumstance. >> and i only have 30 seconds left. i want to have you talk to me about this. also when we talk about a nonreasonable standard, it talks about a lack of understanding on the part of the consumer of the material risk, cost, or conditions of the product or service. and you had referenced in our case law, will reference a reasonable man. what would a reasonable person know or should know when engaged into that agreement. but this standard isn't the reasonable person. this is the individual standard. so you're a small banker in wisconsin and you have one person come in, and the standard that you use with them may not be abusive. but the next person that comes in, the same standard would be

used, but because of their background, because of their education, because of their experience, it could be abusive for the second customer that comes in. how do you comply with this law? >> i think good businesses do this all the time, sir. i think they think carefully about which customer they're dealing with. most of the community bankers i speak to and credit unions out to the fact that they know their customers, they know them well. they tailor their dealings with the customer to the situation of that customer. it's not one size fits all. i think that's part of their strength. i would also point out there is other prongs of that definition that are much more objective, such as taking unreasonable advantage of the fact that the consumer is not able to choose their provider. that's true of debt collectors and others. and in that setting, there is really nothing that is subjective at all about that. so the fact that some of this -- some of this definition, which congress has laid down, and we are required to implement may be firmer, and some of it may be

softer. i think it's not surprising. if you all decide at some point to rewrite this, we will implement whatever law you write. >> thank you. >> mr. stivers for five minutes. >> thank you, madam chairwoman. and i'd like to thank rich for being here. the problem with having such low seniority on the committee is i don't get a chance to tell all my friends and colleagues who have left that rich is one of my constituents. i've known him for years, and i have found him to be a great public servant who cares deeply about this country and tries to do the right thing, and he also listens. so i appreciate him coming to testify before us today. while some of us on this side of the aisle are unhappy about the process under which you were appointed, i do want to assure my colleagues on the record that the president picked someone who i think can carry out this job very well and do it in the right way, ensuring we try to protect consumers while still looking

out for the safety and soundness as well as competitiveness of our financial services industry. and i would hope -- i would urge you to continue to look out for both competitiveness and safety and soundness while you're protecting consumers, because they are interrelated. and if we put our financial services institutions out of business in the name of consumer protection, we haven't really protected anyone. so i appreciate you being here. and i did have a thought for the gentleman from california whose left who did compare pro forma sessions to cartoon sessions. and i'm just curious if the gentleman believes that the payroll tax cut that was passed during a pro forma session is a cartoon tax cut. i'm not sure if he does and he has left. i won't get my question answered today. i would like to turn to more serious business and talk to you about section 1100 g of dodd-frank, which requires you to put safeguards in place to ensure the new regulations don't

lead to further reduction in the availability or affordability of credit for small businesses and consumers. and i'm just curious what kind of safeguards you're putting in place to make sure that that happens, because obviously we all believe in consumer protection. and i believe mr. royce from california talked about how he believes it should be integrated. i hope we can integrate it well. and i hope that you'll work with the other regulators to integrate consumer protection into everything. but i do want to make sure that we keep affordable available credit for our small business and consumers. >> thank you, congressman. first of all, to go back to a point you made a moment ago, which i very much agree with. it does not help protect consumers if we undermine the safety and soundness of the financial system. consumers depend on the availability of credit to be able to do things like buy homes, to access education, to be able to manage and control their spending. and if the system does not --

does not provide those opportunities to people, then their lives are stultified as a result. and i also very much agree that having a competitive, vibrant financial sector is good for consumers for all those same reasons. lots of availability choice and the like. so one of the things that we'll try to be very mindful of, and as you point out, our governing law, which is the only thing that gives us the authority to do anything does tell us that access to credit is one of the chief objectives that we're supposed to serve. we will try to be mindful of that as we go about our different tasks. one of the tasks i talked a little bit about today is this ability to repay rule in the mortgage market, and there are other mortgage rules that we're required to develop. in the end, we want a mortgage market where credit is availability to people, that they can -- you know, in a reasonable way. in the lead-up to the financial crisis, the mortgage market was a market in which credit was available on some of the most

bizarre terms. non-underwritten loans that paid no attention to people's income, to their ability to repay, to their assets and lots of falsification. it was a very broken market. and one of the things we need to keep in mind is as a result of that, we had the credit crunch, which has hurt small businesses. >> i only have a minute left. >> i'm sorry. >> if you could give me the answer to what you're doing to safeguard affordability and availability in writing, that would be great. >> that's fine. >> and i want to mention one other thing. the bureau is working on a two-page prototype credit card agreement is my understanding. and i understand that the printed portion in the contract with definitions comes in at about 400 -- i'm sorry, 4,431 words. and that doesn't include definitional terms that are housed on other pages. so we're talking about a two-page agreement, a one-page summary, and somewhere between

two to seven pages of definitions with other untold information tacked on too. and i'm just curious. you know, if the goal is to make sure that people understand and read these contracts, why we aren't building on the one-page agreement summary that is now available under the truth in lending act rather than developing a government-designed contract. >> so we're -- it's a good question, and it's one that we're trying to carefully consider. we're not at this point trying to operate in this area by putting out a dictate or a single rule that everybody has to follow. we've come out with a prototype agreement. several institutions have been interested in piloting that agreement. we're seeing lots of other institutions come out with their own shorter agreements. i think what we're all moving toward, and there seems to be a lot of interest in the industry in this too, is a shorter summary agreement that people can read and understand that pulls out the key points. and then there is lots of other information that may be -- may be it would be good for them to have. maybe it protects the

institution against liability that maybe could be presented on the internet. it's available if they want to go and look at it there. they could be referenced to it. but it doesn't necessarily have to pollute the short clear agreement in ways that cause customers not to read anything, which is what we have seen a lot of. so i think that's what we're working toward. and a lot of institutions are working toward that. and i think we'll end up with some pretty good consensus around this. >> i yield back my nonexistent time. >> the gentleman's time as expired. it's just the two of us. you said you would stay until 2:00. that's you and me for another hour. that is a joke. anyway, the chair notes for some members may have additional questions. i think mr. sherman mentioned he was going to have some for this panel which they may wish to submit in writing. the hearing record will remain open for 30 days for members to submit written questions and to submit responses into the record. i would like to thank you for your patience.

i know it's been kind of a herky-jerky day. i appreciate your honesty and response. >> better appreciation for all the schedules you have to keep. >> with that, the hearing is adjourned. tomorrow on "washington journal," michael green, former member of the national security council talks about south korean security and a possible satellite launch by north korea. "new york times" assistant business and financial editor gretchen morgenson. and thomas mesenbourg and connie potter from the national archives and records administration discuss the first ever release of records and

surveys from the 1940 u.s. census after the expiration of a 72-year confidentiality clause. "washington journal" live at 7:00 a.m. eastern on c-span. follow c-span's local content vehicles throughout the weekend as book tv and american history tv explore the history and literary culture of little rock, arkansas. saturday starting at noon eastern on book tv on c-span 2. author griffs stockily on the little known riots and killing of at least 20 african-american share croppers. >> you had calls going all up and down the mississippi delta and saying that blacks were now in revolt. and the next morning, between 600 and a thousand men, white men pour in to phillips county to begin shooting down blacks. >> and on american history tv on

c-span 3, sunday at 5:00 p.m., former student bruce lindsey on integration and north little rock high school. >> as if they know what's going to happen. but we don't know what is going to happen. we don't realize what's going to happen when we get up those steps. but they seem to because the crowd is with us now. the momentum is behind us, and they are pushing us up the steps. >> these stories and others from c-span's local content vehicles in little rock, this weekend on c-span 2 and 3. ronald reagan was leaving this hotel after delivering a speech to the afl-cio. comes out, can't believe he is this close, 15 feet from the president. the agents are surrounding him. he shoots, the first hits jim brady in the head. he falls down. the second hits delahanty, a d.c. police officer who had turned around to check on the president's progress. he gets hit in the back, falls down, screams, i'm hit. now the path to the president is clear. it is wide open.

hinckley has an effective range of 15 to 20 feet. he hit stationary targets 20 to 30 march 30th, 1981, would-be assassin john hinckley fires six shots. this weekend on "american article fakts quoet rawhide down author dell quinton wilbur on the race to save the president. sunday on american history tv this weekend on c-span three. earlier this month the house committee gave the federal government a c-minus for its ability to track information about freedom of information act requests. the report was released as american university law school held this event on transparency and openness in government. it's an hour 20 minutes. >> -- but c-span viewers. and what i'm going to do in the interest of time is just very quickly introduce our moderator and he will in turn go on from

there. and maybe i need to say beyond what's in the bio notes that you all have available to you here and that will be posted online as with the is that tom sussman was the first recipient of the foye legend award four years ago. and that should say enough right there. tom, thank you very much. >> thank you, dan. that's a miracle, isn't it? has anyone ever heard such a short introduction by dan? i love it. this is great. this is great. i'm proud of that. we bring you this panel i guess it's been for a few years running now, to take a look at what's going on in some would say the most important forum in washington for developments in freedom of information and transparency. but certainly the driving force of what happens in the agencies

and the courts. and i especially want to welcome a new panelist today. we have -- and i'll start with the introduction with tegan who's second from the right. tegan millspa. the information's in the bio. i don't need to go through that detail other than to say she's a research analyst for the house majority committee for oversight and government reform and her experience was in judicial watch as a foya program manager. she's had user side experience in freedom of information. but the reason i start with her is because i get to induct her into the staff hall of fame because the other four of us have all had experiences on the congressional staffs developing and overseeing enactment of freedom of information legislation. and i emphasize that because earlier today there was a discussion of an important case

by judge beryl howe, another one of our club members, texas solicitor general jim howe was another one of our club members. john podesta, former chief of staff to the president. judge randall rader, chief judge of the court of claims. it's a very distinguished group who served on house and senate staffs and saw freedom of information legislation through to enactment. so welcome to you and we hope you have that same experience, don't we? to my immediate right, lidia grigsby is certainly familiar to all of us as having been cornersto cornerstone, mainstay. i could use any number of metaphors for her unwavering, energetic commitment to open government, freedom of information, as counsel to the senate judiciary committee.

she has been involved in all of the major pieces of legislation that have gone through the committee relating to freedom of information in a decade almost. just about. but rather -- in addition to her be being quarterback and really having been responsible for those freedom of information act touchdowns, she also haseen one of the great defensive linemen. that is to say, also playing an amazingly important role in trying to prevent -- it's like what i would call b-3 whack-a-mole, trying to prevent the many other committees of the congress from sneaking through amendments that would undermine the freedom of information act. to her right matt johnson. matthew is counsel to senator cornyn for the senate jewishi

committee activities. and in addition to his work also in this area i would say that he finds himself in a unique role. senator cornyn, as most of you know, leads the senate republican campaign committee. which is next to the minority league one of the most political jobs in the senate. and yet, in the era of freedom of information, senator cornyn and senator leahy have worked collaboratively, cooperatively hand in hand. matt and lidia have worked on many of these issues. and provides for all of us a model of what the kind of cooperation can and should be in the u.s. senate. and we're glad to have you both sitting next to each other here today. chris deboyd, who also returns here, she is with the minority

staff of the house government oversight and reform committee. and she also has had experience with the freedom of information reform legislation during the last years. and she shares with other panelists, also having had a stint on the senate side for senator max cleland. so it's a heavyweight group from the standpoint of experience and authority when it comes to freedom of information legislation. and i told them that in terms of the issues, the title of the program says it all. what we want to know today is the legislative outlook, what has happened, and what is going to happen in terms of the freedom of information and access to information activities on the hill. so lidia, we'll start with you.

>> it's been a fantastic week. there have been a number of wonderful events around the city and around the country. and i'm glad to be at this event, one of my favorite sunshine week events, each year. senator leahy once said press releases tell us when federal agencies do something right, but foia lets us know when they do not. and it's that open and transparent government that has driven the work of chairman leahy on the senate judiciary committee for really three decades. he has long been a champion of open government and has worked for many years as tom described earlier across the aisle and across both chambers of congress to make sure that foia remains a viable tool for americans to

learn about what their government is doing. this year is no exception. we've had a very busy year on the committee and i'm happy to share a few highlights of some of the things we've done in the last year to reinvigorate foia and also in other areas to ensure we have an open sxktable government. on the legislator front the faster foia act which i believe i've talked to many of you before, the most recent bill that senator leahy and senator cornyn have partnered together with. this is a partnership, again, that goes back many years. and it's been very fruitful over the years. and we are again working together to further reinvigorate foia through establishing a commission to study some of the problems and challenges that foia still has. many of them i'm sure have been discussed in other panels today. that legislation has twice passed the senate unanimously, which is great. again, showing the bipartisan interest and support for open government. and of course we are hopeful that congress will enact that this congress.

we've also been very busy as tom mentioned also with the whack-a-mole approach in terms of dealing particularly with a number of legislative exemptions to foia popping up pay couple of years ago senator leahy and senator cornyn partnered on another bill that helped shed light on these exemptions. for those of you familiar with legislative work you know that provisions get snuck into bills that have nothing to do with what the particular provision is about and sometimes it's very challenging to find out that they're had in there much less what they actually do. and that has been the case for many years with respect to new exemptions to foia. through the efforts of senator leahy and senator cornyn we've been able to kind of make that process a little more transparent and as a result i've been much busier in the last couple years trying to address some of the exemptions that we've found in legislation. most recently following the miller decision, which i think you all heard about today, there was a new exemption regarding critical infrastructure in the defense