place and the aca but were not aware of free and unbias assistance being available. consumers appreciated that assistance. often times navigators were the only human face someone might encounter as they enrolled into the an insurance product. and finally the interaction could overcome the negative preconception. regarding health care, regarding the marketplace, and felt much more positive and engaged and felt they would go out and tell somebody about their interaction. so there were some challenges.

in all four states, there was some amount of difficulty with either the online portal or the oncall center. in the state-based, navigators had back-end access into the portals. and really make sure to assist a consumer all the way through enrollment. furthermore, they had direct contact and regular contact, sometimes daily, with the state exchange leadership. so they could get real-time results back. a federal portal and call center for states. it was a huge task. our primary lines of communication were through our grant officers and regional offices. the information had to kind of travel through different level

also to the folks working the call centers. the challenge, my colleagues also talked about is low health literacy, the complexity of choosing a health plan is the greatest challenge a navigator faces. both state-based exchanges and federal exchanges received some combination of training that was required. but felt committed our n navigators needed more. both in advance of open enrollment and continually through open enrollment, as well as an additional one-on-one training regarding complex cases such as immigration status and verifying household income. finally, the challenge was around privacy concern. seco has a history of maintaining standards.

we conducted site visits. we observed navigators one to one on their interactions with consumers. and had a very strict policy regarding service to consumers. we had some really great successes. similar to my colleague from florida, fast implementation. while maryland was an early implementer and we began the process in april, with the three other states, we had about 10 or 11 weeks. in georgia and tennessee, there were additional state requirements. in addition to the federal requirements that made that a little lengthier. but we did it and our partners were great and we are looking forward to doing it again next

year, this year. a really great success was our community relationships. we chose diverse partners. in our experience, word of mouth is the most effective outreach strategy. it quickly establishes trust to begin the enrollment process. from results from our research study, all states demonstrated effective outreach and enrollment to diverse populations. finally, i think our infrastructure was really successful. seco's model allowed for local flexibility to respond on the ground and at the same time national coordination allowed us to share our best practices in due course correction as needed. looking ahead, similar to what karen indicated, open enrollment is 50% shorter this year and only overlaps with four weeks of

the free tax preparation season. this is a really strategically strong opportunity to reach people. they come prepared with their financial information. and this will be the first year that folks will understand and face the tax implication of making a choice or not making a choice. however, we are -- we've just finished a strategic planning process with all four of our teams and we're working really hard to ensure we can take advantage of every day of the next open enrollment. renewal process will be the first in this open enrollment. there's some uncertainty in regards to the furnnctionality. but, in the end this is an opportunity to learn from last year. we also conducted this study and we look forward to disseminating that information publicly in september. thank you. >> great, thanks. jessica.

>> thank you. good afternoon. i'm jessica waltman. i'm here on behalf of the national association of health underwriters. nhu represents brokers from all around the united states. independence agents have been helping people get covered and stay covered both through private coverage programs and then also a wide range of public assista assistance progap grams for ove0 years. to also employer-based plans, fortune 100 companies. they own or they work for their own independent businesses, not the health insurance plans. using an agent doesn't cost a consumer any extra money. in fact, the law requires that consumers be charged the exact same amount, regardless of what assistance they use. instead of receiving grants, if

an agent enrolls someone in an exchange plan, his or her identifying number, which we call the national producer number, npn, should be regacord. the agents pay a small monthly pass-through fee that goes through the life of the policy by the health insurance carrier. so remember that because it's going to come up again. okay. again, health insurance agents have been around for decades. so they do know a lot of information about plans. like karen indicated previously, that might not be publicly available. you know, things like which plans have good cost controls. or i have asthma, which plan in the marketplace has the best management plan for thingses with asthma. things like that. and there are also helping with claims problems. there are business models that are a little different than sister models.

because they've been around a long time. their goal is to provide year-round service. they help you when your insurance card never shows up. when you need a authorization for a surgery. you get a wacky bill at some point during the year you don't understand. this next year, this coming up year, when you need to renew, they're there to help you make sure your health plan still fits your needs and enroll you again. and the good news is there is really no limitation from the law on how many different types of assistances that you use. agents and brokers can work in concert with other types. we do have some public policy suggestions, either regulatory or legislative, that could make this a little bit easier to facilitate those partnerships for consumers. i think it would also benefit the brokers and the other consumer and assistant groups in the year ahead. i'll get to those in a second. just to -- a little more background about agents and brokers.

because they have been around for so lock, they're very highly regulated. all kinds of state and federal privacy and data security laws apply to them. they may not apply necessarily to the other groups because they weren't around when those laws were passed. and in addition to any exchange certification and all the exchanges require broker certification, they also have to be licensed in every state they do business. they have to complete an additional course of continuing education each year. usually about 24 hours a year annually. they hold malpractice insurance which they call errors and omission insurance. they are all legally accountable for the advice they give. they have to answer to their state insurance commissionerings. they have people that work for them that have handcuffs. so last year, or really this year, our agents were very

excited. as karen indicated, the survey data they presented today doesn't really give complete sex of how many agents and brokers were certified, but we've kind of cobbled together a couple different sources and we estimate it was about 100,000 agents and brokers were working nationwide to help people with exchange coverage. not all exchanges collected or have published their data about how many exchange consumers used an agent, but we do point to one, which was a recent urban institute study, that showed half of all people that used exchanges did use some type of assistance, including agents and brokers. of all those sister groups, agents had the highest customer service satisfaction rate. agents did have a few bumps in it the road last year with open enrollment. one of those big bumps really had to do with the agents identifying number.

for a variety of reasons, often those numbers weren't included in exchange records, and to make a long story short, agents and brokers and their consumers didn't really have a good way to fix that. that created a payment problem for the brokers but also created a liability problem because if their number wasn't recorded, then that could affect their malpractice insuranc it also a protection issue because we think any interaction a consumer has with any type of a sister should be recorded. particularly in the federal exchange and a few of the state exchanges. because there was only spot to record one number. if they worked together, somebody's number wasn't being recorded. so we really think that that should be corrected for the year ahead. agentses could also better serve consumers if they had a back end portal on the federal exchange for year round case management. that's how nonexchange coverage

works in all states now and in most state exchanges, and we think the federal marketplace -- really would be helpful if they could catch up. also, there was no complete list of certified agents and brokers on the healthcare.gov website which would be an important tool for consumers. and also for other sister groups to partner with agents and brokers. and we have long called for a good way to report and follow up with client problems in the exchange. it's just a hot line. and we'd also like to see some technical improvements made to the plan direct enrollment and web broker mechanisms. that would help agents support their clients throughout the year. a lot of those issues are the federal marketplace. most of the state exchanges were a little more nimble and had better resources. even the best exchanges for brokers did have a few problems. a lot of times for those identifying numbers. the good news is we do think

broker participation in the exchange next year will be high. we don't really know how it's going to be. anecdotically, we're getting good feedback. resort ification is ongoing right now. it looks like it might be a little lower than last year. overall, it's looking good and we see high participation rates again. so we do have some solutions to help agents and then also other assisters. i'd like to point out that senator landrieu and a number her colleaguings hae senator landrieu and a number her colleaguings haleagues have two bills. additionally, there's a bipartisan coalition of more than 75 house members that have formally called on hhs to fex these issues on the regulatory front, and many other senators and house members have also called on the white house and

hhs to update these items on the priority list on a separate basis. so looking ahead, we do see some great opportunities for 2015. online soon. it appears it will contain many of the broker services that the individual exchange on the federal level does not currently have available and may not have available for the open enrollment season ahead. but we're hopeful for the shop exchange, it will at least have some of that functionality. we also see new market entrants and new products being put on to market, which will help better meet the needs of our chints, and we'll be able to learn lessons from open enrollment previously. some concerns that we do see, and i'd love to discuss -- running out of time -- include the new re-enrollment process for existing cleents. in particular, we really just want to make sure that all

exchange enrollees do have ample time to really review their new options for the plan year ahead and just aren't redirected into the same plan, you know, from last year, if that's not necessarily the most appropriate for them jen more. we want them to be able to check out their choices. we have ongoing concerns about subsidy determinations and making sure they're accurate for all applicants, particularly those being redirected into policies from last year. because many of them may have been offered employer coverage or will be offered employer coverage in the year ahead because of the employer responsibility requirements. getting that coverage offer for the first time can affect your subsidy eligibility substantially or negate that subsidy eligibility. so those are some challenges that i see. so thank you very much. i start with the q & a. >> let's start with something

that you actually raised. i should say, let me remind you, you can tweet a question, you can voice a question, you can write a question. so you have your options. i would urge you to get involved in the conversation. also encourage our panelists to offer comments back and forth, if something you've heard has raised a question or made you want to make an observation. you were talking about re-enrollment, jessica, and the challenges it raises. i just wanted to get your reaction and those of the other panelists as well. i mean, we have some number, whether it's 8 million or 6 million or 10 million of people who have signed up for something. and are going to have to sign up for something else and renew in what they had. we have a prediction that there

will be even more people would will be attempting to enroll this open season as compared to last. what does that say about the workload of navigators, assisters, brokers, and what kind of difficulties can we anticipate, maybe try to ameliorate? >> from the agents and brokers perspective, of course there's always going to be some people that their plan option from last year still is a good fit. it's important to have an easy way to get back and renew that coverage. we believe that your health insurance purchasing decision is one of the most important profound decisions a family can make. it has significant financial security implications and also health security implications and we think that every year you should take a look and make sure it still fits, particularly with the new subsidy eligibility, to make sure it's still the right choice for you, it's still affordable, and just check out

the marketplace and see if there's new entrants out there that might be a better fit. >> karen. >> i think -- we didn't ask this exact question in our survey. we didn't ask the assister programs to then chunk that up and say how much of that time was involved in actually doing the id proofing, establishing an account, determining your eligibility for subsidies, and how much of it was plan choice. so i don't know the answer to that question nationwide. i did spend a little bit of time in open enrollment observing a program in northern virginia and just watching the actual process and just that morning, i did notice that it did take about an hour and a half. and so that was validating for us when we found that. but that most of that time was in the application process, not

in the plan choice process. in fact, one question we did ask our navigators and assisters in the survey was did you even get to that process or did you see the plan choice? and much of the time they didn't. so by the time the people got through this whole process of figuring out their income and who was in their household and whether or not they had availability of job-based coverage, and that wasn't very well explained, this was -- this took a lot of time. plus sometimes the website was clunky. i think the plan choice is absolutely important. that's the cherry on top. that's what sort of completes the enrollment. but all this other stuff was what presented a lot of difficulty and required a lot of assistance for people and that's watt assister program spent a lot of time doing. i think at reenrollment we are going to learn in real time what the research literature has told us for a number of years, which is there's a lot of volatility in the lives of low-income

people. their incomes change. their family status changes. their tax filing status may change. i know assisters struggled a lot when they were helping women who were expecting to get divorced. so today i think they're filing married, married jointly, and by the end of the year, that may not be the choice. i think a lot of people are going to be coming in not only to re-evaluate their plan choice but to re-evaluate what they're eligible for inner er iterms o assistance. we're going to see how much more of that goes on. there is guesswork involved when you're projecting all of this going forward for another year. and then reconciling at the same time what you just did a year ago. >> anybody else? okay. yes, go right ahead. i should ask the folks who are standing at the microphones to identify themselves both personally and institutionally,

if there is such an identification. >> i'm dr. carol popland. i'm a primary care physician. for karen and the follow-up survey that you did. it looks like more than a third of the people thought they picked the wrong plan. a large number of people were having trouble with the co-pays and deductibles. there was supposed to be a standard form the plans were supposed to fill out so it was easy to compare one plan to another. whereas before this, when you picked an insurance plan, it was 50 pages long. and there was no way to compare one to another. because they all talked about different things. and the second question has to do with affordability. i mean, when the subsidies were set up, they were looking at

affordability, but also at how much the federal government government was going to spend. as opposed to how much the people were going to have to spend. i wonder what your post-enrollment survey told you about either one of those. >> we didn't ask about the summary of benefits in coverage. the standard kind of format that describes in simple terms, in no fine print and consistent terms what a plan covers and how it works. >> did you have a sense, though, of whether it was useful? >> we're actually in the process at kaiser now of looking. i know some of these other groups as well. like a lot of things in the first year, they weren't all perfect the first time. there are inconsistencies. they're not always, you know, sort of produced in a consistent way. in addition, i think there were

kind of technical i.t. problems with, you know, clicking on the link and it not coming up or them clicking on the link for the provider directly and that not coming up or it doesn't match the plan you thought you were clicking on. i think many, many, you know, factors were at work there to make it trickier in the first year. a lot of these plan designs offered to the marketplace a really new innovative cost-sharing designs. sometimes you get some stuff and then you hit the deductible and then you get some more stuff. sometimes it applies to these services. but differently to those services. i'm seeing stuff i've never seen before and it's interesting to go through and see if we can catalog it. so i think for many reasons it was difficult for people to evaluate plan choices, even if they knew a lot about health insurance coming in.

when we asked assisters what kinds of things would you like to have more training on, more training on the qhp choices, and in particular why is it if there's five bronze plans offered by a company, ways the difference between plans. they don't want to have to, you know, actually, you know, be part of the sales force of the company to get access to that. they would like to just be able to see it. that should be more transparent. so i think that's one of the things that's definitely still evolving. >> is kaiser going to do another report before the next open enrollment period? >> on -- we do reports every day. >> right, i know. on follow-up, the -- why people didn't, why people didn't like their plans. why more than a third of people thought they chose the wrong plans? >> we don't have anything

planned on that. just as our sister survey came out, we did another survey on market par tis pints which was more involved. we were looking at people who had coverage that they purchased on and off the exchange. some of the policies they were renewing, you know, that didn't conform to the new rules as well as new policies. we did have some satisfaction measure measures although interestingly on that survey when we asked people questions like what is your deductible, we had very high rates of don't know, not sure. on and off the marketplace, i think insurance is still a little bit of a mystery to people. more than a little bit. i'm actually working on another thing on insurance literacy. this is a complicated feature. i would refer to my sister colleagues who saw this in real time. this is something we asked about

in our having market survey. the subsidies are not comprehensive in the aca. people do have to contribute a significant amount of money toward the premium which is pegged to a level of your income but the cost sharing, that far surpasses what people will have to pay in premiums in many instances. these are mostly high de ductable plans. even silver and gold plans typically have $1,000 deductible per person. we have a little bit of grade inflation in our metal tiers. gold sounds like everything should be covered but not so much. so there's still a lot of cost sharing that people have to pay for services and i think a lot of what consumers who weren't used to insurance were confused about was they paid all this money for the premium and then they went to the doctor and i still owe $150, i think that was a difficult thing to understand

in addition to a difficult thing to afford. >> thank you. >> any comments? >> what i would like to just add is that i think it really depended on where you lived in your community. if you were in a rural area versus an urban area, your choices were far fewer. you may only be choosing by one carrier or a couple of plans from one carrier. certainly in the states where cco worked, there are a lot of borders. folks are used to crossing a border. and that got much more difficult this go-around. so i think some of those issues are also really at play because the map is so crisscrossed and you cross a line and the reality is very different. >> i would answer if i could -- >> okay.

>> i just want to say around affordability, we had to spend a significant amount of time talking about the individual health plans. we saw a lot of time taken up by that. because the consumers didn't come in necessarily being literate around the idea of co-insurance versus a deductible versus a co-pay. how many of those things are coming out of their pocket before the insurance kicks in. when you look at those plans, and i think you mentioned this, you called this a doughnut hole. you really had to tear into the details of the plan with the consumer. so when they walked away, they were actually making a decision that they were really informed about making. so i think talking about -- when you're talking about affordability, you had to factor in all of those pieces that are

actually going to comprise the out of pocket piece for the consumer, and then not just the premium as one factor to look at. if they started adding up some of these other pieces, it was very3>opo3vq likely certain plae unaffordable. the family might have obviously someone who is employed and that individual is employed, had virtually no premium payments or minimal premium payments. but to enroll the entire family cost $10,000. but it didn't allow them to enroll in a plan with cost sharing and tax credits. they could only enroll in the marketplace in most circumstances without those -- without obtaining those additional discounts. so that was a real challenge we saw a lot around affordability. >> all right.

yes, go right ahead. >> absent a change or a pushback of the open enrollment date, we're very concerned and we see a scenario on february 16th, we have our client who comes in to do their taxes, is being somewhat proactive. they did not enroll last season. they're hit with a small penalty for the first year. they say, how can i fix this on february 16th. and now they can't. they're hit with a penalty that is three timings es as much for following tax filing season. what case management issues are you working with and how are you addressing this with your current enrollees and what are you using in youred an vok kaeshgs essentially marketing plans for those who did not enroll the first time around and took the $95 penalty? >> i would say from our perspective, we saw this a lot towards even the end of the last open enrollment period, talking about the penalty and the

deadlines were real key messages to pushing folks to come in for assistance. or to sign up. about getting that message out widely and clearly. we saw it was impactful last time. it's obviously even more pressing because it's not going to be quite as simple to take the penalty. it's going to be really important we're working with a lot of our party ins in the community to make sure they're equally informed. i think working with partners like, you know, an h&r block and partners like that who have been helpful in the past when communicating with consumers about coverage issues and have been involved. so i think that's really going to be something we're going to have to spend a lot of time on. >> so the emphasis we're taking at seco in all four of our

states is really take advantage of the time we have now. all the navigators and assisters are doing outreap, tch, trying preschedule people for opponents. referral networks to get people in. so that the real focus -- i think in the first open enrollment was six months. we did both education, outreap and enrollment. the focus really shifted in the last three months to just mass enrollment. this time, all the education outreach for the most part is being done front ended so we can take advantage. we found the tax season to be a very beneficial point of contact. and if anyone here is thinking about what might need to happen, an extension of the period with greater overlap with the tax season is significant. >> does that mean, by the way, there's any sort of consensus in the community that it would be a

good thing to try to align the open enrollment period more closely with the tax season? >> yes. >> okay. there you go. >> i totally -- i think this is maybe a problem with this whole concept of delivering subsidies through the tax system. i totally take and agree with all these concerns. they can make a better guess of what they're going to be next year, but they're still guessing what they're going to be next year. i think if we moved the open enrollment to, you know, always end in april and if everybody always signs up at the end, we run the risk of kind of building a structural quarter of uninsurance into people's lives because their coverage will run out last december and then they won't sign up again until the spring. if the answer to that is to reassign the plan year, now you've just moved it around the

calendar. so now you have to estimate your tax liability for the coming year for 2015 and a quarter into 2016 which i think will be even harder for people. i think the real problem here is guessing what your eligibility will be a year in advance because the tax system can't give you kind of real-time take on your eligibility so i'm ni nervous about proposals to move it around the calendar. >> it's a really good point but, you know, people don't focus during the holidays, you know, that -- last december, you know, there was a little bit of a spike to meet the january 1 deadline for folks who had pre-existing conditions, who were really waiting for this opportunity, wanted that coverage on the 1st. but, you know, due to weather, due to holidays, it was very difficult to, you know, to -- especially in our states where

we needed to do the large-scale enrollment events. you know, there's all sorts of timing factors to take into account. >> jodi. >> i would just say there's still just the problem, the challenge i would say, is that there's still a mental disconnect between the concept of having health care coverage and my taxes. and those two don't generally interlink for the average individual, you know, you think of taxes and that falls in one bucket and my health and health care access falls in another place. and generally in people's minds those two don't interconnect and we're trying to do that. and somehow i think that's a challenge that's going to take us a while to overcome for -- for the average person who has to live their everyday life. >> okay. yes, go ahead. >> i'm with technical frontiers. i have a couple of general

questions about the follow-up that's being done with all the activity in the field. i know you're all doing follow up. i'm wondering, is this process going to be ongoing as this program continues to be -- to evolve? and i guess one of the other questions i have, do you have any information about what the beneficiaries themselves, the people who are receiving all this help, are saying about their quality of their experience, whether they're being served by brokers or by assisters or by navigators? any comments on that? >> could i ask you what you mean by ongoing follow-up -- >> i guess what i was thinking, do you do these every year, do you do them within three months following an open enrollment season? >> fair enough. >> well, this was our first survey so we haven't even decided yet internally.

i'm hoping we'll do an annual survey at least for a while because i expect this will be an evolving process. we don't have immediate plans for surveys. i know my colleague, jen, has been out in the field doing a lot of site visits and focus groups to find out what's been going on. i thing k think wwe are lookingr ways. we're still figuring this out as well at our foundation. >> if i could ask the forebearance of the folks who are at the microphones. excuse me. we don't want to completely disthe people who have written things on cards and we have a couple of tweets as well. excuse me. so jen, wonder if you could interject at least a couple of these questions. we have about 10 or 12 minutes left. >> okay. so karen raised this -- or touched on this -- began to touch on this issue. we got a couple of questions. related to the training for

assisters. in particular, how adequate it was and what the plans are for improving the training going forward. so i don't know if -- >> their states dictate the curriculum. cco just continues to maintain it as a priority. that we will wrap around and do ongoing training with our navigators. they've all been training over the summer. we will train any new employee that's on boarded. veteran partnering. and we'll continue to do the quality of insurance and make sure that the folks who are out there are equipped to do the job they need to do. >> we have a question, i would

just point you to our survey. we did ask the assisters what kinds of additional training they wanted. 92% said they did want additional training. they found the initial training helpful. but they wanted more training not only at the outset when they get certified but throughout the year on topics like helping people with their post enrollment questions and problems on tax-related issues, on immigration-related issues. they wanted more training and insurance literacy. they wanted a lot more information on the qualified health plans. they also wanted more training on just using the online application and the paper application and how that differs. so, and they said they very much appreciated training that both marketplaces offered throughout the year. w webinars, conference calls. and they also appreciated the work of outside groups like

enroll america and budget priorities. georgetown university worked with a number of programs to provide in stepdepth training o topics. >> one of the things we hope to see in the training going forward, would better -- i guess more directly relate to the kinds of -- the kinds of priorities that consumers have when they're trying to select plans. it's one thing to walk through the plan choices and key terminology, but when consumers are actually sitting there and they're making plan decisions, they're really focused on how they will use health care. that's really key to -- very often their decision. it's not solely around cost. a lot of them need health care for particular services. not all the health plans cover the same things. they need particular providers. they need particular

prescriptions. so you really have to be able to get into the nitty-gritty of what the health plans provide, and really take the time to understand what the consumer's health care needs are going to be so they make a plan choice that will effectively provide the access they're really going to need. >> in addition to their exchange training are required by state law to complete extensive additional continuing education each year. they're really the only nc to really advise a person. i think the need for this additional training is great for the assister community. given their extensive plan knowledge and then also the

focus of broke rs to provide service throughout the plan year. and there were no fund issues with that. so they're in place and ready to help. if we could further the partnerships between the two, we could really help provide better information to the consumers, better plan selection, advice, and then also better support to the assister community. >> actually, one tiny thing. the state of illinois, they were a partnership marketplace and they put together a new plan comparison tool for consumers that's based on what a lot of you may be familiar with because consumer checkbook does this and they do a lot of the plan comparison tools for federal employees and their health plans. you can go look at that site, but it has a lot more information about plans. as jodi was saying not just the cost of the premiums but different scenarios.

more satisfaction information. more quality information about the doctors who were in the network. so i would commend you to take a look at the illinois marketplace plan comparison tool. it's kind of interesting. >> can i ask folks as we go through these last few minutes of questions to pull out the blue evaluation form and fill it out so that we can get the feedback. particularly interested in the opinions of those of you on congressional staffs of course. yes, go right ahead. you've been very patient. >> hi, thanks for sharing your expertise. i'm casey with deloitte center for health solutions. just interested, given there is a proposed rule from cms to auto enroll people. i know that was talked about earlier in the panel. just curious if anybody -- i guess jodi or lisa or any plans to segment marketing or outreach to folks who have been enrolled

or may auto reenroll versus people would may be newcomers into the system. >> sorry. yes, we're certainly going to have to focus on the renewal and resort ification processsn"1w"1t of our agent education efforts. years of experience of doing this, we tend to see it's high rates of -- well, retention becomes, you know, a challenge. we certainly don't want folks losing coverage. we don't want consumers, you know, getting confused and making decisions that they're not happy with. we're really going to have to -- we're doing this now even as we're still doing special enrollment periods and consumers are coming in the door and we're getting out into the community. we're using that opportunity to make sure that people are fully aware that this is going to happen, that they're going to have to take steps one way or another. that this is going to involve

them actively in some way. so that they're not caught by surprise, that they know where to get help if they have questions. so we're really taking a lot of time to, now, to focus on that. so that people have sort of a heads up this is coming down the pike. and that we're able to keep the enrollment gains we were able to do during the first open enrollment period. >> but it's important to understand that we're not in control of the renewal process. we're not the ones noticing consumers. there's been a lot of talk about our ability to follow up. if you're operating in a federal exchange state, i can't follow up. i was not able to keep identifiable information. so we don't -- there's no cold calling. there's no knocking on doors. there's no lists. so it is our relationships in

the community and people seeing our partners as a trusted source that they're coming in with their letters. i think it's also important to understand -- i guess it's my understanding at this point folks will get a notice from the insurance company which will have the full cost, 100% of what the plan was. if they received a subsidy, they then get a second letter with the amount of the subsidy from the government. so imagine having this low health literally and maybe one letter comes first and maybe one is a little bit delayed in the mail and you can imagine the heart attack you have at your kitchen table. >> i just wanted to point out, a difference, a key difference. again, brokers have been around for a really long time and we're regulated a little bit differently. brokers actually could keep that information. they do have their existing

client base they've been helping all year round. they're able to reach out to existing clients. that's why a partnership can be very beneficial. lisa can help them and then refer them to a broker to finish up the process and then that person has the year round support, and then the year round support with their enrollment. we they get the two conflicting letters and she doesn't know how to get back in touch with them, our members can. unfortunately, not everyone had that benefit. so we are concerned about the year ahead with the redetermination process, to make sure, because as karen pointed out, it's a really volatile population and their life choices could have changed, their income, what have you, and we want to make sure they understand those letters. even that they're just looking at the coverage options and making sure that it's the right fit for them. >> we have three folks standing at the microphone. we have one substitution standing at the microphone for somebody else. we'll try to get to you.

sorry the gentleman behind the gentleman at the microphone is not going to get his question asked. i would ask you to keep your questions as brief as possible. i know our analysts will be as insightful as quickly as possible. even if it takes us, in world terms, into extra time. i guess -- yes, you were here. >> from senator gillibrand's office. so the data presented kind of indicates there's a lack of coordination among these sister groups. so is there going to be some type of federal or third party coordination to incentivize, like, further dialogue between these sister groups, is it just purely a readaticommendation? >> especially in the federal states, we had no choice but to coordinate and we just did itan

were in regular communication. with enroll america. with the other funded entities who are either sponsoring cacs or had federal resources. because we had to. we made sure we weren't duplicating efforts and we were supporting each other's events and making sure there was extensive coverage. in maryland, the state broke it out into geographic regions. and so one entity was responsible for a territory and the partnership and network within that territory. but was very, very well coordinated. in new york, new york i think was probably the most interesting scenario, in that there was 22 entities funded. so there was a little bit of stepping over each other's foot. that said, there were weekly calls. there were other forms and formats. so, you know, while it may not have -- there was coordination. it was more informal. while that is different, it is

not less valuable. i think that is an important statement to put out there. >> i would just say in florida, in just, you know, representing the university of south florida university of south florida initiative, we actually had more formalized efforts around coordination because there was a limit on what the navigators could do and how much were on the ground. in a state as big as florida 100 navigators were only going to go so far. so in the tampa bay area they brought together in a coalition format and tracked the efforts of where they were reaching consumers and they also coordinated efforts to get in and get out and doing outreach and education events. one man can't do it all so in an effort to make sure that nothing was left uncovered they worked

with the entire scope of partners in the given area. including the contracted partners as well. i would say they were all brought to the table. that's a good example where not only did they coordinate but they tracked the efforts of the coordination in a formalized way. >> hi, my name is maria. i'm with the center for health solutions and my question was relating to the young invisible outreach. my question is what did you guys learn when reaching to the specific population. what were you challenges and the other one is based on some of the studies you have done if you collected information. did you find any data on maybe the rate at which they outreach to you guys, the sister programs versus other demographics. >> i can answer the question about the outreach. it's interesting because we made sense that we were reaching out

to the population first and foremost. we started realizing that some of the mass enrollments are more effective to getting some of the younger population. specifically those enrolled in classes. we worked with student health services and student government folks and this was effective in that he were able to get a lot of students into coverage. one of the challenges we had for that was if you had students at part time jobs they were at risk for not being qualified for cost sharing and tax credits. some remain uninsured but in a lot of cases they were having to, you know, not get enrolled.

but i think we found it was tough starting -- we were able to use some of those avenues to get to larger numbers of students and they were in that 18, 19 to 34 range and they're all over the university and they're enrolled in classes and they work part time and full time and it gave us access to a large number of folks and we utilized those all over the state. so that was effective for us. >> quick comment. >> we found in all four of our states that 25% of the people fell into the age range so on par with the national. >> and the last question. >> i'll keep this brief. i'm from the american institutes for research and my question is

for jodi. were there particular interventions that florida took that were better than interventions because medicaid was not expanded? >> i'm not sure what you mean by interventions. >> yeah, enrollment and to take certain approaches over others especially with the low resources. >> we found that partnering with the hospitals was effective. you know, clearly it's -- that's an easy way to identified the uninsured so our enrollment with the hospitals was very effective. now we coordinated with health planning councils throughout the state and that allowed us access to a wide range of partners and i, you know, we saw the results from that. but there were certain aspects

of each of their initiatives that were specific to their community. i think the partnerships and hospitals and universities were very effective. the other thing is recognizing we did have that medicaid gap know wrg the county health plans existed so we ar i believe to connect people in certain counts to some coverage if they fell in that gap as well as we put together an actual concrete resource manual of where all the resources were in the community so folks could access the services they needed despite not having coverage. so they're back working with the rural health care centers and qualified health care centers and mental health centers and all of those resources so we were still connecting folks directly to services. >> thank you. how about approaches that weren't successful? sorry to put you on the spot.

>> i'm not sure i can answer that question quickly. i think going back to the work at the universities. it took us awhile to get that off the ground and initially how we designed those efforts were not initially successful and we had to circle back and figure out how to make those effective and which were the right partners to work with in a university system or a community college that connected us better to more students. we initially started off and saw a small response of what we were doing. we were able to change who we were working with. so maybe that's more specific. >> okay, thank you. >> thank you. thank you panelists for a

wonderful discussion. i think we learned a lot about what works and what didn't during open enrollment period this first year and i think we have talked about some ideas for improving the process and going forward but we also know that i think there's a lot of challenges that lie ahead for this next open enrollment period and beyond but this has been a great discussion and i thank you all for attending and i thank ouris our panelists for participating. >> and ask you to join us all in doing so. [ applause ] .

here's a look at what's coming up live today on the cspan networks. at noon the congressional internet caucus hosts a discussion on online privacy rights. participants include privacy advocates and lawyers. it follows the european justice's may ruling that google and other search engines must consider requests by it's citizens to delete information about them. that's live at 12:00 p.m. eastern on cspan and today's white house briefing will be live at 12:45 eastern with press secretary josh earnest. he's expected to discuss the president's announcement last night that he's authorizing targeted air strikes and humanitarian relief efforts in iraq. also today's news that u.s. fighter jets have dropped bombs on islamic militants in iraq. today's briefing will be live on

c-span 2 and members of congress have been sharing their thoughts on the announcement. peter king says it's essential that we support the president's decision to authorize air strikes and lindsey graham ways ñx.f?g/@áarian aid as w use of arpaioer to stop isis's advance toward civilian populations. >> and florida congressman says there's no such thing as humanitarian bombing in iraq or anywhere else. we invite you to weigh in on your thoughts. on facebook president obama authorized targeted air strikes in iraq. share your thoughts on facebook or twitter using the #cspanchat.

and sunday on q and a ronald reagan biographer edmond morris. >> former representative barney frank that cosponsored the financial regulations law testified before the house financial services committee on the impact of the law as it reached it's fourth anniversary. frank served as chairman of the committee from 20 o 07 to 11. also testifying for several banking and financial industry representatives. max sooen waters serves as the ranking member. >> this meeting will come to order. without objection the chair authorized to declare a recess of the committee at any time. this hearing occurred two days.

today we will exam. it's impact on our capitol markets and citizens more generally. i recognize myself for 4.5 minutes. don frank has always been based upon the false premise that somehow deep regulation or lack of regulation lead us into the crisis. however in the decades of leading up to the crisis and there were few industries who are more highly recommend united. we heard a lot about wall street. i could not agree more. i'm just curious at what point

was there not greed on wall street. so i'm wondering how that could necessarily be the determining factor. what i do know is that affordable housing goals fannie and freddie on steroids and other policies helped mandate financial institutions into loaning money to people to buy homes that ultimately could not afford to keep them my democratic colleagues at the time says let's roll the dice on housing. they did and the economy imploded it wasn't deregulation, it was bad regulation that helped lead us into this crisis. so if you get the wrong diagnosis, you get the wrong remedy adding incomprehensive complexity to incomprehensive

complexity. frequently in washington, regrettably it is the rule as opposed to the exception, laws are always evaluated by their advertised benefits. not by their actual benefits or actual costs at the time we heard it was with the economy and increased financial stability and increased investment and entrepreneurship. and instead what have we learned? we have learned that it is now official that we are in the slowest, weakest recovery in the history of the nation. tens of millions of our countrymen now unemployed or underemployed. negative economic growth in the last quarter. business start ups at a 20 year

low. one out of seven dependent on food stamps. too big to fail, we had this debate before. we had i had yesterday. we'll have it today and we'll have it tomorrow. it is now demonstrable four years later. financial stability is a debatable proposition. financial stability is now defined by the unelected and unaccountable bureaucrats. i don't know whether one can say we achieved financial stability. but what i do know is it comes at an incredible cost. low and moderate income americans to buy a home. again, there's fewer community banks serving the needs of small businesses and families.

main street businesses and farmers faced higher costs in managing their risk and producing their products which is impacting every single american at their table. thanks to his vocal rule our capitol markets are less liquid than before making it more expensive for companies to raise working capitol which harms americans saving for retirement in children's education. services that bank customers once took for granlted like free checking or being curtailed or eliminated. it's one of the reasons that the house financial services committee renewed numerous regulatory relief bills. a number that were passed by bipartisan support. the house financial services committee will have addressed

the greatest omission housing finance reform and working along side our friends developing a bankruptcy alternative to the liquidation authority. we will also have addressed the greatest sin of comission, too big to fail and taxpayer backed bailout fund. now we'll have an opening statement. >> thank you very much mr. chairman. i'd like to welcome all of today's witnesses and i too want to acknowledge and welcome the former chairman and long time veteran of this committee mr. barney frank. and i'm so pleased that he has agreed to be the democratic witness today. barney i've had your portrait hanging over me for just about a year now and during that time i have concluded that just saying barney frank without hearing him is no barney frank at all.

i am pleased we all will be able to hear you today and i hope to hear you remind my republican colleagues about just how close to the brink we came in 2008 and about why congress and the president responded forcefully with your name shake legislation, the wall street reform and consumer protection act. i'm hoping you will recount the widespread human suffering inflicted upon millions of americans. suffering that still continues to this day how years of deregulation, lacks enforcement and zero accountability for the financial institutions destroyed more than $13 trillion in economic growth, $16 trillion in household wealth and millions of foreclosures and devastating unemployment. in the aftermath democrats and some senate republicans passed

dodd frank which provided intersite to wall street and gave the ability to end the era of too big to fail and eliminated loopholes that allowed risky and abusive practices to go unnoticed and unregulated and most importantly it restored responsibility and accountability to our financial system giving americans confidence in a system that works for and protects them. i'm proud to have worked so closely with you on this important legislation and i'm even more proud of the laws remarkable progress in just four short years. the consumer financial protection bureau is up and running. already returning $4.6 billion to 15 million consumers who have been subjected to unfair and deceptive practices. the vocal rule has been

finalized which is refocussing them on making investments in the real economy. shareholders of the u.s. corporations now have a say on pay and can better hold executives accountable by voting down excessive compensation and thanks to longer authorities given to the securities and exchange commission one of wall street's top cops more than $9.3 million in civil penalties has been recovered from bad actors since 2011 but before these accomplishments were evident, in fact, before the ink was dry they emerged themselves in a aggressive campaign to weaken regulators. they inkrecorrectly blame the financial on government efforts to house the poor and disadvantaged despite the fact

that built on predatory markets alone started the crisis. exotic over the counter derivatives exacerbated it and risk management allowed it to flourish and just as they may diagnose the causes they misunderstand the cure. republicans have pushed proposals to cut regulator funding and subject their rule making to constant implementation hurdles and court challenges. democrats tirelessly fought gop efforts to render don frank foo toothless and returning it to the deregulation as a caused the crisis. these assertions are as old as time. the same sound bites can be heard from opponents for the 1933 act passed in response to

1929. though they are the louder critics republicans never offered an alternative. no alternative to protect consumers. no way to wind down banks and i continue waiting for my republican colleagues to acknowledge that they found a flaw in free market ideology. the four year anniversary is an important milestone. we should assess how far we have come and where we need to go and today i for one look forward to correcting the record and getting facts straight about this historic law and it's contribution to the renewed vibrancy. >> thank you mr. chairman and welcome back former mr. chairman.

there's 400 new rules of which 298 have been finalized and still 24% are yet opposed. we see now that this legislation is having an impact on our main street businesses and consumers. as many of you know i've had numerous hearings in the financial institutions and consumer credit subcommittee highlighting the challenges. one of my fears during the drafting of dodd frank that it will limit the ability for them to taylor the products to their clients needs. later this morning i'll share several accounts for west virginia lender of case where is they're no longer able to provide to meet their unique financial circumstances and challenges because of the new

regulations. lending decisions are best determined by washington bureaucra bureaucrats. renewing this critical flexibility is a detriment to rural communities like those that i represent in west virginia. the consequences of dodd frank are not limited to access to credit. policy holders could see increases in premium ifs life insurers are forced to capitol leve levels. i yield back. >> the lady from new york mr. maloney for a member and a half. ranking member of the subcommittee. >> thank you chairman and ranking member and welcome to chairman frank. we miss you. it's great to see you. this legislation bears your name and was the most sweeping overhaul of our financial regulation since the great depression. history shows that financial

reform is a work in progress and will improve and solidify with time. when the investment company act of 1940 was passed it was called at the time, and i quote, the most intrusive financial j beast, end quote. that same intrusive financial legislation is now the cornerstone of the large and thriving u.s. mutual fund industry. it's also important to remember that even the post depression financial reforms took a very long time to implemented. while the securities act of '43 was the landmark reform of our security markets the scc didn't adopt the main antifraud rule. rule 10b5 until 1948. in some financial reform done properly takes time. it requires flexibility on the

part of the regulators and industry and congress. so i look forward to our witnesses today and will respond by saying when president obama entered the office we were shedding 700,000 jobs a month. we've had 52 months of private job growth. resulted in the dow being the highest ever. 17,000 with the stock market. we're moving in the right direction. financial reform is a part of our financial growth and stability. >> time expired. the chair recognizes the gentleman from texas of our housing and insurance subcommittee for a minute. >> put in perspective if you took the security and exchanges acts of the exchange act of 34 and every amendment since then you would still need 600 pages to have the same amount of pages

3898 rule making. 24 million man hours per year required to comply with it. what does this mean? it means that we have institutions now that are hiring more compliance officers than loan officers and it's beginning to hurt small businesses all across the country. the sba said the microloans have declined every year since the passage of dodd frank. it's over $170 billion to 2008. from $170 billion to $138 billion. recently we had a loan banker hearsaying he is hiring more compliance officers than loan officers. >> chair now recognizes gentleman from new york mr. meeks for a minute and a half. >> thank you mr. chairman. i want to thank all of the witnesses for your testimony today but i want to especially say that it's with great

pleasure that i welcome back chairman frank. very few individuals that serve on this committee will experience the great honor of having their picture hung on the walls of this hearing room. this honor speaks volumes to the great influence and impact mr. chairman your leadership had within these walls and by extension to our financial services industry and our great country. many have forgotten how far we have come and you lead when the country needed strong leadership. when our most prized financial institutions were collapsing and average americans were help leslie losing their jobs in retirement funds. four years later we can say we made great progress. not only in restoring our financial markets but safe guarding and preventing the excessive risky behaviors of the past. four years later more americans are starting to work and return to our financial institutions and markets and our banks and

credit units are starting to lend again but they're doing it more carefully this time. while there is no bill that is a perfect bill dodd frank has given us the foundation of which to build upon to make sure that there is strength, transparency in our markets and that americans can continue to live the american dream. i yield back the balance of my time. >> the chair now recognizes gentleman from wisconsin of the financial subcommittee for one minute. >> today the regulations resulting from the 400 new mandates didn't provide any new security to our financial markets. they provide less choice for consumers and expose them to more dangers. the dodd frank act was supposedly created to end too big to fail but all it's done is make it harder for small community banks and credit units

to serve the american people. thank for instance the consumer financial protection bureau. protecting consumers is a noble goal and mission i support but you don't protect consumers by taking away or limiting products through the qualified mortgage rule. limiting credit options or chairing to spare impact based on numbers that don't exist and the additional dangers they're exposing consumers to through their data collection is unacceptable. the dodd frank act has failed to end too big to fail. i think the american people realize there's not much to celebrate. i yield back. time of the gentlemen has expired. chair recognizes the gentleman from connecticut for two minutes. >> thank you mr. chairman and i too welcome the panel and our former chairman and my friend barney frank. it's a pleasure to have you back here. i want to make an observation about the 80 page reflection that the majority produced on

dodd frank. i read it closely and carefully and what is most interesting to me about that and this opportunity on the fourth year anniversary, what is most interesting to me about the 80 page report is the dog that didn't bark. it has for four years been the practice of the other side to abide by the idea that if you don't have something nasty to say, say nothing at all and the 80 pages on this fourth anniversary are related exclusively to title 1 and title 2. two titles of a 16 title bill. the reflection, the 80 pages make nos mention of the cfpd and billions of dollars returned to consumers. no mention of the first meaningful regulation of a market at the center of the melt down of 2008 and of course there's no mention in either of

that 80 majors or the opening statements from my friends on the other side about the fact that the financial markets are thriving as they never have before and we know the banks are profitable. these facts belie the conditions of chaos and catastrophe we heard on the other side. they do focus on the fascinating question of too big to fail where the reality is none of us know whether we have put in place the tools to address the failure of an institution. this is a terribly important question and one that is worth the good bipartisan consideration and without mr. chairman the balance of my time. >> gentleman yields back. the chair now recognizes the gentleman from indiana for one

minute. >> thank you plchlmr. chairman calling this hearing and taking the time to spook with us today. dodd frank failed to end bailouts and failed to lift the economy as the president promised. in every way dodd frank puts regulators ahead of taxpayers and consumers. no one agrees the economy has been made safe from bubbles and bailouts. four years left lending more expensive and loans hard tore come by for consumers. senate democrats blocked this committee's push for even minor changes to the law. one perfect example is the bureau guidance trans parent sy act which was passed on a bipartisan basis. it allows new restrictions on lending in a more transparent way yet no one expects senate democrats to notice. i'm looking forward to real world lenders and not regulators to explain how this law is

impacting the american people. thank you mr. chairman. i yield back. >> we'll now turn to our witnesses each of whom i will introduce briefly. first we welcome mr. dale wilson chairman and ceo of the first state bank of san diego texas. next a partner at treasury strategies, a firm that councils businesses on treasury management strategies. it is now with a lot of sincerity that i welcome back chairman frank. selfishly i welcome the chairman back for two reasons. number one i want to bet the ranking member would call him a

democratic interest and i want to make sure they're well treated by this committee. i intend to be one one day but i'm not planning for that to be one day soon. next the vice president and treasurer of the fmc coorporatin in philadelphia. his testimony is on behalf of the coalition for derivatives and users. last but not least paul is a resident scholar at the american enterprise institute who is previously held a variety of positions with the fdic, other public sector and private sector institutions. without objection each of your written statements will be made a part of the record after your oral remarks. for those that have not testified there and i'm uncertain whether chairman frank ever testified from the table

but i know he knows the system, the green, yellow, red, lighting system. green means go, yellow means wrap it up, red means stop and we have not improved the audio system since chairman frank's day so you will need to take the microphone and bring it very, very close to your mouth so that all can hear you. mr. wilson, you are now recognized for some of your testimony. >> thank you chairman -- >> regrettably that's not close enough. pull it a little closer please. >> my name is dale wilson. i'm the ceo of first state bank of san diego a rule community bank serving a small south texas town. i appreciate the ability to be here to represent the views of the texas bankers association on the impact of dodd frank act. let me start by thanking my own congressman who serves on this

committee. we had a pleasure of hosting the congressman at my bank in south texas and we appreciate his service to our community. during the last decade the regulatory burden for community banks has multiplied tenfold. dodd frank alone has already added nearly 14,000 pages of proposed and final regulations. managing this tsunami of regulation is a significant challenge for a bank of any size but for a small bank with only 17 employees it's overwhelming. today it's not unusual to hear from bankers ready to sell to larger banks because of the regulatory burden has become too much to manage. since the passage of dod frank there's 80 fewer texas banks. these banks did not fail.

texas has one of the healthiest economies in the country. we call it the texas miracle. these are community bankers and i have talked to some of them personally that could not maintain profitability will regul regulatory costs increasing between 50 and 200%. these are good banks that for decade versus contributed to the economic growth and vitality of their towns but whose ability to serve their communities is being undermined by excessive regulation and government micromanagement. the real costs of the increased regulatory burden are being felt by small town borrowers and businesses that no longer have access to credit. when a small town loses it's only bank it loses it's life blood. it's more difficult to improve schools, health care facilities

and other infrastructure projects. i know it was not the intent of congress when it passed dodd frank to harm community banks but that is the reality. one issue that headered the ability of banks to serve their community is the new qualified mortgage rules. as a result of the qualified mortgage rules our bank no longer makes mortgage loans as the costs and the risks are just too high. make no mistake, the true cost is felt by my community:. i used to make mortgage loans that averaged $50,000 and i made them to borrowers that would not otherwise qualify for secondary market loans. i'm not the only bank in south texas to exit the mortgage business. other banks in my county have

stopped as well as community banks in adjacent counts. this is occurring in texas and across the country. the real victims here are the working class and middle class banks want to make safe profitable mortgage loans. denying mortgage loans to borrowers otherwise considered credit worthy goes against every sound business instinct a business has. accordingly we support hr-2673 and hr-4521. these bills would exempt any mortgage held on a bank's balance sheet from the ability to repay requirements and exempt loans held by small creditors with less than $10 billion in assets from the escrow requirements imposed by the dodd frank act. no bank is going to hold a loan it doesn't believe the borrower

has the ability to repay. i ask this committee to look at the unintended consequences of the dodd act so they can go back to what they always looked at. meeting the credit needs of businesses. unless major changes are made, compliance costs will continue to drive massive consolidation within our industry and limit the ability of our nation's community banks to drive main street growth across the country. thank you very much. >> you're now recognized for your testimony. >> good morning chairman, ranking member waters. i'm pleased to be here today. >> again if you could pull the microphone even closer. >> i'm a partner with treasury strategies. we're a consulting firm that consults with businesses and financial institutions including

health care organizations, higher ed and municipalities. we have been doing this about 30 years and appreciate the opportunity to be here today. first of all we'd like to let the committee know we fully support any activity to improve the safety and soundness of the u.s. financial system and we support the objectives of the dodd frank regulation. as we sit here four years later and we're beginning to see the impact of the regulation, the verdict is not good. the regulations created an atmosphere of fear, uncertainty and doubt. the delayed implementation is creating tremendous uncertainty on the part of america's businesses and financial institutions. the ambiguities in the regulation and inconsistencies, some of the vague language, things like know your testimony, systemically important, whatever the lack definition are creating

tremendous uncertainty that's a drag on the economy. let me point out two things at a conceptual level. one is indiana stathey are mand themselves and they're more stable but they're mandated to invest in shorter term instruments because they can be turned over more quickly and they're less risky. well, you can't do both. similar inconsistencies in terms of too big to fail, we think that organizations should not be too big to fail but by designating them as systemically important you're telling depositors to put your money in there because you will be protected. they are too big to fail. here we are four years later only beginning to see some of the impacts. what's the verdict? let's list through the items in the preamble of the act and see how we have done. one is to improve the safety and soundness of the u.s. financial

system. they're the most robust and deepest markets in the world. before dodd frank, u.s. companies operated with cash on their balance sheets equal to about 9% of u.s. gross domestic product. that's an example of efficiency. the european number by the way is 21%. now that we're beginning to see the beginning impacts emerge that 9% has grown to 12%. we're clearly moving in the wrong direction hundreds of billions of dollars have been simply sidelined on u.s. balance sheets as a precaution against the uncertainty of the regulation. if we were to reach the level of the european markets that would sideline an extra $1 trillion. on that object oppenheim dodd frank we miss. transparency. yes there are certain banking activities that are not more transparent and they come under the microscope but the important thing and real issue is risk. it's the risks of the banks

that's key. risk can neither be created nor destroyed. it can only be transformed and shifted. so by taking them off of and away from the visibility of a bank's balance sheet we are, in fact, making the risk less transparent and more difficult to manage and on that point we fail as well. too big to fail i eluded to this earlier before the passage or since the passage of dodd frank u.s.gdp including inflation is up 14%, bank assets are up 25%. the banks are getting bigger. eliminate bank bailouts, taxpayer bailouts is one of the objectives. i point to the balance sheet of the federal reserve bank which has grown from $1 trillion to $4.3 trillion since the enactment of dodd frank. this is a huge concentration of risk which by the way is invested in longer term assets unlike what the rest of the advice of the bill includes and

it's funded by overnight bank reserv reserves. we have here the next taxpayer bailout in the making. finally dodd frank wants to eliminate abusive practices, we're eliminating a lot of practices. in terms of mortgages. they're causing banks to close accounts of diplomats because of money laundering concerns. big banks are no longer dealing with community bairngs because of know your customer concerns. we would recommend that we eliminate a regulator comprised of regulators so here's redundancy in the system and then finally to carve out some protections for the 99.99% of all american businesses and financial institutions that had nothing to do with this

regulation. to wrap it up in just a second, two years ago i toestified to this committee and said would anybody be there to answer the phone. the answer is yes, the compliance officer will be there. not the loan officer. ladies and gentlemen of the committee that is no way to run the best economy in the world. thank you very much. >> again, chairman frank welcome back home. you're now recognized for your testimony. >> i apologize that my written statement was not in the form it should have been. it was a last minute thing and on the other hand i think any problem with an element of surprise is probably not a problem here i don't think any of the members of the committee will be surprised by what i say. i want to begin with the too big to fail question and the issue i

think is an interesting one because what i said and i did write, i was surprised myself at how bipartisan the committee's report was. for instance in saying this whole problem started with ronald reagan in 1984 with continental illinois they report this began with ronald reagan in continental illinois and it was continued by bill clinton with allen greenspan taking the lead but the report clearly puts most of the blame on george w. bush and his aids because it said this really became a problem with stearns and while i recognize that's a very bipartisan thing for a republican committee to do, they've been a long fan of them and that was a problem that had to be dealt with. on the other hand i was struck by your bipartisan effort to emotions grace guytner but you

got it wrong. the problem he sees is the opposite of what republicans think. his explicit point is we did too good a job of preventing bailouts. he objects that we shutdown too many of these ways to do it. to he believed -- look, everybody understands there are going to be institutions that are too big to fail. everybody also understands when i move my hands you hear the shutters. what he has said is given the size of banks, yeah, and everybody understands that from ronald reagan, continental illinois, the question is how do you feel with that. he believes there's going to be the point for federal taxpayer intervention and we did too good a job of shutting that down.

when you cite guytner that's what you are citing. why do we not do too big to fail? there's two arguments. one a systemically important financial institution very attractive. every institution which is threatened with being named reacting very violently and negatively. for people that tell me you're supposed to listen to the businesses how come you haven't heard that the businesses hate the idea of being designated. instead of it being an advantage they think it's a curse. when you talk about oh this is a great advantage and you ignore what the businesses say about this, those that could be designated, that's a analysis but when he said in one of his movies who are you going to believe? me or your own eyes. who are you going to believe? your own viewpoint or what they tell you? the other argument is even though the law says the feds should not give money to

insolvent institutions and the secretary of the treasury should not do what we have done in the past, give the money and keep them alive to pay their debts they'll violate the law. i heard the most astonishing argument that it will force the secretary of the treasury and president to violate the law to keep these people in business. the law says you may have to pay some of their debts as ronald reagan recognized in 1948 with continental illinois but first of all you put them out of business and secondly you get the money and i was struck by the approach the majority is taking on sub prime loans. loans to poor people. i was astonished. i get astonished a lot these days, i'm out of the business, that there's a criticism that under the bill fewer loans are being made to low income people. yeah, that was part of what i thought everybody wanted to do.

i thought that was a consensus that too many loans were being made to those people and then when you blame the community investment act i'd like to cite testimony of our banker from texas that says community banks didn't make bad loans. i agree and they're all subject to the community investment act. if it was so distorting that's a problem. finally i would say i look forward to congratulating you mr. chairman on a 4th anniversary coming up. i know this committee passed a bill on fannie and freddie but it hasn't passed the house either. we're about to see the fourth anniversary of your party being in control of the house and not doing anything about this problem that you say is such a serious one. >> you are now recognized for your testimony. >> thank you mr. chairman. good morning to you ranking member waters and the members of this committee. i'm vice president and treasurer of fmc coorp ration and

immediate past chairman of the national association of corporate treasurers. fac and nact are members of the coalition for derivative and users representing thousands of company across the country that employ derivatives to manage day-to-day business risk. let me sincerely thank the chairman and the ranking member along with the distinguished member of this committee for doing so much to protect users from the burdens of unnecessary regulation. the press often prepares capitol hill as paralyzed by gridlock but when it comes to the needs of mainstream business the members of this committed tee worked together to get things done. you supported the hr 634 champ i don't knowed by representatives grim and peters and the centralized union bill hr-677 and have done so much to move forward. we hope that a version of that bill modified with discussions

through the chairman and ranking members of staff will come to the house floor. as you oversee the implementation of the dodd frank act i want to insure you that in my experience and users comprising less than 10% of the derivatives markets were not and are not engaging in the risky speculative derivatives trading activity that became evident in 2008. we used derivatives to hedge risk in our day-to-day business activity. we're offsetting risks. not creating new ones. we support the transparency in the derivative markets the act wants to achieve. we also believe to exempt end users from reducing the inherent ri riskiness of users. there's several areas where the regulatory uncertainly remaining compels users to appeal for

legislative relief. i'd like to invite your attention to two. this is our 83rd year of being listed on the new york stock exchange. in 1931 it was the largest pool of capitol to grow our business. using derivatives we have a larger market that's cheaper and more flexible way to hedge business to foreign exchange movements and changes in interest rates and global energy and commodity proiss. our banks did not require fmc to secure in the value derivatives. to do so would divert cash we could see in our business. proposals by the banking regulators would mandate collection of margin from end

users are no longer out of sync but also with the european regulators as well. further imposition would negate the end user clearing reception which congress concluded in the text of the dodd frank act. we believe they should remain free to negotiate acceptable market arrangements instead of having regulators impose mandatory daily margining with it's uncertain liquidity requirements. it provides relief on centralized treasury units but as a recent survey shows it doesn't work for most end users and user treasurers have long used widely accepted risk reduction techniques to net in their groups so they can reduce derivatives with banks however the treasury units they use are set tog to be designated as

financial incitities subject to mandatory clearing and margining even though they're acting on behalf of nonfinancial end user communities otherwise eligible for relief from these murders. although i focused on two main and conflicting rules from u.s. to foreign regulators that will determine whether we can continue to manage business risk due to derivatives. our fear is cross border unregulatory and conflict could put fmc and other american companies at a disadvantage. the end user exceptions from margining and clearing we taught would apply are still uncertain confronting us with the risk of foreign regulatory arbitrage and p potential burdens that could limit growth and our ability to sustain and grow jobs. thank you for paying attention to the needs of venues or companies. >> you are now recognized for your testimony.

>> chairman, ranking member -- >> going to have to bring that microphone closer please. >> thank you for convening today's hearing and inviting me to testify. i'm a resident scholar at the american enterprise institute but this represents my personal views. the primary goal was to end the perception that the largest financial firms were too big to fail and remove the risk that a large institutional failure could create stability unless the government protects inves r investors for laws. they're depressing economic growth but failed to meet it's primary objectives. regulatory data on bank funding costs shows in the years prior to the financial crisis 20rks 05, 2006 and 200 period t largest banks, banks with assets greater than $100 billion didn't enjoy the cost. it was higher than the cost incurred by smaller banks but

wasn't significant in any year. in postcrisis, 2012, 2013, and 2014 the larger banks have lower average funding costs compared to smaller banks. in each year after the passage of dodd frank they enjoyed more than 22 basis points and in each year this is highly statistically significant. the patches of dodd frank has not eliminated too big to fail yet instead it coincides with a sustained funding subsidy that did not exist before the financial crisis. in the financial crisis the government demonstrated that it would not let the largest financial institutions fail and dodd frank has not diffused these expectations. they're subject to enhance by the board of governors. they must meet risk based capitol and leverage requirements and file ordinary

resolution plans and pass the stress test examination. they're so intrusive it's not a stretch to say the largest institutions are being run at least in part by the federal reserve board. the federal reserve board closely monitors the largest institutions and after dodd frank it has the power to require a wide range of changes in these institutions operations if changes are needed to prevent failure or financial stability. one of these experiences a serious hiccup the fed will at least be partially responsible. why wouldn't a rational investor conclude these institutions are too big to fail. dodd frank is supposed to eliminate the governments ability to prevent financial instability when a large institution fails. designated institutions must file orderly resolution plans using chapter 11 bankruptcy and must not cause financial instability.

they must approve these plans and have the power to require bankruptcy. advertised as of the sort. the key to a pre-packaged bankruptsy is acceptance of the plan before entering bankruptcy. creditors do not approve dodd-frank ordinarily resolution plans. they are not obligated to follow them should they end bankruptcy. if title 1 doesn't do the job, dodd-frank has title 2, a backup mechanism. it is supposed to remove the risk that the failure of a large institution will cause financial instability without using government guarantees or bail jots. title 2 doesn't do this. using the single point of entry, a title 2 resolution will make financial tranquility by ensuring all of the liabilities of the failing institution s subsidiari

subsidiaries. in most cases they will be a large failing bank. here title 2 extends a full government bailout to all of the banks uninsured liabilities. it will protect investors who would have lost everything. title 2 reduces bankruptcy systemic risk by extending a larger government guarantee and bailing out investors who would not have taken loss in bankruptcy. in the midst of a crisis, the fdic will use its judgement to how large the bailout must be to maintain financial sta dilt. if a title 2 resolution do not cover the costs, the largest financial institutions will be assessed to recover expenses. but the dodd-frank requirement to repay title 2 bailout costs without taxpayer funds is less binding than it seems. what if title 2 were used in the past crisis? the federal reserve began paying banks interest on their excess reserves. they earned a lot on this.

these payments channel fund s directly into banks. there is nothing that precludes the government from using this to provide institutions with the funds they need to reimburse the liquidation fund. less than a transparent bailout but a bailout nonetheless. i look forward to your questions. >> all of our -- the chair yields five minutes for questions. i care about the future of community banking in my district in texas. half the district is rural. so your voice is an important one. i got to tell you, yours is not a solitary voice. because rarely does a week go by that i don't hear about the plight of community banking from some banker. i heard from a gentleman from -- a banker in texas who said, with respect to the regulatory burden of dodd-frank, we will see

community banks continue to decli decline. we cannot afford the high cost of federal regulation. as one banker, will tell you my major risk is federal regulatory risk. i heard from a banker in nebraska about the dodd-frank act. these pressures are slowly but surely strangling the traditional community banks, handicapping their ability to meet the credit needs of their community. another banker from missouri, the more expense for the bank, the less that is available to loan to our customer base, which is small businesses, farmers and folks trying to get by in these difficult times. i heard from a banker in temple, texas. we are work, to downsize all consumer lending program,

especially in the small loan area. over the years, we have provided thousands of small loans to our customers in what was a straightforward process. this is no longer the case. in many customers are going to other sources with their credit needs where they can get a loan without the hassle that comes with bank compliance. there's no question these rules will reduce the availability of credit to many credit-worthy bo borrowers of all size. one banker used the word strangle. is dodd-frank in your opinion strangling community banks? >> yes, sir. there's lots of challenges to us. we have 17 employees. and so just when you have the changes to regulation, it's retraining staff, it is retraining systems. so any time there's significant

regulatory change, it is difficult on small organizations. >> i also understand the data that i have seen is that there are roughly 800 fewer community banks post dodd-frank than predodd-frank and they have a smaller market share. have you seen this study or similar studies, mr. wilson? >> i have heard those numbers, yes, sir. >> again, it's a sad situation as far as the plight of community banking goes. i'm also -- although it wasn't advertised that dodd-frank would lift the plight of low and moderate income people, i believe quite the opposite, although not advertise eadverti hurt them. what i have seen is that an analysis of credit cost for those people pre and post dodd-frank, credit cards are now on average 224 basis points,

over 2 percentage points greater on residential mortgages, jumbo, 45 point basis great conforming, 14 points greater, small unrated corporate debt, 41 basis points. here is an interesting one. auto financing, 17 basis points less. isn't that interesting since auto dealers were exempt from dodd-frank's cfpb? we know the fed has shown their study on qm, once fully implemented without exempting the 95% of mortgages that one-third of blacks and hispanics will not be able to obtain a mortgage due to dti. i'm still waiting to see the outrage on the other side of the aisle. core logic is reported when fully implemented, only half of

today's mortgage originations will meet qf. before dodd-frank 76% of banks offered free checking. now only 39%. it continues to drop. there's also been a 21% surge in checking fees post dodd-frank. the list could go on. mr. wilson, i'm going to go back to you. you obviously bank a lot of low and moderate income people. is dodd-frank hurting low and moderate income people? >> yes, sir, in our market that was probably the main niche we had in the housing side. our census tracks are low to moderate income for our community. so those that do not have access to that credit from us, it's hurting them. >> i thank you. i yield to the ranking member. >> thank you very much, mr.

chairman. to barny frank, who worked so very, very hard to bring about protection for consumers and who spent a considerable amount of time paying attention to community banks, i kind of resent mr. wilson's testimony here today that talks about qm even without him even understanding that his bank under qm, your bank under $2 billion, you can keep all of your loans in portfolio. no documentation loans, those kinds of loans. and you have some protection under safe harbor. i'm go fog go to barny frank. talk about what we have done and what you have done to be of assistance to small banks and community banks. >> a couple of things. on the point you raise, i am,

again, very surprised to hear my republican friends now say our problem is that we have standards for banks to low income people. i thought it was general agreement it was part of the problem. there is this myth that somehowñ the democrats were pushing for these loans. during the period from really the mid 1990s, it was people on our side who were trying to restrict these abusive sub prime loans and were restricted. we passed the homeowner equity act. mr. greenspan wouldn't use it. a number of states, including georgia, passed laws to restrict sub prime lending abuses. the bushe ed ed aadministration pre-em pre-empted. we were trying to put legislation through to regulate sub prime loans. the republican leadership said, shut it down. on the day that this committee,

democrats in control, began to regulate sub prime loans, it was over objections of several members here who said sub prime loans were good. wall street journal objected and said, there's good loans, 80% of them are paying on time. which didn't seem to be a great statistic. in fact, what happened was this. people on the conservative side were generally pushing these loans until the crisis hit. then they needed an alternative victim -- villain to blame for the crisis. so they became opposed to these loans. now they reverted. there was a period they were blaming us. this is great inconsistency between saying community reinvestment act caused the problem by forcing people to make these loans to poor minority people and now complaining that we have regulated it somewhat restricted those loans. as to the community banks, let me say this. i would be in favor of saying that people who kept the loan in portfolio should not have these le