thank you for your valuable advice to the u.s. treasury and to our president. i have had lots of meetings with representatives of financial services. i want to say that texas this is the overt act fees. banks also are concerned they might this another key source of revenue.

having seen how consumers are struggling with the increase in the cost of groceries, gasoline, many having lost their jobs and homes, i cannot help but want to troot for your work and say that consumers need protection. they do not have the lobbyists and we have been congress working to protect the representatives of all the financial-services. tell us what we can do in congress to ensure that this law is implemented and that it will help our consumers get jobs and hopefully put our country back

into what we experienced during the 1990's. >> thank you. that is a heartfelt question. i wrestle with the issues you describe everyday. america's families have been on the r opes for a long time. many families have turned to debt only to find what they thought would be temporary was far more dangerous and costly than they had anticipated. this agency is here for american families. it is also here for america's banks. i met with community bankers in san antonio, texas when holly petraeus and i went down to the

air force base. we listen to their concerns. it really has become clear that what we can do as a consumer agency to cut regulatory burdens is to make risks and prices clear. it will be good for credit unions. it'll be good for the financial institutions. they are willing to put up a

pradesh pretending it is at one price. these competitors take families away from the founder banking systems. they need a stronger economy. that is what we are here to do. >> thank you for that response. i heard my friend talked about all we have in the bill. it seems like they are the voice for medium-sized and large banks. explain to me why they are so concerned? >> many thought the business

models are a way the round -- the world is. we need to figure out how to turn the revenues. king it impossible to compare one project with others. some of them are very concerned. >> thank you very much. >> thank you. >> thank you. i appreciate the opportunity. we appreciate your time coming

here. i want to explore that a little bit and find that your views on these organizations and with a bit and whether you believe they should fit. i have a background in real estate and developing. the first time i ever vested was a two-family on 17th street in michigan which is a very rough neighborhood. the families that living there and the families that looking at trying to make an opportunity for themselves really were not going to be able to fit into those conventional boxes. we were talking about big and medium-sized banks.

many have been able to service people. whether it is people holding land contracts, i know many people who been involved in real estate. they hold millions of dollars of personal funds and land contracts. you hit on a phrase just in this last answer of serving americans families. there are a number people wanting to do that. they are afraid of some of the directions that this appears to be going. they not -- they may not be able to function. what are some of your views that are less than conventional. whether they may be disabled are

may be low and moderate income, there is a marketplace that needs to be served. >> thank you. this is a very important and thoughtful question. the first we thought was for $23,000. we were not conventional buyers. i understand the importance of being able to serve american families across a wide variety of circumstances. i think it has been one of the important things that community banks and credit unions and also non-bank lenders when they come to visit have talked about with me, how it is that they build a business model around adjusting to the different needs of different customers that they

acknowledge. they acknowledge the importance of relationships banking. they know how to customize projects. i think the best way i can say this is that we are working with those to serve families. we are committed that prices should always be clear. they should never be a family ready to take down a mortgage. there should never be a family considering taking out a mortgage that does that get what the basic risk is. there is never be the case that a family get information in a way that they cannot make some straightforward comparison of one market to two were three other. that is the direction we have been driving it since the first day i have been there.

we have tried to do it at the end of the agency and to the entire attitude. old simile, that is what you want to be able to predict ultimately, that is what you want to be able to do -- old simile, that is what you want to be able to do. it serves the american people. that is our job. i appreciate that. if anybody has refinanced their home are few have been buying it, there is plenty of paperwork that you are assigning. i am concerned about the redundancy and whether some of these things are necessary.

how will this work for the lenders. how will this work for the broker. but colet and implement here. they have about 1 million in land contracts. he says he will not be able to function. i like to hear how that would be taking care of. >> >> i want to commend you for your work to do it in plain english.

i heard from consumers that they are very frustrated because it is unreadable. i've also heard from community banks. it is easy to forget that most people were trying to make it. they are trying to do right by people. they felt like they had to simply regurgitate the language of the wretched state -- a regulation or statute. they felt that was the safest thing. it is a service to consumers and to those who are trying to make an honest living. i do remember with respect to the first proposal that

financial institutions offer a plain vanilla project. that dropped quickly. they offered an amendment that they can not require any financial institution to offer any project. when there were complaints that the sovereignty may be threatened by consumer protection, it cannot be required to do something that would be impossible for them. they have to do things that they will to stay in business. >> that is correct. the argument about consumer choice reminds me about the argument a century ago. it would depend upon the right. it turned out consumers and not

want to buy beef. they wanted the assurance that there were buying pure beef. if they wanted. they could buy it here and let it rot. they did that give you the right to buy spoiled be. i have yet to talk to anyone who actually chose some of the products offered in the last decade. i cannot think of any size. as some of the can identify someone that qualify for a prime loan that wanted a key 28 with a monthly payment of 30% or 50%. i asked if he could identify someone that shows that knowingly. i mentioned over jobs. i want that.

i do not want the pranks to be able to process overdrafts not in the order in which they come in. or that the atm machine ptomaine that funds available to you know people that wanted that? i do not. i made that offer on the house floor. if anyone knows someone who really wanted those products, let me talk to them. let me understand how they would have chosen it.

one of the criticisms is that it does not say what the banks supposedly did. usually when there is an enforcement option, but that they cannot do it into a settlement. it is bad for us. did you know that they ask that there be some detail. >> i have no knowledge. that is what i understand.

>> thank you. >> thank you. good morning. i think all of us here want to steer clear prices in regard to lending. i want to make sure borrowers know the rest -- the risk of the loan they are taking. there are other issues flaring up. i do not want to beat a dead horse. i want to go back over what your role is here. there are two jobs contemplated. one is that there will be a director. the president will nominate someone. the senate will come from.

it is perfectly clear that some went best to get this agency up and running. but that is why i am asking the question. it walks like a duck and >> like a duck, it is a doubt. -- and quacks like a duck, it is a duck. he might say that you work for the treasury secretary, but anyone who looks at what is happening agrees as though you are behaving as though you are the acting secretary. we want to see confirmation from the senate. this agency provides a voice for the american people. i look at this. we are the voice of the american people.

when we do not have any oversight, i see that as incredibly problematic. that's all right. thank you. it is between the time the president signed this bill into law and the time the agency received the authority under the statute. this is hiring in signing contracts. it is you. it is the secretary are there. they ask me to come in and spend my time doing this. it has been a 14 hour a day job. >> i agree.

i know exactly what you are talking about. had he been confirmed? >> i am acting on the secretary of treasury. let's let me move on. it appears that you are not the acting director. they all have five member board. they are consolidating this. the primary right -- be there.

there is the believe that having a single director and have someone doing banking may still more efficient operations. there are involved in important areas. but they work well. >> they are not banking examples. >> would you be opposed to a five member board? >> what i will say is that this was there. >> are you opposed? ? congress made the decision appeared >> i'm not asking about congress. are you opposed? but i think it was the right decision. >> this leads me to my next point.

i think d.c. concern with my colleagues. they agree with what you are doing. it deals with safety and soundness. it is a 10 member board. we did a super majority. all we need is one more. our time is up. >> thank you. thank you. >> and want to start off by saying thank you for your great work. i have been on the oversight committee. i have seen you in action. i think you do a wonderful job. despite all the criticism, i hope you understand that those

to really understand what happened, you are the champion for consumers. i hope that you are nominated. he has shown a lot of coverage to stand up against the folks you stand up against. there are lots of people the stand up for the big banks. they said that for financial institutions. they are heavily financed. to there are lots of lobbyists. you are in the teeth of that. i ask you to keep at it. i think you are fighting the

good fight. you are on the side of the angels. hopefully, you will be nominated. we hope for that. understand this change. there is this great investment and the status quo. we see this. people are nervous. i do think -- bank of them and allowing them to be overruled. it does permit a short circuit in place where if it was unwise, it might happen. there is a failsafe there.

that is certainly warranted. the damage done to american families cannot be overstated. it is done to the market. investors -- they feel that the arrangement is rigged. there is insider training.

they do not believe the system is honest. they think it has been compromised greatly. they are hoping he might be part of that. the complexity of the market is growing. and asking you to try to explain to consumers that are out there about your role as someone it confirms my help rebalance the power there before consumers and financial institutions. >> i appreciate that.

the banks will be heard from in washington. the question is whether ordinary families will be heard from. they want to provide good projects. this is about this agency. it is a real belief in a market so long as they are honest. i do not care how big you are. everybody follows the law. the laws are directed to you folks a you can have a real chance in this financial

marketplace. the risks ought to be clear. it ought to be that you compare one product to two or three others. >> thank you. black thank you. i like to ask a bay have this. i sought out a second mortgage. it is a five-year prepayment penalty. i probably paid for% or 5% more than the going rate to be able to get a second mortgage on my home.

i was able to repay debt and the film my dream. they know that they can do it. the government is going to tell them that it is a bad deal and they cannot do it and not allow businesses to make those loans. i appreciated your visit. there are a lot of young

businesses that are just getting started. they use a lot of their own personal credit to finance these things. more than 47% of small-business owners use personal credit cards as opposed to business credit cards. that is in nature. i want to sit between an individual using credit cards to buy fancy clothing and a small business owner obtaining credit. >> thank you for a year hospitality. i want to be clear about what we are trying to do.

but we compare one product to another. they said the small businesses. they keep it from there and birds. i know how they struggle. >> how are you going to distinguish that individual here is unique it for business from selling here is using it for personal use. >> they are excluded. there are clear. there is a question about whether you buy good-looking

clothes or ugly clothes. but what is this going to be mean that almost 50% of business start-ups and business people that use that. they are putting us again. if your agency regulates their activity, what does it mean to the sector that is growing. >> i heard two weeks ago from a group representing small businesses. small businesses are very concerned. when they finance this, risks are not made clear. this agency is about making a clear.

they need to know how much they are spending. it to be segregated. >> impersonal credit, it is about making this clear. >> they have 10 billion in .ssets par what part of my business practices with your business are regulate. >> it is not regulate the ordinary banking activity. this isn't area like home mortgages.

we talked about how it is figuring it out. they make it come earlier. we are focused on the consumer credit card that and whether or not those to using them are actually following the law. >> thank you. >> i would like to ask unanimous consent to insert the comments. >>. -- thank you for allowing me to have unanimous consent to be a part of this.

elect to thank her for her service to the country. i believe that you are doing a very difficult job. i trust that you will continue to serve your country as well as you have. i like unanimous consent in report from the americans for financial reform. it is a proper support dated january on page 4 of the report, there is an indication that there is a need for a permanent director. they see him as a transitional person.

but there are no objections, may been submitted to the record. >> without objection. she has submitted this to us. believes community bankers and credit gainers and made it clear regulatory crisis. they go on to indicate that this is hiring lawyers to investigate the complex rules. importances small banks and credit union cannot be overstated. they are disproportional -- disproportionately providers a small credit to business can the

community bankers are excluding early importance. they have made it clear that there is this that they proceed. they are regulated out of business. is it possible within the bounds of the ethics for us to work together to help the small banks continue to provide a good service for consumers? also, how are you may delete

embracing this crisis that they perceive as one that may cease to function. >> thank you. i see this very much the same way. i worried about our community banks. i worry about our providers. we are clear about the projects. they are willing to make this clear.

they are doing what they can on the consumer side. there are better. >> >> let me state this. in your report on page 18, you indicate that in addition to the fundamental strength congress has imposed, you indicate that specifically you are required to submit the agency annual reports. we indicate that they conducted each year.

he had to submit financial .perating plans when i the mention that over said was there. i mention these things because i wanted to relay some of the concerns. it has more oversight them less federal agencies. cracked a couple of observations, we see this straight up. >> you are demanding this from

the people you enforce. >> he testified. i like to believe in it. online to think about the sec and mr. madoff and believe that in two years ago be operating exactly the same. it might fall short of maybe you are going to be the government agency that the idea that you

propose on page 4, we believe we have a market place in american families. when i go to a bank and ask for a low, the first thing i go to has made it clear. it is concise. we are trying to enforce consumers who do not like the answers they can from institutions that have the paper work. you aren't going to enforce the standard on institutions and more only answering the demands of people to come and get project because it cannot get the project somewhere else -- i remember in the state legislature. they wanted to regulate payday lenders. they charge $20 for learning

keep 100 per month. i felt like that is too exorbitant. it was 1000%. one guy came up and said what damn business is it of yours if i buy $100 a day and want to pay back $120. that still rings clear. at some point, you should ask that to your agencies. the question at i have -- it is my understanding that we will not be here if the basic rules of the road were consistently enforced, protecting in -- protecting consumers. i get that you believe that there was no enforcement for mortgages.

they did not do their jobs. nobody has this. >> i think the evidence is very clear. they did not do their jobs. >> maybe the government asked the banks to give loans to people who cannot afford it. they did. the government insisted that banks give loans to people who could not afford it. no loans with payments for a from made. the loans without the ability to be paid was lumped into bonds. the exotic instruments were created out of that.

that is what was not regulated. he is giving a project that is not in compliance. >> i think we can agree that the crisis in home mortgages and then the rest of this economy was not caused by community bankers or credit unions. it was caused one mortgage at a time for mortgage brokers. they put out products. it was deceptive. i think that is the evidence of what went wrong. >> the race those.

>> -- the release of those. >> thank you. >> >> thank you. in your testimony, you indicate that many rules making noncompetitive. diplomatic competitive disadvantage. >> they have this on the better pirro. it is fairly complicated. they depend on this from more than 15 years.

it comes to one agency. we will combine its. they originally these marriages. it is the most efficient way to do that. and might actually produce this. >> are you going to look at the cost benefit? >> we certainly but that the costs. >> liking the the numbers all day long. >> been they have work to the

community banks. >> answers the question. i'm sorry to interrupt. i want specific answers to specific questions. at what point is it too costly to implement? we are required by law to do a cost-benefit analysis. >> i know you are.

a costa million dollars and a billion dollars. at what point will you say no. >> that is what it is. >> i think your question about the point is important. we are communicating right now with the community banks about the changes they want to see. they think there are cost savings from them that benefit consumers. they are going to put a new form in place. now have to put the front and the back.

you are going to be the new examiners on the block. >> ones with more than $10 billion in assets. in the consumer agency will be the primary supervisor. >> dave will be based. -- the transfer date is july 21 of this year. that is one the other seven agencies stand down in some of their responsibility for enforcement and bills of writing.

>> what else have they been doing? >> we will be doing something different. we will be enforcing it. >> by evelyn to the collecting them. >> -- are you going to be collecting them? >> thank you. i want to thank you for taking the time to do this. i would like to continue down the lane in terms of how you think this will impact small- business this. consumer enters into the transaction were full disclosures. are there any reasons on which you are the agency could possibly invalidate the

transaction? if so, what are the possible reasons? >> i tried to make it clear. it is about making the crisis clear. the point is to get an informed consumer. i believe that american families are good at making decisions when they have the information up front. >> i cannot agree with the more. the way it is written, there'll be one person in charge. >> it may choose to enter and a

financial transaction. they have unformed practices. there are certain practices that are getting an unfair. there is that will come to the consumer agency.

>> can you give me any sort of an idea in how you plan to reduce the regulatory burden that adding another regulator into the mix. people, it is the uncertainty that the their creating another level of uncertainty. especially the power being put into the bureau. i take is that they will wait. >> are you concerned that this expresses it? we will take transfers of the authorities that are currently there in seven other agencies.

we will put them in one agency. we will hold accountable. " we have tried to do is reach out to all potential stake holders. we have talked to nonbank lenders. we have gone out and have had extensive conversations with the investment community. they have had questions about how this would be set up. if you are going to make these a little more obvious for consumers to understand, let's

add some of the risk. >> it is greater than in several people making a mistake. kenny turner. tell me right now? it is a temper some board have a way to overrule it? >> that would be with a 2/3 majority.

>> i would like to add two minutes. >> thank you. thank you for yielding my only question deals with the idea that we are protecting consumers and doing the things that eat away at their ability to pay their mortgages. we are here to protect the consumer. we are here to make it easy for consumers. >> there have been basic rules on the road. i was wondering if you are going to be the champion of the consumer as it comes to inflation.

they realize with the most big practices right now is what is taking trillions of dollars away from the bank accounts. is your protection going to log into the really heavy duty pie? d.c. roldan? >> i am sorry. -- do you see it roldan? >> i am sorry. our policy is not in there. >> i thought we were going to protect anyone. i appreciate it. i yield back. >> thank you. thank you for being here today. just a couple of quick notes. we heard about anyone who landed money that is considered morally reprehensible has been called out. i would like to think that it that was the case, there was no

marriage is on the part of the democratic majority or president that allowed it to happen. secondly, we have heard from our colleagues about how spoiled before us once opposed by people who wanted to eat it. that is a fair point. no wanted to eat it. where there is a legitimate concern for governmental action to prevent a social harm, we wind up going from the inspection to prevent spoiled be. it is to the elimination at half the bills at the levels. in your eyes, with the fact that we to not in nearly appropriate to your entity, what do you believe are the appropriate limits for the agency that it will never do and what is the proper role in congressional oversight.

as you know, of the banking regulators are part of the appropriations process. congress has repeatedly made the very wide decision that pulling a banking regulator, somebody who has to stand up to the richest and most powerful and say, sometimes, no, is not a good idea. and congress has never done that. as it stands right now, the other banking regulators stay outside the process. the consumer agency is the only one of the banking regulators who actually does not have full control over its own budget. its budget is effectively set by the fed, unlike the federal

reserve's the ability to set its own budget and the other agencies. so the consumer agency is more constrained on the financial side and it is subject to being overruled by esoc, unlike any agency anywhere in government. i am convinced that this consumer agency will be a voice on behalf of american consumers. but congress, quite reasonably, in setting this agency up made it the most constrained of the favorite -- of the federal agencies. >> i appreciate that, but not necessarily bias. it happens to be in the constitution and that the entity within the government that is most responsible the

people is the house of representatives and may be the richest and most powerful people. thank you. cfpbid someone call the siep about a complaint about a mutual ?und - >> i believe the boundaries on our jurisdiction are pretty clear and that the consumer agency does not do -- >> they don't get involved with investors. >> i think investment issues are left to the sec. >> in your letter to congress and randy, dated january 31 of this year, york -- your

concluding paragraph says, "does sincerely appreciate your thoughts and council regarding the task ahead of us. i hope we can work together on behalf of the millions of americans, large banks, community banks, credit unions, and investors who are counting on us to build a strong and effective consumer bureau to make the markets work for everyone." you used the word "investors." >> i did, congressman. i have been reaching out to investors -- >> but you said that investment would be left to the sec. >> know, you ask me that if there were a consumer complaint, would it be directed to the consumer protection bureau. >> the answer is in no. >> the answer is no. the investors i have spoken to

are those who invest in financial stocks. i have been meeting with them because i actually believe they are stakeholders. >> invest in financial stocks, but there would also be covered by the sec. >> if you will permit me to explain -- investors in financial stocks want to understand about what faces -- >> i understand. the issue of jurisdiction, who has stressed action over this? you or the sec? >> it is clear that the sec has jurisdiction if a consumer has a complaint. >> so you will stay out of that whole area. is that what you're telling us? >> no, congressman. congress has made that boundary. those who invested in bank stocks, the same way that those who invest in their plan stocks -- >> but that is not your jurisdiction. is that correct? >> my jurisdiction is consumer

financial products. among the people who are interested -- >> i understand that. i thought you had entered the question clearly and now you're backtracking. >> i am not backtracking el. >> does the bureau -- i am not backtracking at all. >> does the bureau provide protection to those who buy stock? >> its is the jurisdiction of sec to deal with consumer complaints about stocks. there is no reason for the consumer agency to be involved, yes, sir. >> so you will stay away from that area. >> we will not go beyond our jurisdiction. >> ok. >> the other question i have is, in going through your

testimony, it says on page 6, fine print in passengers full of legalese make it impossible for the customer to know what is really going on. this is wrong. they should not struggle to understand the basic agreement. would you not agree that the legalese that the banks and credit usance -- and credit unions are using is because of legal requirements? >> sometimes, congressman, the fine print is there because of regulations. >> most of it is. when i practice law in real estate transactions, we had one page. i could close in 20 minutes. now regulation z. in hud 1, multiple pages, it takes two

hours or more. the consumer cannot read all of this stuff. how will you go against all of these agencies? >> congressman, when the transfer date comes and we pick up from the other seven federal agencies -- >> the gentleman's time is expired. we have more questions that we want to get through. mr. ackerman. >> i am buoyed by the notion that anyone who can take the kind of badgering and defend yourself and the agency will be doing an incredible job to defend the consumers of this country. against those who exercise the kind of greed that has been exhibited. >> just a quick question. at the beginning of a last

decade, subprime lending and predatory lending, i asked you if you knew anyone who qualify for a prime mortgage and got a subprime mortgage. i outlined some of the predatory terms. you answered a that you did not the gentleman from georgia offered himself as an example. it was hard to tell what his circumstances were at the time. one term may have made it predatory. i am sure he thinks he is a smart businessman, but they probably snickered and gave themselves high fives when he walked out of the room. but he also said that he could not otherwise get a loan. even after you have now heard the example of the gentleman from georgia, do you know someone who qualified for a prime loan, but consciously picked a subprime loan with the

kind of terms that became prevalent in the middle of the last decade? >> know, congressman, i cannot. >> thank you. -- no, congressman, i do not. >> thank you. >> there is not a lot of beating around the bush in listening to your explanations. one of the things that troubles me -- i do not know how i wound up in your buddies sucker list, but i get a lot of junk mail. there is a whole group of financial institutions in various sectors that send you mail, which are solicitations for programs and offers, and they do not identify themselves on the envelope. there's no return address and

sometimes the return address thais a post office box somewhere. but you can see through the usual window that they have in the such promotions. besides your name and address, if concerns your account at a financial substitution which you have an account at. you're anxious to open it because this is coming from my bank, credit union or what have you and you open it up and it talks about selling you an insurance product or life insurance because you have just refinanced your mortgage or opened a mortgage or an account, which becomes a matter public record. and you think, because of the presentation on the olive, that this is from your financial institution. you can read three pages worth of information and sales pitch before you realize it is from someone you do not know or have a relationship with.

i do not want to interfere with anybody's right to free speech or advertise or promote or inhibit their business in any way, but is meant to be deliberately deceptive to the potential consumer and making them think that this is from their bank. would to be amenable to exploring a method of requiring some form of identification and could i have somebody in your staff meet with me and my staff so that, at least, you know on the all-pro this is from rather than being -- you know on the envelope who this is from rather than being deceived? >> congressman, we would be very pleased to send someone over from the consumer financial protection agency to work with you and see how we can help.

>> understanding is under constitutional rights of the producer to do that. >> congressman, we want to be as helpful as we can. i want to offer one small caveat. we're just getting started. you may have to be a little tolerant with us on timing. >> we are today i am just getting started myself. >> think -- i am just getting started myself. >> thank you. >> i want to start with a brief statement. in your statement, you compare the bureau to other banking regulators. but i believe that is done in a proper comparison. you stated specifically that congress has consistently provided for independent funding for bank supervisors to assure that banks are examined regularly and fairly for both safety and soundness and

compliance with the law. but your agency does not have a safety and soundness aspect or mission to it, does it? yours is consumer protection. so the reason why it other banking regulators have independent funding is because of this safety and soundness function. that is authority. you do not want members of congress with the political aspect getting involved with anything that has to do with the safety and soundness in financial institutions. you have a consumer protection function. the others have a funding mechanism that goes through the appropriation process, unlike your spirit yours is a consumer perfection agency, just like the other ones and should go through the appropriation process. if you worthy -- if you're like the other banking regulators, would do not have a board as a checks and balance as opposed to one lead authority, which is where you are?

all the other ones have boards in their framework. yours does not. i do not think your comparison to bank regulators is the appropriate line. therefore, the appropriation process should be as we said before, having checks and balances for what comes out of the agency. let me go to questions. i appreciate the fact -- you have been commended on your yes and no answers. talking about the little settlement and servicing issue out there right now in the news, is there a difference -- to you believe there is a fundamental issue between penalties for criminal wrongdoing vs mere paperwork violations? is there a difference on how those should be treated? >> congressman, there is an ongoing legal enforcement action --

>> right, that is what i am asking. >> it would not be appropriate for any member of the government, me or anyone else, to comment on what is involved in those negotiations. >> let me ask you this. have you pushed for or advocated a recommended dollar amount with regard to the other regulators involved in this situation? >> congressman, i know that, given the level of problems that have been uncovered with mortgage servicing, the acting director of the comptroller of the currency has been hindered in congress to talk about violations of state law and local law -- >> what about you? you are here today. just tell us what your doing. are you giving suggestions to the other regulators? >> as the government is trying to negotiate with those

servicers that the occ has found have violated the law, they have asked that nobody speak about the content. >> can you tell us what your role is in this? >> i can certainly tell you what our role is. >> can you tell us if you have made recommendations? is that part of your role, to make recommendations to them about dollar amounts? >> of the secretary of the treasury has asked us, the consumer agency, to give advice. the department of justice -- >> so you have given advice -- so the answer is yes. >> on behalf of the american people, they have asked -- >> will the gentleman yield. >> i only have 30 seconds he

left. >> the department of justice has made clear that they do not want people who are part of the government -- >> i understand that. what legal authority does a political point have with regards to this? >> congressman, i think we need cops on the beat to enforce the law. >> great, but we need to know what the law is. can you inside with the authority is to enforce the law? >> we need to enforce the law. >> can you tell us what the losses? -- what the law is a? can you cite what the legal authority is for you to do these actions? >> the gentleman's time has expired. >> i just wanted to thank you for your remarkable public

service and four serving so well in two jobs, as a special assistant to the president of the united states and a special assistant to the secretary of the treasury. i truly do hope that he appoints you to be the first permanent director of this body. you have worked extremely -- you are a chain been, really, for consumers and you have been balanced and fair. i compliment you on your work hand on your testimony today and on the fine job you are doing. thank you. >> thank you. i would like to thank you also, prof. warren. i would say that the duplication in the financial education across the board of the gao study, there is a great concern of the gaps -- if this agency does not have a leader in july and regulations that are moving toward and what will happen there -- they're a lot of players at the table who are

concerned about that. i appreciate you coming in and testifying and i would say that the chair notes that some members may have additional questions for this panel, which they may wish to submit in writing. the record may remain open for 30 days for members to submit written questions for this witness and to place their responses in the record. this hearing is adjourned. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

>> with current temporary federal spending aspiring this friday, congress is working on another measure to last until september 8. we have complete, mines and current scrips of every house session at c-span.org/commerce. >> if you recall, in the 1960's and 1970's, we were writing off of urban america. >> major business leaders working to keep this city the

center of the business world and how new york regain that position. >> with wall street reemergence, new york city was really pulled into the global economy and became america's gateway to that economy and has really prospered ever since. >> was the interview sunday night. -- watch the interview sunday night. >> could it congressional hearing on japan's nuclear plant today -- gregory jaszco said japanese emergency workers at one plant could face lethal levels of radiation while of it -- while advising americans to evacuate a wider area. this is two hours.

>> we have a true expert and we feel very blessed that you could be here until the chairman comes. we will do this by order of arrival, back and forth, democrat-republican. but i will give each member 10 minutes so that we can press on some of these issues without having to rush hour questions.

we are here to give a briefing on the ongoing crisis at the nuclear plant in japan. we will have a second panel including mr. anthony -- oh, boy, senior vice president and scientists.ar vic i appreciate all of our people ticking time out of their busy schedules. i know you're on television, answering questions, really teaching wallace -- teaching all of us the lessons that we have to take away from what is happening. the devastation in japan is heartbreaking. our thoughts and prayers go out

to the citizens there. i just saw tens of thousands in evacuation centers. i am very pleased that the u.s. is providing support to the japanese government. i think we all feel that we want to do our part to help them. obviously, i trust we are giving them our best advice on how to contain the damage. the tragedy in japan is a chilling reminder that we are all vulnerable to unexpected disasters, whether it is an act of nature or terrorist attack or the operation of an oil rig or a nuclear power plant. we have to be vigilant. as a senator from california where two nuclear power plants are located near the ocean and on earthquake faults or near earthquake faults, i am concerned about the safety of these plants and the californians who live near them.

after this hearing, senator feinstein and i will be sending a detailed letter to the nrc. right now, when i would like to do is run through some of my questions, a lot of which are quite general. i also want to explore what other countries are doing in light of this disaster. how many nuclear power plants to we have in america? my and standing is that we have 65 plants, 104 reactors in 31 states. >> that is correct. >> how many plants have similar technologies to this plant in japan? mike understanding is there are 23. >> tavis: -- that is correct. there are 35 boiler reactors that are the same general type. then there are 23 of the mark

one design, which is the plants in japan. >> make sure you would handle something to us on exactly where those plans are, the ones that are similar in technology. >> certainly, we can do that. >> at of oliver plans, not many plants are located on fall foreign -- out of all of our plants, not many plants are located faults or near faults. >> regardless of whether it is in close proximity or not doing known earthquake faults, every single plant is evaluated for seismic impact using the geologic historic records. >> right. that is not my question. that was true of the plant in

japan. very clearly, they knew and they planned. the japanese planned. they planned for 7.0 or 7.5, something like that. am i correct? >> i do not know the details. >> i know what you said to be true. i have two plants. by the way, new faults are being discovered as we -- as recently. in 2008, a study in my state, we came up with new faults. we have written the nrc and we have not had any action. out of all of our plans, how many are known to be near or on earthquake faults? >> i cannot give you a specific answer off the top of my head. clearly, there are some that i would understand using a common definition of "near." the ones in california, i think you can certainly say fall in that category. >> i did not know you have this

info because i do not have access to it at this point. if you could go back and let us know, within 50 miles of an earthquake fault, because that would be important. a number of countries are taking action based on what we have seen in japan. germany has shut down their pre- 1980 plants. i wondered how many pre-1980 plants do we have in america. maya understanding is that it is 25 plants. >> -- my understanding is that it is 25 plans. >> from my recollection, that sounds right. >> do we have the ability to shut down any of those and do an inspection? >> we do not have any plans at this time. because of the licensing basis that we briefly talked about, we believe there is adequate basis to continue operation. >> what do you suppose germany decided to do that? >> i could not speculate on

that. did we talk with them about their nuclear power? do we have conversations? >> we do. >> maybe you can ask them why they took that step. they rely lot, as we do, on nuclear power. favor and askae a them? we would like to know. switzerland is revisiting safety standards. why do you think they did that? >> again, i would not wish to speculate. >> then you let me know. the eu is doing voluntary stress tests on all 143 of their plants on the continent, looking again at earthquake risks, flooding, the age, the type of cooling system, and the ability to counter a meltdown. do you know why the the you would take this step? >> again, i cannot speculate.

>> will you do me a favor -- i would very much like to know why those respective allies of ours have taken this action. you do not have any plans to do anything similar to any of those nations or regions at this time. is that fair to say? >> no. we will certainly do a "lessons learned" as we gather more reformation from the events in japan and the review of 104 operating reactors in the country. based on the information we have at this moment, there is not a sufficient basis to take any immediate action. >> the nrc recommended that americans move 50 miles away from the nuclear site.

can you tell us why? >> the existing recommendation from the japanese government was to evacuate out to 20 kilometers. >> explain the reason for it. >> the reason was because the radiation sources that were being developed because of equipment failure and what we believe is a significant amount of fuel damage. units 12 and three were operating during the time of the earthquake -- units one, too, and three were operating during the time of the earthquake. all of those factors taken into combination, that same type the real logical problem existed in the united states, if that were so, our recommendation to state government would be to evacuate up to 50 miles. >> that is a really good point.

i am asking you -- do you know how many people live within 50 miles of san no free nuclear power plant? >> i do not know. >> i will tell you. 7.4 million people. and we have a state report that says to us and the nrc has not looked at their recommendations, the california energy commission, that they sent. this was what year? 2008. my time is over. i will call on the next. in my second round, i will ask you if you know about the report and why there has not been any action taken. this report, it is my and standing that it is recommended by a republican state senator in

california and signed by a republican governor. yet, still, mike understanding is there has been no agreement by the nrc to look at this report. in my second round, i will ask you more. >> thank you. i think very likely the amendment you and i are both interested in will be on the floor in a short while. you stay here and i will go down. how about that? >> i leader told me it would not be. we will see. >> all right. first of all, i had an opportunity to spend time with zco on the phone. we understand your supplying information technology.

here he is now. >> could you hold off on his time? you're able executive director has held so far and has answered our questions as best as he was able. now we are turning to senator in ofenhoff. we are each taking 10 minutes. go ahead. >> i was saying before you came and that i appreciate your giving me the time on the phone and visiting with me when i called you after this. we will do everything we can within our resources to help the people of japan. thinking closer to home, was pleased to hear that the nrc is

continuing its work and not halting licenses in a knee-jerk reaction. the lessons that we will learn from this -- it is premature to draw conclusions of up the united states nuclear program from the tragedy in japan. suream sure that -- i'm that our nuclear plants are safe. they incorporate a defense in depth approach and have multiple levels of redundant systems. the nrc and the industry have systematic programs. they work together to revise plant protection's in the wake of the embassy bombings in 1988 as well as after september 11.

i remember so well when republicans were a majority and i chaired this committee. no, it was not. it was a subcommittee. i have found out that the nrc had gone -- had gone five years without any kind of oversight. it has been very effective. it was one of the rare times when a bureaucracy has welcomed oversight. i think that is carried on to the present day. above everything else, our concern is safety. and that is your concern also. i agree with secretary to that we should continue to develop new nuclear -- secretary tchu that we should continue to develop new nuclear plants. and the two new nuclear plants

under the moment in georgia and south carolina do not face risk and we should continue to move forward. the nrc and its advisory board of experts declared that it is safe and meets all regulatory requirements. it is appropriate that we move forward with the licensing work and the construction of these new reactors while we look closely for the lessons learned. people are always talking about delaying. we have been delaying for 30 years. i do think that we do not want to slow down. let's keep going. before you came in, chairman, mr. bouchard talked about some of the city things you're doing. how would mention also that germany had shut down some of its plants. it is my and steny -- i could be

wrong on this because i did not have to do it -- have the time to do it -- the vast majority of their energy is coal. so the shutdown coal for the reasons. france is 80% nuclear. maybe it is not too accurate that they are shedding things down for any particular reason. i would ask that the -- what is done before any of these permits are granted? >> we look for a combination of different types of natural

hazards, earthquake, tsunamis, hurricanes -- it all depends on the particular site and what natural phenomenon may occur. that is factored into the review. obviously, for the existing plans, they have been reviewed against those kinds of phenomenon already. >> explain to me what these advisory committee on reactor safeguards -- they rise in different areas -- somehow this one works. what did they conclude about the safety of the ap 1000 design? tell us a little bit about the acrs. >> it is a group of technical experts from throughout the nuclear field. , individuals with expertise in plant operations -- individuals

with expertise in preparations come in front of the commission. >> mr. bouchard, understand that each of our nuclear utilities is taking their review their plans to verify their safety systems and personnel are ready to respond to any adverse event, such as flooding or electricity, black box parade will you please describe this in more detail? >> certainly. the institute of nuclear power operations has implemented an initiative to call the actions done shortly after 911 -- 9/11 that were created, procedures, equipment, and operator training activities that were mandated by the nrc in order to respond to a right -- to a wide range of events. the same types of activities are

applicable for extreme situations and plan for events at a plant site. this is being verified that all 104 reactors, that the procedures are in the standing and the equipment is ready to use. >> i see. one of the concerns i have in this first happened -- i can remember 21 years ago with the exxon velez. i was up there -- exxon valdez. i was up there. we will use this to stop any drilling in an war. i said, wait a minute -- that was a transportation accident. you have to transport more in the incident could increase as a result. then a lot of people were thinking they would do that and it worked. there was a moratorium for a time. the pressure was on and they

took the moratorium off. they have only issued two deep water permits since then. we have a real crisis now. we have four things that have to be part of any mixed along with renewals. i want all of the above, oil, gas, coal, and nuclear. we have this machine called america. generally, do the two of you agree with the statements made by secretary steven chu concerning the safety of our planet? >> we work every day with bill and his staff to make sure that nuclear power plants are safe and they continue to be secured. we do intend, as we go forward, to look at the events from japan and see if there are things we can learn that would inform and possibly improve the way we go about doing our work.

>> so you agree with secretary shu. >> we work independently from the department. of course, in a crisis like this, involving the facilities in japan, we do communicate very closely with the executive branch as we present a u.s. government response in assisting the japanese. >> what kind of assistance has the nrc been asked for and that you are responding to? >> we have been asked primarily for staff people to be provided to provide technical expertise. we have a group of 11 individuals who are in tokyo right now working with the ambassador to japan as well as interfacing with the regulatory colleagues in japan. we have also been asked for recommendations and equipment

and strategies that would help to further improve the situation with the reactors. >> that is great. i applaud you for that. >> thank you, senator. honest to god, i do not know one person who is celebrated on these tragedies happen. you can stand by. i am just saying -- i have heard people say they are worried about this, but i have never seen anybody happy to see bp. you may know different people. i will call on senator sanders next. go ahead. >> thank you very much, madame chair. thank you for holding this hearing in a timely manner that you did. thank you for being with us for being here. madam chairman, in japan, at the fukushima plant, we have seen

hydrogen explosions, reports of high radiation levels and radioactive gases and them are men, possible >> in the containment vessels, hundreds of -- possible cracks in the container vessel, hundreds of people evacuated. we have learned that the centers of people have been potentially exposed to high radiation levels -- that hundreds of people have been potential exposed to high radiation levels. my concern is that, for our discussion today, we need to recognize, as you made clear a moment ago, that we have 23 reactors in our country that are of the same design. in the state of vermont, the vermont yankee plant is the same design and roughly the same age

as the fukushima plant. as i know the chairman knows, in recent years, vermont yankee has suffered a cooling tower collapsed and has leaked radioactive tritium in just the past few years. mequote from -- lesst me quote an article from a share. "the warnings were start and issued repeated late as far back as 1972. if the cooling systems ever failed at a mark one nuclear reactor, the primary containment vessels surrounding the reactor would probably burst as the fuel inside over heated. dangerous radiation would spew into the environment." the article goes on to note that it was cheaper to build in part because it use "a comparatively smaller and less expensive

containment structure." the article also notes that federal nuclear safety issues foundress in this plant design in 1972 and again in 1986. they asserted that mark one reactors had a 90% probability bursting should the fuel lodge's overheat. you mentioned a moment ago countries around the world -- the senator warned us of a knee- jerk reaction and he is right. we do not want a new juror -- a knee-jerk reaction. what we want is a thoughtful look at the events in japan and make absolute certain that nothing like that happens in the united states of america as we do everything we can to help our japanese friends.

people think that a terrible event is unthinkable until the day after that event occurs, right? we have seen this tragically in recent years. we have seen it with 9/11 -- unthinkable, that the large -- one of the largest buildings in america would be attacked, unthinkable that bp would have an environmentally damaging leak in the gulf coast, unthinkable that japan would have the terrible earthquake that it had with all of the reactors now having problems -- unthinkable, unthinkable, unthinkable until the day after it happens. the problem with nuclear power -- this is the problem -- is that it cannot just be 99.99% safe. it cannot be. its potential toxicity, if god forbid you ever had an accident,

it brings far ranging in serious consequences as we are seeing in japan right now. how would like to us the chairman -- ironically, just a few days before the event in japan, the nrc decided to extend the vermont yankee plant, which, by the way, same design and same age, 40 years old, having a number problems in recent years. the vermont state legislature voted by a 24-6 and the senate voted 26-4, bipartisan, not to renew the license of vermont yankee. just a few days before the disaster in japan, the nrc said, yes, we will extend its for another 20 years. so my question is, will the nrc

reevaluate the extension of vermont yankee's license for another 20 years to review the safety of vermont yankee in light of the failures of the plant in japan. -- japan? the idea that we would have a plan of the same design, which, in 20 years, will be 60 years old, i think it is a frightening thought to many people in vermont. >> senator, as i indicated previously, the agency intends to go forward with a systematic and methodical look at all of the plants to see -- primarily based on the incident in japan -- to see if there are any modifications or changes we need to make to our regulations. that would apply to vermont yankee as well as to any other plant. we will not wait until extended time of operation. we will do it right now based on existing operation of the facility.

the license extension that we should is an opportunity for that plant to operate additionally beyond the years of its initial license. but if we do find information that tells us the informatiothio be changed, we will make those changes. >> i can tell you that the people of vermont, before the terrible accidents and earthquake in japan, were very concerned about the safety of the plant. i am absolutely confident in tell you that they are far, far more concerned today and the idea that that plant would be kept open, one which has had a number problems in recent years, open for another 20 years is something that most people in vermont do not agree with. >> we have looked at these plant designs. the primary concern with this type of plant is that it is relatively small -- a relatively small containment vessel. if you to see a diagram of the plan, it looks like an inverted light pole.

in the late-1980's and early- 1990's, research was done to look at this type of situation, what we call a severe accident. when we get to the point where something happens and we have to design the plant again, we get to a significant problem. as a result of those analyses, we made two significant modifications to this type of design. one, we took steps to ensure that we would minimize the ability of a hydrogen explosion, which is something that we have seen in japan with these reactors. the other thing we did was install what is called a hard and vent line. you think about this design and it has this inverted like all that contains the radioactive material. to keep that from failing, you want to keep the pressure down. it is like putting a teapot on the stove. as the t. boilers, you have -- >> i apologize for interrupting.

i have little time left. picking up from the article in the paper yesterday, i want your response. "the warnings were in stark and issued repeatedly as far back as 1972. if the cooling systems ever felt that a mark one nuclear reactor, the vessels surrounding the reactor would probably burst as the fuel inside overheated." does that concern you? >> that is information that concerns me. that is why we have made modifications to this type of design. the event that has been installed is specifically to ensure that we have the ability to reduce the pressure in the event of an accident where the fuel would begin to cause a significant pressure increase. we have made a lot of changes that will help improve the safety of this design. following 9/11, we took steps in each of the nuclear power plants to pre-stage equipment to ensure that, if we were to get this

kind of a severe condition, we would have additional means beyond those things that are already at the plant to provide electrical power, to provide cooling, to really take care of all of the eventualities that we could foresee out there. we believe we have a good system and a good program in place. >> i am sure you do believe that you have a good system and a good program, but i will tell you that i think people in vermont and all of this country are deeply worried by these nuclear salute -- nuclear facilities similar to the type in japan. >> thank you. you're welcome to have another round later today. >> thank you, madam chair for calling us together and finding out what it is what happened -- but it is that happened in

japan. it is breaking the hearts of people across this world. if you look at the calamity that occurred, i wonder how could it happen? my colleague from vermont and i looked at th"the new york times " article and it is start that there were so many warnings before and you wonder how these plans continue to get built. were these models continued to be built after 1972? >> we have a number of these designs that i believe have come into service after 1972. again, i would add that, much as sometimes you fly an airplane today and those airplanes may be planes that are vintages that are maybe 10 years or 15 years

or 20 years old, often, they have been upgraded and systems have been modified. as we get more information, we can better understand what could go wrong. as we do an analysis of the severe kinds of risks that could happen at a plant, we do find that the most significant events is what we see ultimately in japan, which is where you lose the ability to have your electrical power and you lose the ability to have your emergency backup systems. in the united states, we have a special requirement that plants have to have been looked at and analyze the situation and provide an additional type of ability to provide electrical power to the reactor. >> forgive me, an analogy that brings into focus the airplane condition is hardly fair to even suggest. this is of such magnitude.

i think it is poor judgment, honestly, to talk about that kind of analogy. we cannot use any analogies here. we have a situation that is scaring the life out of everybody any place where d at -- where reactors of this design are in place. one of the most noteworthy includes the oyster creek plant in new jersey. what can be done to ensure that 1000% safety that we would like? i remember vividly seabrook of the new hampshire had a second reactor propose their.

re.proposed thei they completely abandoned the facility, decommissioned in 1988. the reason it was abandoned was that there was no satisfactory evacuation route. it is incredible that people -- that it was necessary to spend something like $5 billion to get rid of that facility because, suddenly, they recognize that you could i get out of there if you had an accident. we looked at this and hindsight is always 20/20. but, here, we're looking at what might be. new jersey and oyster creek -- it was closed down for a while. it had nothing to do with the

nuclear facility. are there inherent problems with the design of that reactor? are there other factors to blame? would you be willing to license a new reactor plant based on the same structure as the mark one, the same design as the mark one? >> any decision about any licensing is a very thorough and -- it is a complicated process. i do not want to speculate now that we would license any particular design. >> is it worries some, that design? is it something that you say spells bad luck? that would not be an encouraging sign for a licensee to be able

-- to be successful at. >> senator, right now, we do not have detailed information about what exactly caused the problems in japan. obviously, we know there was an earthquake followed by a tsunami. the consequence in the reactor, the that does not need a tsunami to have happened if the people in 1972 and 9888 -- 1988 recommended the facility. it was not just the weather that got us upset. it was the explosions within the plant. >> as i said, the situation in japan is caused by the hurricane followed by the tsunami. we do not know exactly what

systems were disabled and why. what we want to do is a systematic and methodical look at the situation in japan and see if that would require any changes or to the regulation. i intend to start with a meeting with the commission to begin the process of analyzing them. right now, we have made the required changes to these designs. i would not say the design from 1972 is the same plant. >> was it upgraded in any way? >> they have had significant upgrades. two fundamental upgrades. one was this hardened vent line which addresses the small containment, it lets you reduce steam to the atmosphere to prevent the containment from failing. the other thing we have is these designs have containment which

reduces the likelihood of having a hydrogen combustion. you get rid of the oxygen and without oxygen, you cannot have the fire. these are efforts that have been taken to address some of the severe accident concerns which have seen. >> in japan, they have a lot of experience with nuclear plants and upgrades, i assume were done routinely. >> i am not aware of that and i would not want to speculate on whether or not they attract the same upgrade. >> japan thought their plants were protected against the worst case scenario. but japan was not prepared for this scenario that happened. how can we be sure that in the u.s. we do not have the the plants there that might be demolished or destroyed or and

nuclear radiation released in a worst case scenario? >> we have a systematic program where we look every day, we monitor the safety of the plants and make sure the safety systems are available and they perform their function appropriately. in addition, we have looked to make simple kinds of changes at the plants that can deal with these situations. following september 11, the agency issued orders to all the nuclear power plants that provide an have on hand emergency equipment that can do the things that are necessary in japan now. provide electrical power and provide some ability to cool the reactor core. those were intended to function in a situation where you have

large fires and explosions. our thinking was driven more by terrorism related events but we found as we get the changes they help with the severe accident scenarios. if we were to get to these unlikely events, we believe strongly that we have pre-stage equipment and procedures to do with these kinds of scenarios so that we can reduce or mitigate the impact of the situation like this in the u.s. lacks thank you. we will continue with this. >> after a second round, we will allow our friends to go and have the second panel. >> thank you for joining us today. you have heard me say this.

everything i do i know i can do better. one of my core values is to focus on excellence. as chairman of a committee that has jurisdiction over nuclear safety, my message to the nuclear power industry, george boyd average the previously chaired -- that includes the adherence to safety. 15 or 20 years ago, they were running at some papers and signed capacity in terms of their capacity we're closer to 92% so they're doing better. one of the things we urge them to do is to create a culture of safety. safety withlture of sa an aviation, we focused on safety first. thanks to your work with folks who preceded you, that is the kind of culture that exists in

most of our plants and hopefully at every single one. sometimes i like to quote albert einstein, who said in adversity lies opportunity. i have been to the prefecture. we created a sister state relationship with miyagi prefecture so i have a personal feeling for the loss of life and damage they are sustaining and they have incurred. in that adversity there is the opportunity for us to learn. the opportunity for us to learn and better inform the nrc and inform the the proposed designs for nuclear facilities. ortunity to look at everyone of the facilities starting from the ones that may be most at risk if we had a

seismic incident or tsunami. to put these lessons learned to work. talk to us about how about my work and the other thing, i was in france earlier and i looked at a country where 80% of what tuesday comes from nuclear and where they are participants in an international organization, with the european -- oacd. there was an international organization we're part of. a bunch of other countries and that is an opportunity to share lessons. it should work. talk to about lessons learned and the how do we learned but other countries that are into nuclear energy. >> we have not developed a detailed plan for how we intend to do that but i will meet with the commission to lay out a plan

for how we will do that. it is important we do it systematically and methodically. at this point, we do not know exactly why the things happened in japan that did. there was an earthquake followed by a tsunami. i cannot tell you which of those was more important or maybe something else happened we're not aware of. we want to get good facts and make good, credible, reliable decision so that may take time. i would anticipate we will look at some short-term actions we may need to take and things we may need to look at and medium and long term actions. we will continue to communicate with our licensees in the short term and we're preparing a public communication for them that will go on early next week. to remind them of the kind of systems and components that are important and we have seen challenged and remind them of what their requirements

are and they can continue to insure their affective and working. it will take a little bit of time. the most important thing is we do this right. i do not want to rush into a process that focuses on something that is not the right thing and we wind up missing that piece that is most important. we will start in the next couple days with the commission and bill will have some work done by his staff to begin putting together an effort to do that. >> thank you. in this country, we have al because oft col pollution. we have concerns about natural gas and we're delighted there is a new source of natural gas and there is concern about fracking and the perils that may impose for us.

we have windmills but some are is -- they are ugly and there may be some bird kills. we have folks on concerned about hybrid cars because what do we do with the batteries after we have used them and disposal of the batteries. folks are concerned about hydro electric and what that might do to affect fisheries. there is concerns about the ways we create electricity, legitimate concerns. about the way we generate 20% of our electricity. we need to look at all the sources and make sure we are using a lot of common sense and we have paramount safety in mind as we try to get more

electricity for our country's use. a friend of mine likes to say the cleanest, most affordable form of energy is the energy we never use. think about that. as we figure out how to get more electricity from nuclear or clean coal or solar or wind, one of the things we are missing it is the need to generate savings and reduction. incentivizing people and utilities to use less electricity. a lot of people are -- were not alive when chernobyl occurred. where the problems at three mile

island. just compare what happened at chernobyl with what happened at three mile island with what the folks of japan are going through. a simple explanation of that is possible. >> it is a very serious situation in japan and that will continue for some time. i am hesitant to compare them because we do not know yet how this will play out. i can talk about three mile island and chernobyl. there were different events. at three mile island you have because of mechanical problems and human error, you had a reactor core that experienced some melting. the radiation released from that was contained within the containment structure and their work low levels of radiation that were released to the public as a result.

chernobyl was a different event. it was a very large release of radioactive material in a short time, coupled with an explosion. without trying to minimize the severity of these things, if i were to compare three mile island and chernobyl, chernobyl is like blowing a balloon and popping it with a pin. you have a significant release of that care. three mile island was more like a very slow leak of a balloon over a very long time to the point where you have a balloon at the end. chernobyl, you lost the integrity. >> that is good. when you think about the loss of life at chernobyl come out to you have any idea of how many died as a result? >> there are estimates.

>> is it measured in the hundreds or thousands? >> it is significant. at three mile island, we do not have a direct fatalities we could attribute to the incident. >> hundreds or couple thousand people died? >> a large number. >> the loss of life was what? >> we do not have any we would attribute to the three mile island. >> we have been using nuclear energy for 40 years. any idea of how many lives we have lost? >> add nuclear power plants not hadiation from thwe have any fatalities. there has been some in the industries that support a nuclear power, there have been exposures that produced fatalities or radiation exposures but none as a result of the compartment breach. >> everything i do i know i can do better.

the same is true of the nuclear power industry. that is good but we could do better and we need to and this is a reminder of an opportunity to figure out how to be safer and we need that as well. >> thank you. your comments bear a lot of weight in your subcommittee chairmanship and we look forward to working with you. >> thank you. thank you for holding this hearing. it is extremely important. our prayers go to the families and communities in japan and all the unbelievable tragedy they are suffering through. i appreciate you being here. we spent time talking about similar situations to japan and i want to explore other risks i feel we face as a nation and i want your thoughts on them. i would like to know about

vulnerabilities we may have that come from non-physical threats. not the earthquake, not the tsunami, not physical attack. what about cyber terrorism and a tax? so many facilities are automated and they run on data and computer technology. what are we doing to protect our systems from cyber attack? >> we have a program in place to deal with cyber security and i would suggest -- the systems in nuclear power plants do not rely as much on digital systems. the areas of minimization of the risks from cyber security. we have required our licensees to provide plans to systematically address cyber issues. we are in the process of reviewing those and anticipate

it will begin implementing their modifications and improvements to do with those issues. it is an issue we take seriously. >> what kind of modifications would you make? >> i do not want to get into specifics because of the secure nature. >> do you have the personnel the the? >> we believe we have personnel to do the reviews to look at this issue. it is an area where there is limited expertise. it is one where we keep close eyes on our staffing and ability to do this work. quex are other modifications that have been made or you intend to make to further secure them from hazards? increase intention to replac redundancies'? what is your long-term and short-term plan to secure u.s. facilities today? >> from a security standpoint, we have robust security

requirements in place and the licensees we regulate how of the requirement to have robust security. they conduct exercises every three years to demonstrate they can protect the plants against what we think is the appropriate external threat. in addition, we have required our plans after september 11 to put in place a series the the of procedures and equipment that could mitigate any type of large fire and explosions could challenge the safety systems. we have had a robust security program and on top of that, we have looked at the next level of what could happen in a more severe scenario and require they have procedures and equipment in place. >> if you look at the japanese situation, they had

redundancies, two or three if there were elector problems. they have backup systems and generators but all of the redundancies were disabled by the tsunami and systems did not account for the kind of scenario. what are you doing to ensure the back of the systems we have cannot be subverted? let's say they shut down the grid. but say there is seismic activity that creates an inability for our current backup plans to succeed. is there another level we have not thought through we could add? >> we have thought about it and that is why we put this order in place that utilities would have to think for that scenario where you have some type of incident that would disable the offside electrical power and lead to some kind of significant challenge at the reactor. we require them to have a

strategy in place, equipment that could continue to perform the importance safety functions in the event of that scenario where you lose everything you rely on. all our plans are required to envision a scenario in which they lose their electric power. they are required to have strategies to cope with that and recover the off site electrical power grid or power. the industry has pre stage equipment they could use and transport to any of the facilities in this country in the event this situation were to happen. to some extent, dealing with a severe accident like this at a power reactor is relatively straightforward. you need to be able to provide water and cooling in to the reactor core. that requires two things. some kind of mechanism to pump

the water or circulate the water and requires a source of water. that often requires some electrical power supply. we worked over the last several years to develop those backups to back up to insure that either we can get them to the reactor sites in time or they are in existence. >> msnbc did a report about your review process about risk levels and they highlighted one of the problems is the lob lack of data. the task force said there is planet fragility. what do you plan to do to get the that i need?

>> a publication by msnbc commenting on the work you have done and report that you published an says a task force said the agency has data on what it calls plant fragility, the probability that an earthquake would damage a core for one- third of u.s. nuclear plants. is that true? >> we are updating analyses for plants in the central and eastern parts of the u.s. based on information about the seismic activity. as a result, we are undergoing a review of the earthquake information we have for the plants in that part of the country. that is one of the generic safety issues. i am not isure that is the repot that is being referenced. that is a good reminder that we do not simply always assume we

have all the available information. we're looking to see are the things we can learn and ways we can improve. that is a review that is ongoing but i want to stress that whenever we get new information, the first thing we do is make a determination about whether there is an immediate safety issue or not and we look at that information, we determined the there was not an immediate safety issue. it is something we want to look at and what may come out is the need to make modifications to the facility and if that is the case, we will make those. >> can you explain about the reports you have made in terms of what risk levels are, risks between one and 100,000 because of seismic activity? >> the new nuclear power plants, we have a much more sophisticated analysis for seismic events and looks at

different earthquake scenarios. looking at those things we think are likely to occur with a frequency of once in 10,000 years. that gives us the basis to figure out what are the right approach is to safety at the plants. the existing plans are reviewed and licensed to a different standard. we looked historically in an area of 200 miles around each plant and we looked to see what is the maximum earthquake that could occur around those reactor sites and we designed the plant to do with that. >> can you retrofit and enhance or make them safer in light of that review? >> if that is what comes out and necessary, that is what we will do. >> how long does it take? >> i anticipate we will doing

over two years. >> once you conduct the review, how long does that take? >> it depends on what kind of changes we need to be made so i do not want to speculate. that would take place over a year or more as we get the information from that. i want to emphasize we did not find any immediate safety concern with the plants as a result. it is an effort to enhance our knowledge and as we get new information, we want to evaluate. >> thank you. >> we will have a second round for you. i am sure you are thrilled. i want to associate myself with my colleague senator lautenberg when he said do not compare what happened in japan to a problem on an airplane. >> i was not comparing the problem. i was suggesting in the way

that older vintage airplanes often get updated and continue to fly. nuclear power plants are the same that they have been modified and upgraded. i was not comparing the situation in japan. i apologize for the confusion. >> thank you. you said something -- dealing with a reactor like this, i assumed the one in japan is straight forward. you have to cool it down. why were they not able to cool it down? what went wrong? >> i do not want to speculate. my responsibilities are to the u.s. nuclear power plants and the facilities in this country. we have looked at these scenarios and looked to see we could provide the kind of systems and procedures that would allow us to do with these

very unlikely events. i do not want to speculate on what happened in japan. >> i am making a point. you brought it up. dealing with a reactor like this is straightforward. either you're criticizing japan because they did not understand that which i find hard to believe but i will not go further into it. it leaves questions. in your absence, i ask your executive director to answer the question and he did not have this answer, he was going to bring it back for me. maybe you know what because it follows up on what senator gillibrand is talking about which is the earthquake zone plants. this is a large country. i do not get why we have so many plants on earthquake faults. i do not get an answer yet. how many plants do we have? the two in california are

sitting on or close to or proximate to earthquake faults. do you know how many others are situated? >> the way we look at this is we do not think about it in terms of faults. we think in terms of seismic activity. >> how many are near seismic activity? >> we have low, medium, and height. >> how many? >> we can get back to you. the plants that are in the high side is relatively small. >> i want to know. let me tell you why. i do not know of you saw this today. california tsunami could come with no warning. it quotes john parrish and he said "mother nature is notorious for not obeying rules that we make."

this plan was built to withstand a 7.5 earthquake and a 9.0 happened. for good about the japanese earthquake in general. given the stakes, do we know how many japanese have been evacuated from their homes? >> i have seen some reports of amounts in the several hundred thousands. >> several hundred thousand. i pointed out before you came we have 7 million within 50 miles of san onofre and diablo.

that is a lot of people living within 50 miles and i pointed out you have wisely suggested to the americans they move away further than 50 miles. you are talking about something that could happen of such a proportion that this country has never seen before. >> heard nuclear power plant is surrounded by 16 million people. is that right? 60 million within 60 mile radius. this is not just an academic conversation. for me, we just sent a letter to you asking for inspection of our plants. i want to ask you something that he was not familiar with.

are you aware that a california energy commission report said that san onofre could experience more earthquakes than the maximum seven then designed in the '70s. >> i believe we have that report. i will confirm that. >> i want you to go back and read it again. our understanding is that the nrc has not taken any of that report into account. >> i will take that back and see what we have done. >> we will ask you to do the inspections and comment on why nothing has been done. as a matter of fact, the licensor is going on right now. is that correct? for diablo.

we know there is information that tells us that diablo, there are seismic studies that showed there are a few faults that were never known about. yet you are going ahead with the licensure. the utility will not have that new study ready for three years. i have to be totally straight from the heart with you. what has happened is a tragedy that has unfolded. it is out of control. we all feel that our hearts are heavy for the people there. we also have a responsibility to our constituents. that is my highest responsibility. all of us, that is what we are

here to do, protect them. i do not have the answer on how many plants are dear earthquakes. you will get me that information. the fact that there are any disturbs me. the fact that a tsunami could come with no warning worries me. the fact that no one predicted a 9.0 worries me. and that i have multiple millions of people to worry about and i cannot look them in the eye and say never. i think, right now, you are doing nothing new. not one thing. i have not heard anything. i look at what germany and switzerland are doing. none of them are panicking. ok, let's take another look at

these places that have a seismic activity. let's shut down the ones that are pre-1980. i do not hear anything pro- active. why should i not worried? tell me why i should not worry. >> as i said, we are going to be looking at what happened in japan. we will take action if necessary. we are not doing nothing. in addition, we do have inspectors at our plants that are there all the time. we have at least two inspectors. we are constantly doing inspections. the other thing, it is something we look at. i share your concerns. the people have the same concern you do. it is for the american people. our responsibility is to ensure

they are protected. the men and women who come to work are some of the most dedicated. >> i do not question them. i am not questioning that. they are heroes in a time of crisis. what i am saying is the policy makers back beside. this is an extraordinary event in history. in history. turn of the tv. look at the faces. we already know one thing. please tell me if you think i am wrong. we know there was a 9.0 earthquake and that it was not predicted. the cushion that was built in that there to make sure things, as you said, just cooled it down, it could not be done. i am not asking you why but i am

saying to you, shouldn't we be humbled that there was a 9.0 earthquake in a place they never sought it -- saw it? say i represent the american people and i want to make sure and i am going to back to every plant and not wait two years. going to issue anything unless we assure that we go back and retrofit. is that too much to ask? just to look at the plant that our old -- are old? i think what we are asking is not for some major breakthrough but just can we take another look and put the timetable be hi

dick had to do the immediate inspection and not say we are waiting for japan because this is what we know. they did not predict that earthquake. they did not build enough cushion. as far as i'm concerned, what we know to be straightforward could not happen. i guess i need reassurance. >> as i said, we are going to move forward with the review of the information in japan. again, i do not know the system in japan. when we look at these earthquakes we do not take the maximum. we look with the historical maxim is and add something to that to make sure we have captured the uncertainty. we do not stop there. we know their baby things we have not identify, analyze.

we have a robust program. >> when you say that in this industry? >> one of the most robust in the country. >> my time has run out. the two plants in california were built with 1970 assumptions. it is 2011. i am telling you there is a report that calls attention to problems at both plants. i am not asking you to answer me now. you will get a letter from us. we want to have those plants inspected. we want reassurances. we want you to look at the state commission. we're going to follow this up. i am looking to you for more than i have gotten. maybe i have missed it. if i did, for give me.

i cannot mince words. i have plants with millions of people within 50 miles that were decided the 1970's. idg tape -- to take a look. >> with the frustration and you hear, it is coupled with fear, a fear for our families, our society, the magnitude. when you see the magnitude problems, the magnitude, the inability to do anything that gives immediate relief, it is a frightening scenario. with that, should we study our

evacuation routes? what is a safe distance from a plant for families? have we found changes in climate relating to the ferocity of storms, frequency of storms? an earthquake, we do not know the predictability. we know there are faults and there are places that are susceptible. how do we cope with that? the we have to go back and say, look, we learned something here. a terrible lesson. we do not want to have anything like that happened to people in our society. we do not want it -- wanted to happen to people anywhere.

we have these plants throughout our country. are they in such isolated places that there is a cushion of distance that can protect them? what do you think about those things? >> i think those are important issues we want to take a look at. again, we want hard facts about what happened in japan. what are the things that worked well and what did it. what we have that we will to systematic review and look at changes that are necessary. i have never seen it this agency shy away from meeting to make a change. we have made it new requirements over the last 30 years. anytime we get new information, we discussed the new seismic data. we recognized it was something we needed to look at.

we are currently in the process of dealing with a safety issue that we referred to as gsi 191. this is something that when we looked at these plants we had made a non-conservative assumption about how they would be paved. we have made the plants make changes. we take new information and work it methodically. we make changes. that is what we will to in this case. >> this fire alarm has gone off screeching for help. siuld there be warehouses tuated? can we be comfortable enough that changes in design and

exercises, i do not know what you have to do when we saw, there is no doubt that the greatest danger came from the earthquake itself, from the flooding, the tsunami. that was far away the most painful thing to have happen. but what do we do, are you concerned about climate change in any way that affects the conditions under which something like this can were sent? >> we are always evaluating information and changing -- local changes can affect the operations of plants. where is there are changing weather conditions that require

changes, we make those changes. all of these issues you are expressing, those are the same kinds of things i worry about and work to make sure we have the right programs in place. it is something we focus on. it is what our mission is, public health and safety. we try to go about that in a way that is well grounded in a good technical information that is well supported by decisionmaking. that is what we will continue to do with this incident and then the others. >> how close where our warships when they turned around? >> mine understanding was there were some naval vessels that were 100 miles off the coast of japan. they received some low-level indications of radiation that

was not unexpected and was consistent with the kind of process going on at the reactor to keep it cool. those shifts were assisting a search and rescue operation that involved helicopters going back and forth to areas closer to japan. the situation there is something that was a prudent response. there was no direct radiological harm. >> there was a reason they turned around. it was not that the helicopters could fly that distance. 100 miles. >> the indications we had when they picked up radiation was about 100 miles. i do not want to speak -- >> it was about 60 when they turned back.

>> i am not familiar, i do not want to comment on what the activities of -- >> the point i'm trying to make is that even at that point, 60 miles away, they said, in order to protect our crews, 60 miles away, does that tell us something about the kind of risk that might exist when you have a committee of this magnitude? >> what i am aware of our radiation detection of distances that were approximately that amount that were not harmful. the analysis we have done it tells us that the areas that

would be protection from a public health standpoint is about 50 miles away from the reactor. >> that is a large distance. in a crowded state like yours and mine, or most places in america, it tells us we've really have got 1000% assurances that none of the plants that have any questions raised are but dup really tight -- button ed up really tight. we cannot withstand this kind of assault and humankind -- on humankind.

what we know that these ships turned around. and with wind currents and sea currents and everything else. there is a lot of unpredictable here that would have us -- it is discouraging to see a country so dependent on nuclear energy fall prey to this. the price is not yet fully understood. i would urge you that some hastily prepared information is essential. by thank you for the work you are doing. we have an inferno in front of us and we have to make sure we

can do everything we can. >> thank you, senator, for your comment. i note this was not easy for you. i know how hard it is. we have a responsibility. i know you agree with me on that. to make sure we to everything, to do more than we have to do to make sure we are safe. so much is at stake. but i've looked at the list and saw how many people live within 50 miles, it is millions and millions of americans. i have one quick question and you can go home. >> i am far from going home. >> are you part of the team that is monitoring the air quality coming out of the area? >> there is an effort by the government to look at the

ability to do monitoring with assets of the u.s. government. those are not in our assets but are part of a government response. we have been working with the administration. >> can you tell whoever heads that up, would you please keep us in touch as far as the air quality and the amount of radiation in the air and how the wind is prevailing. >> are you referring to in the united states or in japan? >> in japan. >> we will provide that information. >> if there is any change in what you see, if you would make sure our staff knows what is happening. i look forward to your responses on the number of plants around

earthquake faults. i look forward to your answer from the letter we sent to you. we look forward to working with you to ensure the safety of these plants all over the country. now we are going to go to our panel and two. we have very knowledgeable people. anthony -- did i say that right? senior vice president and chief nuclear officer at the nuclear energy institute. a the senior scientist for global security at the union of concerned scientists. if you could speak to me for five to eight minutes on what you think of this and where you see us and any steps you think we should be taking.

we will start with you. >> thank you, senator. i sit on a committee of officers in the industry. we have conferred the this week and agreed to take action. before i get into that, first to the people of japan, our friends and colleagues there, our thoughts are with them. their actions are heroic. i cannot pretend to understand what it is like to try to do what they are doing in those conditions. it is a heroic effort. our priorities remain providing japan with the support necessary to retain safety at the fukushima reactors. even though the full extent of damages and no, these events represent a challenge to the and -- integrity of our plants. as more is learned, more

correctives can be developed. we recommend each -- each of the following actions be taken. including the loss of the significant safety systems due to natural events, fires, and other explosions. specific actions include testing equipment required to mitigate these events and verifying the qualifications of operators and support staff. the second action is to verify the capability to mitigate a total loss of power. this will require inspections that all materials are adequate and the procedures are implemented. the third action is to verify the capability to mitigate the

total loss of flooding and the impact outside and inside the plant. it includes verifying materials and equipment are properly located to protect them from floods. action four is to perform walk- downs on equipment. and to identify the potential that could be lost during a seismic event and develop strategies for potential vulnerability. i think i understand your concern because i share it that people are seeing what is happening in japan and they are scared. we can never say that could never happen here. there is no such thing as a probability of zero. i will not repeat all of the things that have been said about the bigger of regulation and the standards in place.

i agree with all of that. i would tell you it does not matter how you get there, whether it is a hurricane, a tsunami, a seismic event, a terrorist attack, operator error or some other failure. it does not matter. we have to be prepared. i think we understand that. we have no fatalities due to radiological releases. we are proud of our safety record. many of your -- your constituents work at the plants. i have been to both sites. i know they are committed. our hallmark it is to learn from experience and to apply its going forward. that is how we will make sure that even in the remote possibility something like this could occur, we will apply the experience we get out of these events and make it less probable that this will occur.

thank you. >> thank you for your words to the people of japan and to our workers. we know they are the best. the issue is not our workers, the issue is to make sure we are doing everything. i know you agree with this. to make sure that they are not exposed. i thought your words were beautifully said. >> on behalf of the union of scientists i would like to thank senator boxer for the opportunity to provide our views on the fukushima and its implications on this country. we would also like to extend our sympathies to the people of japan during this crisis. while the situation should remain the focus of our attention we should not hesitate to ask whether we are doing all that we can do to prevent a

nuclear disaster from happening here. i would like to say that we are neither pro-nor anti-nuclear power. in the aftermath of the three mile island accident, to correct many of the regulatory weaknesses, the commission and the industry avoided learning any lessons from the far more severe chernobyl accident because of the claim it could not happen at a plant of western design. it cannot hide behind the -- that excuse. we have plants of the same design. we have plants that are just as old. we have a system that is not superior to that of the japanese. we have had extreme weather events that had defeated are planning measures like hurricane

katrina. we have had close calls. we have had a full-blown disasters in other industries like bp. we have suffered a terrorist attack against our infrastructure. i would ask the committee to imagine the crisis unfolding in your home state and wonder if this is something americans should have to and door. the answer is no, which is the right answer, it is incumbent on the committee to investigate whether an american fukushima is possible. even though it will be a long time before we learned the lessons from the disaster, it is not premature to take steps to reduce vulnerability that have been known by regulators but not addressed. a few examples. fukushima has caught fire and released atmosphere -- radiation

into the atmosphere. explosions have breached buildings around them. we have similar situations that are far more densely packed than full kishi -- fukushima. we must react quickly to reduce the heat load and the radioactive inventory. >> your first point is about your recommendation. i will ask you to comment. i do not expect you to give the definitive answers. if you fill these recommendations are in the realm of doable or if you do not agree. you remove -- call ahead. >> in the u.s., we have densely packed fuel pools. packed fuel pools.