this we approach safety culture in the dawn of a new era especially in vehicle safety. thank you all very much. [applause] >> all right. david has agreed to take five minutes' worth of questions. >> hi, david. i'd like to thank you and your agency so much for looking into rental car safety. >> yes. >> and i know that ntsa doesn't have direct jurisdiction over the the rental car companies unfortunately because i wish that you did. but wanted to thank you for that and see if you could just comment a little on that. ..

there is real risk here that could hurt people or kill people. i know there legislation last

year, one of the bills had to the provision. i would love to see that authority be provided to this agency. i know the secretary is very interested in this as well. they are a sophisticated group of business that can get this done. [applause] >> i used to run the new jersey lemon law. we dealt with recall and defect issues. i bought a ford affusion hybrid, and we had a toyota problem at the time. i got panicked one day on the road after i was mocking all of my friends that had the toyota prius, and my fourth fusion actually stopped. there was no power to break it. i know you deal with this kind

of thing. hasn't been clearly resolved for hybrids? -- has yet been clearly resolved for hybrids? toyota seems to be the only problem with the breakings situation. >> thanks for the question. i would definitely suggest that people with this issue go to our website and fellow to the owners questionnaire if you have this issue. there is a difference between switching over to the hybrid electric engine. sometimes when you have a switchover, there is a feeling of deceleration. you are accelerating, but you are not slowing down as quickly as you would like to.

whether you are on a hill or incline -- >> it can be a frightening thing. i was not going to get killed. >> my parents had a brand-new car, and experienced it. ford and other models -- please let us know if you're having the problem. we will take a look at it. >> they went from a leaking into a prison? -- lincoln to a prizm? >> i am very effective. [laughter] [applause] >> can you speak on how the fuel

economy standards have been affected by legislation that would block the epa from regulating greenhouse gases? >> we will get the party plan soon. that is my understanding. we will have it posted on our website very soon. it is coming. we will take a full look at it. in terms of the work, i will say this, and i will make it very clear. fuel economy needs both federal agencies in the states together to work together. air conditioning -- we need to the epa and their authority to give the most complete picture to make sure we can save the

most fuel and a -- reduce the greenhouse gases as much as we can. i know from the president, the secretary, and die, we stand shoulder to shoulder on this. the only way we accomplish the maximum gain and make sure you have the safety vehicles that the agency stays in the role and does this together. we are working hard every day to get this timeline done for the proposal. our staff is talking right now. >> thanks very much. [applause]

>> we will get started with the next session right now. because we like getting people out on time, we are going to start right now. >> thanks. it is my honor to introduce d.c. commissioner.

i have been in washington a number of years, and i have seen people come and go. usually when people talk to me, i am angry or frustrated or disappointed. i get excited, and then i get disappointed again. we battle with the administration and congress. we battle consumer advocates. we are committed to make sure they are protected. we have seen over the last decade all of the terrible things that have happened to consumers. everytime i get angry or frustrated, i think about the people in government who are our friends. they are dedicated as consumer advocates to making sure this world is a better place. we want to protect consumers from the worst practices we have seen. we smile and can feel better

about the world, when i know that one person is at the sec. i think that deserves some applause. [applause] we cannot have a better person than julie there. she is appointed for the next six years. thank goodness. she is the first commissioner in recent memory whose primary expertise is in consumer protection. she is an expert on anti-trust matters. she created the best fare credit report law than we have seen pretty much ever. she and her fellow comrades in that state -- state of vermont and have done great work.

she also has lectured at columbia university school of law. she was the assistant attorney general in the state of vermont for over 20 years. shi'ahs received several national awards. and has served on main national panels focused on consumer protection such as pharmaceuticals, data security, and tobacco. please join me in welcoming her.

>> thanks. i am honored to be addressing this group. i see so many of my good friends around a room such as aarp, consumers union, and of the consumer advocacy groups in the trenches every single day doing amazing and critical work. i also want to a knowledge my former colleagues from the state offices and my new colleagues that are here today. a special thanks to the industry representatives attending. you are some of the fiercest allies that consumers have. you understand that the pro consumer is by definition pro- customer. that is good for business. a common refrain heard in this

town from politicians giving speeches is i am one of you. i do not get to say that very much, because i am not a politician. today is different, because i am one of you. i remember work that was done since the teddy roosevelt on administration. when i first started doing consumer protection work, which seems like 100 years ago, one of the great challenges we face was making sure that every household gods of their annual sears roebuck and company catalog in terms -- in time to mail in the order by the holidays. those were the simpler times. there was not a shortage of

thieves during that time. out of town newspapers warn travelers to new york city to avoid the gentleman that would sell sections of central park to foreigners. [unintelligible] they talk about cities invested with the scum of pickpocket nurse -- thieves, pickpocket, scoundrels. they have always existed but

today they come out of so many different directions. a consumer who moved his wallet to his inside pocket, steered clear of dark alleys, and arm themselves with moral fortitude could probably navigate the marketplace relatively intact. today's consumer is fall -- vulnerable online, over the phone, and even in emails. it is addressed as a beloved aunt molly. croaks do not just pick pockets, they pocket pictures shot with children, they fish for passwords and crushed credit ratings. they are in your computer, on your smart form -- smart phone, in your doctor's office, at your

kid's school, and at your bank. there are so many more avenues for them to pursue their scam. those of us in the government charged with consumer protection have to adopt a multi-level approach if we are going to throw up roadblocks on every one of those avenues where the cammers are. we are trying to determine how best we can do that in a fast and technologically advanced marketplace. many are thinking about the opening day of baseball. the anticipation of the first crack of the bat makes it difficult not to think in sports metaphors.

i would like to talk about the need to approach protection with the team work, coordination, and the solidity of the great double play combination. for those not steeped into 20th- century baseball trivia,, the players i mentioned were chicago cubs when they won it chivvying ships. -- championships. they were known for a famous double play. joe tinker caught the ball. nobody ever won without a star

shortstop. it requires lightning fast reaction, a keen sense of where the batter is going to put the ball next, and a deep understanding of the strategy of the game, and the ability to handle anything they hit at you. g's are like the shortstop. they get the consumer complaints about everything. through their complaints, handling, and mediation services, they try to resolve each case, getting a refund here, or a contractor to complete work over there, or stopping a foreclosure down the

block. they often hear about the problem that consumers are facing before we do here in washington. multiple state components will work together to tackle a nationwide problem. for example, they worked together to take on tobacco companies that marketed to kids in failed to disclose the health threats that the cigarettes compose. some told that the drug they were selling could do much more than -- much more than it really could. and they also dealt with the issue of some companies charging fees that cannot be justified. with the help of people like

you, my consumer protection family, i have been able to work on this. i have been honored to serve as a commissioner with the federation -- ftc. my consumer protection family is still right here with me, helping me and my colleagues take on the tough issues that impact consumers throughout the country. i am often asked about the difference between working with the ftc and the state a.g's. the ftc is the second baseman, johnny evers. his role as complex in the class a double play. we catch what the consumer's cost us by following up on local trends into taking the campaign against them national.

we campaigned on issues such as online privacy, credit reporting, green marketing, telemarketing, debt collection, and competition in health care industry. we are fighting in abusive deal between pharmaceutical companies that keep low-cost generics often of the market. it is costing consumers $3.5 billion per year in higher drug costs. we give consumers the tool and the information they need to protect themselves from those trying to steal second base. there are programs like the do not call list, which is the most popular government programs since the elvis stamp. [laughter] one thing that every second baseman has to watch a lot for is the runner.

they come at second base with the spikes up. the economic downturn has provided that opportunity for schemers trying to squeeze the last dime out of a financially strapped consumers. one of our goals is to get these sheets out of the game. and action was announced against countrywide home loan. we claimed that there'll loan servicing operation charged homeowners who were behind on their home mortgages, outrageous fees that added up to thousands of dollars per consumer for such routine services as lawn mowing,

which was meant to protect the lender's interest in the property. the mortgage market imploded, and countrywide profited as more homeowners fell delinquent. millions of dollars were retrieved from countrywide and we are working on returned that money to consumers. just this december, we broke up a massive internet marketing rain that targeted consumers desperate for cash. the ringleader, and jeremy johnson, created a tangled web of over 60 shell companies that lord consumers into trial memberships. there was a grant to getting to work at home money-making scheme.

services were never rendered. he got to under 7 $5 million out of these customers. johnson led a life of luxury. he had expensive cars six helicopters, three airplanes, several high in the properties, including an extravagant home that cost $8 million to build and he had a taste for high stakes gambling online and in las vegas. him in thistely got case. we shut down his operation and froze his assets for future distribution.

[applause] our staff was really fabulous on this case. the second baseman will frequently get this out with the help of a shortstop. the ftc fight some of its biggest battles in the state. we announced operation empty promises. we targeted schemers like johnson, who falsely promised consumers that they could make thousands of dollars in a guaranteed job and a work at home opportunity. it included three new enforcement actions, 28 actions by the state attorney general, 48 criminal prosecutions by the department of justice, and seven civil actions. we also have worked with seven

of our state partners to with the aid -- when a final judgments, responsible for getting tens of millions of dollars from consumers into the pockets of scam artists. we carried out operation health- care hostile. it was a coordinated law enforcement scheme involving a total of 54 lawsuits and regulatory action against sellers of a phony medical discount plans that masqueraded as health insurance. together, the ftc and the state have targeted mortgage modifications and foreclosure rescue schemes that prey on desperate consumers who are in fear of losing their homes. defrosters collect large up- front fees in exchange for the false promise that they can

prevent a consumers foreclosure. since february 2008, the ftc has brought many actions on foreclosure rescue and modification frauds. more are in the works. we have cooperated with ever stayed problem -- partners and. -- state partners. over the past decade, we have brought 260 cases to stop debt relief providers in deceptive and abusive practices focused on consumers in financial distress. because we have seen a spike in the amount of harm caused to consumers, we promulgated regulation that would require those that pitch mortgage

assistance in debt relief services to deliver on their promises before they can collect one dime for -- from consumers. i have been impressed with the values saved with the corporation. i have seen this at the management and staff level. on many occasions over the past year, friends from the enforcement community have commented on our efforts to coordinate with the state in enforcement initiatives. this is exactly how it should be. i am very proud of this accomplishment. it is great when the shortstop and second baseman work together. but it usually that will only give the team won out. there is a new player on the team.

the consumer protection act has given us our new first baseman. our frank chance. the new agency charged with protecting consumers in the credit and financial markets. i know some of you will argue that playing first base is for big hitters that cannot handle the outfield. i disagree. as the first baseman of the st. louis nationals wrote nearly 100 years ago, the couple first baseman will need all of the speed, the arm, and the head he can press into service. let me add to that. the reached. -- reach. he should have long arms.

he will never will making authority. the bureau has a right to examine the books of most of these institutions enforce the law against them if they are found to be in violation. most importantly, the bureau will have a substantial budget, equal to 10% of the federal reserve budget and automatically delivered without having to go through the appropriation process. that gives every other governmental agency, including mine, budget in may. the bureau will also inherit hundreds of consumer protection employees from other agencies and will hire 100 more new ones. that does not mean the bureau will be working alone.

the fcc into the state a.g's will work together -- ftc and will continue to work together. the bureau can reach some of the players that the ftc and the state cannot. in particular, large, federally chartered banks.

the ftc retains its entire jurisdiction as to the state a.g's. in addition, there is enhanced rulemaking authority regarding automobile dealerships. several of you here today have told me that you have seen abuses in the auto-financing industry. not as many as we saw in the mortgage industry. premiums and undisclosed add-ons in fees. the ftc announced that we will be taking a good hard look at those sorts of practices in order to protect car buying consumers. some are worried that there are many areas in which the bureau and these agencies have overlapping jurisdiction.

while i understand these concerns, i would like everyone, consumers and producers have strong interests to ensure a fair marketplace with ample choices, fair prices, and accurate information. business is playing by the world do not want skimmers to pick the pockets of consumers. the action of consumer protection agencies are not aimed at shutting down businesses. we are clearing the frauds out of the marketplace so that honest businesses plane by the rules can continue to serve their customers. consumers can feel safe and secure when they shop on the corner, at the mall, or online. unfortunately, there are so many that we need to

take out, that the ftc and the new bureau will be far too busy to double-team legitimate businesses. they are requiring us to put a level of understanding in place to make certain that neither government or business and resources are wasted. we will not be turning inning double plays against businesses that play fair, because they are on our team. these are hard times for american consumers. the wave of technological innovation that has brought so many exciting ways to communicate and work and of recreates also carry new

opportunities for skimmers to take the last dollar from these consumers. protecting vulnerable consumers is not a game. baseball has served as a metaphor for american life almost as long as apple pie has. consumers need to be served by a team that is coordinated, powerful, in a successful as the double play trio of -- and that i just mentioned. this can be that team. thanks again for the invitation to speak to you today. thanks for listening. most importantly, thanks again for the work you do. i look forward to working with all of you in the coming months and years. [inaudible]

[applause] >> we have time for two questions. >> can you comment on the practices that you were commenting about? >> i have been meeting with a number of consumer groups, industry players, who have raised some very interesting and a troubling concerns all lines of undisclosed financing is construct did not realizing they

will be rate, charged, dealing with these add-on fees. many of the practices that we have seen in the mortgage industry as you mentioned, the the -- we will hold a series of round tables in detroit. we will bring together consumer groups, consumer advocates, industry players, financing people, to talk about some of the things that we have been seeing. i want to mention one aspect of this. it is the impact on the

military. we have heard a lot about the practices of dealerships that seem to rain on military bases. you can see a lot of the auto dealerships around them. a number of them are having their first paycheck for the first time and may not be as educated as we would hope they are on how to purchase an auto and make sure that it will be a purchase worth the money. then they go overseas and start dealing with this purchase that can affect military readiness. it is something on their mind. their car may be taken away. they are going to be away from their family. i know holly has been thinking about a lot of these issues. we have been in the bureau as

well. we are trying to look at all of these issues through our workshops and tried to determine what kind of rule making we should be engaged in. >> i am with the national consumers league. i direct a fraud center there. you mentioned working with the city. they are doing amazing work mmers.day to shut down skimmerca we are working on the ability for the agency to go after them overseas. i was wondering what you have seen in coordination with the department of state and what you are doing now, and what you think could be doing better on problem. >> that is a good question.

was everyone able to hear the question? it was about what we will do about focusing on scammers overseas. an act was designed to clarify that the ftc had full jurisdiction over online scam artists, who are affecting u.s. citizens. they are entities outside of the country that are obtaining money inappropriately from consumers from the kinds of scams we are talking about this morning. we have full jurisdiction to go after them. we also want to work with partners in other countries, whether they are seeking information about u.s. players affecting their citizens or whether we need their help to go after the people out of the country affecting u.s. citizens.

we recently brought a case involving privacy issues with respect to a company that was here in the united states that was affecting united kingdom consumers. we have a pretty good track record of dealing with international issues. it is a huge problem. i am sure there are many people that would lock -- would like to do more. i think the tools that we need to start that kind of activity should be put in place, especially with this act. little bit more hampered because we do not have those relations with international affairs that words very hard in this area. a.g

do not have that luxury. we need more tools to deal with things on the international front than global players. >> let's think julie once again. [applause] hos[captions copyright national cable satellite corp. 2010] [captions copyright national cable satellite corp. 2010] [captioning performed by national captioning institute] 11] [captioning performed by national captioning institute] >> next, the weekly addresses by

president obama. later, a form from the consumer federation of america. president obama is currently on a four day visit of and plan american country. he will deliver a speech on rio de janeiro on u.s. and latin american relations. tuesday and wednesday he is in el salvador, where he will meet with the president there, before returning to washington. continuing coverage of his trip here on the c-span network. the ford museum recently held its first symposium on ethics in america. they look at how they handle ethical issues. ford talks about how his father dealt with the dilemma at

watergate. it will talk about the the leaking information to reporters. this is one hour and 20 minutes. >> from a teenager in the white house to a most interesting career. sometimes, he has been a cowboy, a businessman, corporate spokesperson, and motivational speaker too many audiences. when gerald ford was sworn in as the 38th president of the united states, steve and his three siblings steadily went from the kids down the block to the only kid on the block on the 1600 pennsylvania avenue.

this life was intense and not always easy to handle. but he has survived and thrived. he is here to give as an insider view of his father and to share with us the lessons he has learned, as the son of the president, and as a successful figure in his own right. please welcome the chairman of the gerald ford foundation, steve forbes. [applause] >> welcome, thank all of you for being here. i think everyone for their help in putting this program on. >> that if they were here would -- if dad were here, he would tell you this is what he wants, to create a place where this

becomes the towns where were we all come together and discuss ideas, one side versus the other. we find out what we think about different issues, and the topic tonight, ethics, certainly is a moving target. i am not sure i am quite qualified to be up here. i guess to sort of dropped the drawbridge to my soul, 18 years ago, i can look backs that my life, and ethics was certainly a big part, because a that time i was struggling with alcoholism. i found myself in many situations that i would look at today and think that is not ethical behavior. so i come here today with my own stories, but i am glad to say 18 years later, i have 8 -- 18 years of sobriety and a good 12 step program, and a great mother who help me get through that time.

i come as a humble human being who faces these ethical choices everyday of what we should do, what we think about doing. it is a fascinating subject. we could spend hours, obviously, on this and it could go on for days. you have medical ethics, government ethics, the golden rule. it is a fascinating subject. sometimes it is a dilemma. it is a moving target. sometimes it concerns the law and sometimes it does not concern the law. i am fascinated by the subject. you think about the old story of robin hood, stealing from the rich and giving to the poor. it could make a case that his stealing was unethical, but giving to the poor was moral. you could make a case for a spouse cheating on her partner in a marriage.

obviously unethical, but probably not breaking the law. so sometimes the law is involved and sometimes not. sometimes there might be a law that would dictate something about it, but it is never prosecuted. it is a moving target and a fascinating conversation for all of us here tonight. when i thought about this subject, i thought what were some of the most recent situations that ethics get involved in. i think the recent financial meltdown in the last several years, and banks and loans and institutions like that, and it works both ways. you had sophisticated loan officers who were dealing with unsophisticated applicants for a loan, and convince them at times, not always, but at times to take out a long they could not -- could not afford.

there was a lot of pressure there in what i would say was something of an unethical situation. work the other way, you had sophisticated people who were trying to get a loan and walked in and purposely misrepresented their income or their worth to get along -- to get a loan. the ethics worked on both sides of the equation. tonight, my little time of year, -- up here, i want to start the discussion with a few examples of how i saw my father live his life. i think he tried on a daily basis to live in it in a very, very ethical way. we were talking before the program here, and if you look at dad, probably the biggest public example of his administration, of his time in politics, dealing with a tough, tough ethical decision was dealing with watergate and the nixon pardon.

before you can really talk about the pardon, you have to go back before dad was even president, and some things had to fall in place for him to even have that chance to make that decision about the nixon pardon. you have to go back to 1971, when a group of men as we all know them today, the plumbers who were established by a white house adviser john ehrlichman. they were later called a special investigation unit. the plumbers, before water gates, some of you might remember, the plumber's went in and broke into daniel eldersburg -- daniel eldersburg psychiatrist's office in 1971. they were trying to get information detrimental to annualellsberg to stop war classified information on vietnam.

some of the paper showed the fallback position of the united states during the height of the cold war. they made a decision to illegally breaking and to daniel ellsberg's doctor's office under the banner of national security. they made a choice, and they broke some laws to do that. those men and the white house saw this as a national security issue, and they felt they were answering what they felt at that time was a higher calling to the president of the united states, and not the laws of this nation. that situation was in 1971, and in 1972 this same group of plumber's broke into the watergate hotel, the democratic headquarters, and watergate was started. all of that fell into place, which caused the nixon presidency to come tumbling

down eventually. that, on the other hand, and this is what i find fascinating about this story, as all of this was happening in 1973, as watergate had already started, richard nixon had to find a new vice president because spiro agnew had stepped down from office also because of unethical behavior. dad's name was on the list -- he had been a congressman for about 25 years from here in grand rapids, michigan. his name was put on the list with about 10 other people that possibly might be chosen as the next vice-president to replace spiro agnew. to be honest with you, we thought dad's name was at the bottom of that list. other names would have been governor rockefeller of new york, former governor of texas john connally, men that had greater national presence and dad, who was the house minority

leader in congress. but the foundation was being laid in dad's life early on as he grew up in grand rapids, and the people that invested in his life, he had the image of being a straight shooter, the boy scout, the square, and when it came to making a decision about picking a new vice-president, the most important thing to nixon at that time was to make sure his choice could get through congress. there was no controversy about that. he had that boy scout image. very ethical, work with both aisles of congress and both sides of congress. he could reach out across the aisle and find compromise. as you had the plumbers going this way with unethical decisions, you head gerry ford -- you had jerry ford rising up and be needed because he was making very ethical decisions.

as data first became vice- president -- and dad first became vice-president, my mother finally got him to retire. that was going to be his last term in congress. he was going to come back to michigan and be a lawyer. he had been in congress for 25 years, and he said if we don't win a majority and the republicans take over congress and i don't become speaker of the house, i will go back to grand rapids and start my law practice up again. mom was relieved. she wanted to come home. -- she wanted him to come home. all of a sudden in october of 1973, richard nixon calls dad to ask him to be the vice- president. and my mother was not happy. i will never forget my dad tried to calm her down and relieve her. i remember him saying to mom,

betty, don't worry, vice- president don't do anything. [laughter] that turned out to be false, as we all know. thinking about the pardon, a month after dad took office, the pardon happen. -- happened. let me walk you back 30 days earlier. everybody remembers the image of the helicopter with nixon taking off from the south lawn of the white house, nixon waving goodbye. i stood there with my parents and watched nixon leave. we went into the self the east -- the south east room of the white house where he took the oath of office. this was not a joyous occasion. this was somewhat a constitutional crisis. you had a man who was going to take over the reins of this country. we had the vietnam war going on, we had a huge recession,

the stock market had lost 45% of its belly, the cold war with the russians, -- loss 45% of its value. the cold war with the russians. this man was going to take the oval office and was not elected by the american people. this had never happened before in this country. dad those and becomes president -- dad goes into becomes president, -- and becomes president, and then finds himself 30 days later in a situation where -- let me back up just a little bit. right after dad became president, nixon went to california. one of the first request that the president's staff had back at the white house was to send all the documents, papers, and takes out to san clemente. many were still in the basement of the white house. dad said absolutely not, there was still a criminal case pending. nixon still had potential criminal charges pending against him. but the justice department ruled that every former president owns their papers, documents, and tapes. but dad refused.

he thought that was not the right thing for him to do, it had to be preserved as evidence. i remember sitting there thinking wait a second, if this stuff goes to california, there were probably be a huge bonfire on the beach tomorrow morning. that was the reality of the situation. it found himself going against his own justice department. congress was spending 25% of everyday dealing with richard nixon. dad was spending 25% of his day dealing with richard nixon, even though he had the vietnam war and the cold war and recession going on. after speaking with several people, nixon could have dragged this out for for five years in the courts. i think that is where dad finally came to the decision that he had to do something to get necks and out of the way so the country could move on and deal with -- get nixon out of the way so the country could

move on and deal with the war in vietnam, the cold war, and the recession. the pardon was the answer. the researched it, and that based their pardon on a 1933 ruling by the supreme court, where a man was held in federal custody and the government wanted him to testify and said they would give him a pardon, and he refused to pardon because he said he was not guilty of anything. i think the supreme court had ruled that by granting a pardon, there was an indication of guilt -- implication of uilt, if you accepted the

pardon. been becker who was dad's legal counsel on the pardoning nixon situation went out to san clementi and met with former president nixon, explained to president nixon that the pardon was based on a 1933 case, that by giving the pardon, there is an indication of guilt, and if he accepted it, it was an acceptance of that guilt. nixon initially turned down for several days, did not want to accept it under those terms. they knew at that moment president nixon was not going to say publicly that he had committed crimes or done anything, but finally nixon came back and accepted the party under those terms. -- accepted the pardon under those terms. it basically ended dad's political career. he knew it would probably cost him 5% or 10% of the vote when he ran against jimmy carter. in his mind, and just knowing him and how he operated, it was not about him.

it was about the country, and he felt very strongly that the country had to move forward, and the only way to do that was to push nixon out of the way. so they could start dealing with the economy and unemployment and inflation and the vietnam war. i think dad's roots came back here to grand rapids and his roots were about being a public servant and serving the public, and i think he was willing to give up his political future, thinking long-term instead of short term. i am always amazed, because one of the things that is brought about the nixon pardon is at the same time he pardoned richard nixon, he went and gave a speech in front of the veterans of foreign wars and also recommended that there be amnesty, a program set up so

that young men who had dodged the draft and went to canada could comeback to their families, come back and not be prosecuted. it was very symbolic of what he was trying to do. it was not about nixon, it was about putting your arms around the whole country and healing this nation and bringing people back home. it did cost him an election, there is no doubt about it. i don't think he would ever regret his decision. he knows he did the right thing at the right time. it does come full circle in the end. i was curious, and i highly recommend you read the book, because i wanted to read some of the material by some of the people involved in the watergate situation. a great book that i finished a couple of weeks ago by one of the original code directors of the plumbers unit -- co- directors of the plumbers unit.

he went to jail, which a prison. -- went to prison. he had a complete transformation, from what i can tell, of realizing what they try to justify under the name of national security, serving the president, and breaking loss was not right. he finally admitted his guilt and went to prison. in his book, he talks about we made on ethical decisions. -- unethical decisions. our allegiance to our superiors, to the president and the president's staff, got in front of our allegiance to the law of this nation and the constitution. early on in the book, on page 2, he writes "why did this burglary happen? i am convinced the collapse of integrity among those of us who conspired, or, and carried out

this action was the principal cause." he talks about how you get caught up in that power, and serving a president, dad in his speech talked about how he found out that we re nation of laws, and not just one man, and that our laws are more important than one man's ambition. i do want to share one thing with you. i had another story out was going to talk about -- i was going to talk about. as this comes full circle, 20 years after the nixon pardon, after dad lost the election to jimmy carter, it did make this complete term, because dad was invited to the john f. kennedy museum by caroline kennedy and senator ted kennedy to receive the john f. kennedy award for

courage in public service because of the nixon pardon. senator ted kennedy stood up there and talked about how 20 years earlier, he thought that had sold the country out, and it looked like an unethical decision to him at that point. he could see was 20 years of history what it was really about, trying to heal a nation and bring the country back together and heal the wounds of that nation. i want to close with one thing that i think speaks of dad and this idea, the world become so competitive we have to win at any cost. dad took a yellow legal pad and picked about 20 subject that he thought were important to young

man or woman growing up in this subject today, subject like what is character, integrity. this one is a learning how to lose. he bounded that book and gave it to all of us kids. i remember as the gunmen when he gave me the book -- as a young man when he gave me the book. he said these are some of my core values, and this is the copy of one of the pages, on learning how to lose. you can see it is hand written. i remember when he came to me, i was not as impressed as i should have been. [laughter] when you are that age, it goes above your head. he said steve, i want to be accountable to you guys. 18 years ago, when i was going through my alcoholism, and i picked up this book with his writings on these 27 it's about character and integrity in things like that, core values,

it was one of the things that helped save my life. i was living in some unethical areas. it was one of the tools i use, his wisdom, to get up off my knees and reclaim my life and get sober. i am going to read one of these to you and then i will turn it over to victoria and the rest of the group. there is some great wisdom in this. he title did "learning how to lose." in this highly competitive society, there is always a winner and always a loser. even the best sometimes lose because of circumstances beyond their control or because of unintended mistakes. but to walk off the playing field as a sorehead with the public display is not good for one's conscience or what for one's reputation. losing should be looked upon as a lesson so you can do better the next time. disappointment should not rattle once composure, sidetracked a well organized plan, or preclude another effort.

barring to lose is to recognize that one set back is not the end, but reality that can be a new incentive to reach and achieve higher goals. a lot of wisdom there, and i think thought like that pertain to ethics, how you live your life. you don't win at all costs, you don't cheat, you don't break the rules. we live in a society today that demands a lot. you look at baseball and steroids and all these things. there is a lot of pressure on young people and young adults. we have to ask ourselves the question of what we should do, what we ought to be doing. dad told me one time he was at a talk -- billy graham had spoken, and he and billy graham were talking afterwards. i don't think i quite understood it when he said it, but i think

i understand it better today. billy graham was telling dad, the greatest challenges before us are not going to be medicine, technology, and finances and things like that. the greatest challenge is going to be taming the heart. the tame the heart, i do think you have to look at these things, these ethical questions of what is right and what is wrong. i thank you, you are a good audience. i loved the discussion and the back and forth, and at this time i would like to invite victoria up here and we will hopefully have a lively discussion and be the town square for grand rapids today. thank you all very, very much. [applause]

>> we are very fortunate today to have with us three outstanding leaders to explore and discussed the role of ethics in shaping and regulating our society. and the question of whether america still has more integrity. each of our panelists will speak for about 10 minutes, and then will entertain your questions. our first panelist who will speak today is brigadier- general michael mcdowell, the former deputy assistant secretary for homeland defense strategy. his duties include supervising the departure of defense critical infrastructure protection program, the global anti-terrorism protection policy program, and serving as the liaison from the department of defense to the white house and congress. in 2003, the michigan governor appointed him her advisor on

homeland security. general mcdaniels recently joined khalil law school where he will develop a program and homeland security law. he has a master of strategic studies and a master of arts and security studies from the naval postgraduate school. general mcdaniels has been a member of the michigan national guard for 24 years. our second panelist today is terry lynn land. she served as secretary of state from 2003 to 2010. an advocate of voting rights, she parted disability advocates to implement the first boating equipment designed specifically for people with disabilities, and to ensure that local polling places are accessible to disabled voters. the michigan rehabilitation conference honored her with its

2006 s look to excellence award for these achievements. she expanded online services and reorganize the branch of the structures to better serve michigan residents. in recognition of her success, she was presented with the distinguished leader award by the michigan business and professional association in 2007. an honor given to women who have demonstrated successful leadership. she is a graduate of hope college and was awarded an honorary doctor public services by central missing in university. our last palest is filling in for tony jenkins, the state bar association president who unfortunately fell ill. we are happy to have with us today the vice-president of the state bar of michigan, who will serve as a president beginning september of 2012. he has practiced law for 22 years and is a partner in the

grand rapids firm of roseanne mckee -- rose and mckee. he is the recipient of an award given to one attorney each year by the state bar of michigan in recognition of outstanding pro bono contributions to michigan citizens. he has served on the board of directors for the grand rapids aid resources, has been named as one of grand rapids top 40 under 40, and has been designated a super lawyer every year since 2006. he earned his law degree from the university of michigan. please welcome our panelists. [applause] we will began with the general. >> thank you very much. it is great to be here, distinguished guests, mr. ford, my colleague from the collegiate law school. i really appreciate this opportunity. if i could take one moment to

interject a personal moment, mr. ford, i greatly appreciate your mentioning about your father's career as a boy scout. i can tell you that in the late 1970's when i was awarded my eagle scout, it was certainly considered sort of square at that point as well. having as our president the only resident of -- recipient of the eagle scout award meant the world to us at that time. i appreciate you mentioning that. that love of scouting your father exhibited right up until the very in, it was very heartwarming to be president -- to be present at the funeral procession and see all the boy scouts lining the streets of this great city. thank you all. i want to talk about the concept of whether there is in fact a separate ethnic for the american public. do we have a separate ethics for this country? i think it differs, depending on each country.

i submit that we do in fact have an ethic, that it continues, and is based in our constitution. i would suggest to you that this is certainly not a new concept, and the first decision that every law student reads, marbury vs. madison. chief justice marshall specifically referred to the of the office, to support and defend the constitution of the united states that every judge takes. if you look at article 4 of the constitution, it is not limited to judges. also talks about the president and members of state legislatures. talks about every member of the judiciary and executive office of the several states. it is intended by our framers in the constitution that all of our public officers take that oath to support and defend the constitution. this is really of no small

moment, because it impresses upon you when you take that oath not just the august nature of the position, but more importantly, the responsibilities and where those responsibilities are grounded. as an attorney, as an assistant attorney general, as an officer in the u.s. army, as a general officer, as an assistant attorney general, i recently was three sworn into the michigan national guard last month, and each time i took an oath to uphold and defend the constitution of the united states. so i think that oh, and an oath is much more than a promise, is a covenant with a higher being, a covenant with your god, whoever you believe him or her to be, that you are taking that solemn oath to defend the constitution. how do i get from that to a public ethic? there are two sort of themes there. one of them is not unique to

the united states. that is the one contained in the preamble to the constitution, where it says to promote the general welfare. certainly given our history at that time, we were throwing off the ties that bound us to the king. we are transferring sovereignty from the king to the people. we were transferring ownership of property generally from the king to the people. there was an understanding of this collective welfare, this collective self interest, if you will, and the need to promote the general welfare. some would suggest that is one of the two tenants. the second one is not unique to this country, and that is the idea of protecting self interests. it is perhaps more subtle, but

it is definitely as fundamental to the constitution. the framing of the constitution is not simply democratic, it is not majoritarian, it was a federalist system as well. there was the idea they were protecting the small state and the individual. it created a community as it created this checks and balances, and they were ensuring the interests of the individuals would not be lost. that was very important to the framers, for individuals and the larger states. i think those are always in tension. there is as dynamic between them. that is the part that causes, as mr. ford said, this pendulum to swing it, this dynamic, or sometimes there is more interest in this office interests of individuals, and sometimes there is a collective interest.

because there is no black-and- white. it will always be this gray area. last week, the supreme court ruled that the westborough baptist church has the right to protest investment fashion -- at the hem that fashion at military funerals. i can tell you that there is nothing more somber, there is nothing more important to this nation that we recognize those individuals who sacrificed in support of that constitution and in support of all of us. and yet the constitution does permit that because there is that tension between the collective interest and self interests. no matter how a port, no matter how detestable, we have to protect that speech. we certainly could permitted to be 1,000 feet away and

guarantee other things, but we have to recognize that speech as well. there is that constant tension between these values. both of those values, i would submit, are ones that we have to uphold. an example from 150 years ago, the tenants stephen decatur said at a dinner, he stood out and gave the following toast. our country in our intercourse with foreign nations, may she always be in the right, whether our country is right or wrong. i think that is something seized upon by jingoists and self-proclaimed patriots.

john quincy adams, responding to that, having heard about that toast, and a letter to his father said that he could not join his voice in that post. he said i cannot ask of heaven's success because where she would be in the wrong. let justice be done, though the heavens fall. that is a phrase i have often used. let justice be done, though the heavens fall. the reason for that is it strikes me very similar to one of the key lessons we learned at army war college, which is the mandatory schooling that every officer has to have before they begin getting considered for general rank above colonel. that is it that you have to be able to throw your stars on the table. you have to be able to give up your rank, everything that you held dear your entire career,

to do the right thing. exactly as mr. ford said, talking about his father's decision to pardon nixon. he knew that decision politically was going to be devastating. so every army officer is taught these days you have to be willing to throw your stars on the table. let me give one example of that. in the time after september 11, 2001, over 400 individuals were in turn at guantanamo bay. there was a question as to who was going to represent these, army, air force, marine jags were all signed as rigid all assigned to represent them. you had osama bin laden's driver. he said i went from doing drunk driving cases and positive drug

tests to one of the most highly visible court cases in the nation, if not the world. they rose to the occasion. they sued secretary rumsfeld in federal court on the grounds but that the military tribunal was not following the constitution and geneva convention. they were, in fact, correct. many years later, after several years of getting the case to the supreme court, justice john paul stevens wrote the opinion on behalf of the majority. consider again, justice john paul stevens, to bring this full circle, the one supreme court justice who was appointed by president gerald ford. i think similar interests, i think similar character, certain similar integrity must have existed all the way through. as we heard mr. ford said

earlier tonight, it was an understanding of the need for integrity in that decision. the sense that no man is above the law. that was certainly true as well in the opinion by justice stevens, as he specifically said in the opinion that individual rights and national security have to be upheld -- but may find it. he said, "the executive is bound to comply with the rule of law in this and every jurisdiction." in closing, there is always an ethical question. every ethical question, if you will, will devolve down to the simple calculus -- to what extent does the general collective interest prevail and to what extent do we allow the individual's interests as well?

>> thank you. >> thank you, it is great to be here at the gerald r. ford museum and library. i was born and raised on this side of town. to have the opportunity as a high-school student to actually work on a presidential campaign, it was not until i was older it that i appreciated what i had with that opportunity. i started out wanting to be a teacher. afterwards, on the campaign, i decided i wanted to do this. which was how you run for office and had you get elected, how you make decisions, what you can do. i am up here being the practical person, not a lawyer. even though i was a court clerk for kent county and served on the grievance commission, i

understand how lawyers work. but i think what i will bring to this is the practical part of this. that comes in with how you make decisions and how you get this information. as county clerk, i talked to anybody. if you want to have a cup of coffee with me, we could talk. nobody was buying lunch, nobody was paying for a conference, but we do need to talk to everybody. i believe in government to make good decisions, you need to have conversations with everyone. president ford was of that mind, that he wanted to hear all sides. my staff meetings as secretary of state or always engaging, the word i like to use, because i had folks who have different philosophies, conservative,

liberal, government experience, business experience. that created a lot of dynamics and allow us to make good decisions. i thought i would first give you a view of how we make decisions and come to conclusions dealing with the influences. that is a challenge because now the technology as part of our lives and yet get bombarded on cable, facebook, twitter, you have to make sure you are getting the right information, the correct information to make decisions. you are dealing with taxpayer dollars and people's lives and families, so it is really important that you really look into the information that you get and make sure that it is good and accurate information when you make those decisions because it affects a lot of people's lives. on the election side, we have a newsletter, and there was a survey to find out how people thought about ethics in michigan and government, the campaign finance side. in michigan, would like to say

that we have no ethics. what i mean by that is we don't have the same type of procedures and rules as far as running for office and declaring your income, stock, and holding she may have like congress does. i explain to people in michigan is different. we are unique. we have one industry that dominates our state. the matter what income you are at, you have gm stock, ford stock, chrysler stock. it would never appear to anybody to announce that because we are all about the automobile. in other states, were you don't have that one industry that bowman states the whole entire state, they looked at it differently. if you have gm stock and you go

into the legislator and evoked -- and you vote on something that affects the automobile industry, people say, he should denounce that. -- you should announce that. those kind of issues were never brought to the forefront. just to give you an idea, the poll asked people if it made a difference if they fully disclose their sources of income like sources of congress, and only 40% of people in michigan thought it was important. in fact, they also asked, 50% of campaign funds come from lobbyists, is that important? 20% thought it was important. you go down the list of issues, and it boils down to 18% as far as campaign finance and public financing of candidates. in michigan, we have the ability to public finance the

gubernatorial campaign. every year, less and less people contribute to it. now it is 18% of the people who think that is important anymore. it is interesting when you start talking about campaign finance, but the reality is most people don't think of it as a problem. we have transparency in michigan, which i think is important, and as long as you get a contribution, you need to be up to let folks know what it is. when i was secretary of state, i had legislation i put forward -- i was not successful getting it passed and signed by the governor, but what i wanted to do was have real-time campaign finance reporting. if you've got $100, before you could spend a, you had to put it in the bank and declared on a website and real time and everybody could see that you got $100 from joe smith. right now, people play the game

where they don't put down the contributions until after the election. this way you know ahead of time, within a month the billboard's go up, the yard signs go up, no campaign contributions coming in, right away you could go after that and to the public would know they have to disclose their contributions. that is one of the things that i put forward. it is still out there. i think transparency is the biggest issue. people just want to know where the money is coming from. the reality is, like the polling numbers show, it does not make a difference how much, it is just the transparency that people seem to want to know. then there are a few other things that we deal with, that i dealt with at the secretary of state's office. there was a big discussion about having polling places accessible to folks with

disabilities. there have been a lot of conversations about it would cost too much money, we cannot afford it. well, if it is the right thing to do, you should do it. that is why we went ahead and did that when i was in the secretary of state's office, improve polling places because it is just right. my favorite story from that whole process of modernizing the elections in michigan was the woman who was sight impaired all her life, never able to vote. we put the new machines in, she went into the polling place, put it by herself for the first time, 65 years old. she stood up in the middle of the polling place and said, but " god bless america." of course, the clerk call or all this right away and told us the story. that is what it is all about --

making it acceptable -- accessible. >> thank you. [applause] >> i get to bat cleanup. i want to thank you for the honor of being here. it is an honor to be inviting to anything concerning gerald ford. i was asked to focus on legal efforts. that is not an oxymoron. when i sat down and thought about it, what does that mean in this context? i was told once that ethics and balls being an ethical person -- someone who always does more than what is required, but less than what is permitted. in the legal context, that is true. in the state and michigan, the

attorney discipline system is run by the lawyers with the ultimate oversight by the supreme court. we felt the least. i came up with some statistics. i was trying to figure out how we were doing in the state of michigan. in 2001, there were over 33,000 members of the state bar. last year, there were 3000 under investigation. this means there was a 10.37% rate of retraction. in 2010 there were 41,133 lawyers and only 2803 request for investigation. that would seem to indicate that we were doing better ethically. it runs contrary to what one would think. we had to focus on a few things.

one thing i would urge you to consider, there are a lot of challenges is going on in the legal profession that impact the way we do business and the pressures on us as practicing lawyers. i believe in today's world where we are becoming more high-tech and more fast-paced and less interpersonal, no face-to-face communication anymore -- there is a change in our culture that trickles all the way through society including law. i feel very fortunate to be practicing law in the state of michigan, particularly in west michigan. i want to focus on a couple of factors that affect what is going on in the legal business. the first is the slowing economy. martin luther king once said that the ultimate measure of demand is not where he stands in moments of comfort or

convenience, but where he stands in times of challenge. if you are from michigan, you understand we are in a challenging economy. 20 years ago, michigan had more than 140 publicly traded corporations based in michigan. they came up with the michigan stock index that features the top 100 of those companies. two years ago, there were fewer than 90 companies in michigan. they cannot even come up with a top 100 anymore. the department of labor and economic growth -- we lost 593,000 jobs in 2003, 13.4% of michigan's work force has been eliminated in that time. we are the only state of the 50 that has lost population in the last census. what does that mean? i will submit to you that the

impact on lawyers and law firms is predictable. there is a new term going around in the legal business -- the on hiring of associates. -- the unhiring of associates. you have graduates who were not being hired by law firms. they are forced to go out and become solo practitioners. some of the best lawyers i know our individual attorneys, but for a new attorney coming out, they do not have a mentor. they do not have somebody to show them the ropes and can point out potential minefields. the other thing going on is that there are more and more lawyers being [unintelligible] when you talk about the declining employers and lack of jobs in michigan, you have more lawyers competing for fewer opportunities, and your clients.

a thriving middle class has always been an important staple to lawyers. that is where we get a lot of our business. in michigan these days, the middle class is not driving. that impact the bottom line. the results are three-fold, none of which are good. you had the young attorneys to do not have been membership. you have a lot of more experienced lawyers who used to be at big firms and administrative support and now they have been forced out to become so low. a lot of grievances and been filed against them because they do not have the support staff and they have become sloppy and careless. the third thing is the most experienced lawyers are still forced to fight at any cost to keep their clients because they are becoming less and less [unintelligible] when you have a win at all costs mentality to keep your clients,

that is when you see the wall street. that is when you see the lawyers try to maintain their client relationships by doing what it takes to keep the client. they may turn a blind eye to things that they would normally objective. it causes serious problems. the second thing that really impacts the practice a lot these days is technology and the increasing pace of life. when i started practicing in 1988, we had one computer in the office and wind paper fax machine. now fax machines are outdated. we now have little phones where we can get instant messages and e-mail. the class can send a message is that we can get a answer -- and get an answer as to lead. it used to be when someone sends

you a letter, you had time to contemplate the issue, draft a letter, send it back in the mail. maybe they call you on the phone. that does not happen anymore. there was a story last week about the death of the telephone call. i like to focus on criminal indigent defense. for many lawyers, one of the reasons we went to law school is atticus finch in "to kill a mockingbird." that is what we all wanted to be when we grew up. recently the state of michigan had a national study that showed the state and michigan is failing to meet its constitutional burden to provide free legal defense for criminal defendants. unfortunately that is something that has to be addressed.

in today's economy, how can you pay for that? that is another issue that will have to be addressed in the short term. by and large, i submit to you that criminal defense attorneys are modern-day john adams. a lot of people do not realize this. john adams actually defended a british soldier who was accused of murder during the boston massacre. he did that because he thought it was more important that one guilty man mike -- that 90 might get off rather than have one asset man convicted. that is how defense attorneys are. prosecutors -- most of the prosecutors in our society are devoted civil servants and are devoted to fight injustice.

one side or the other inevitably slips. when that happens, you hear about it. it is on the front page. we hear about the criminal defense attorneys getting paid in something other than money. .e hear about the prosecutor's a prosecutor committed suicide after being accused of unethical behavior. it happened in the -- i in detroit two years ago when a prosecutor was accused of prosecutorial misconduct. when it does happen, the reaction among us is we realize the person we thought was superman is really clark kent on steroids. that hurts. there is good news. the economy has not hit us as bad as it has yet others in west michigan.

there is a collective reinforcement of our professional ethics. we really looked at each other. we stand in front of the same budgets. if you cut corners, you will remember it next time. that accountability is very crucial in western michigan. in wrapping up, i think this says a little bit more. when i was first interviewed, i was asked how i conducted myself -- why did i conduct myself a certain way? my guiding principle was i did not want to do anything that would embarrass my parents. now i have a daughter who is a freshman. with that perspective, i live my life -- i want my daughter to

think of me first. i think that is the best lesson for all students. that is the way to conduct yourself. thank you very much. [applause] >> we will entertain your questions. if you have questions, please write them down and passed them along. the first question is coming from mr. ford. >> a question for anybody on the panel. one of the most important things you said was helped technology has changed our society. i would ask your perspective of both technology and pop culture because we somewhat isolate ourselves. we text people instead of calling them. how does that affect going deep enough to even think about ethics as opposed to saying it

is my own personal opinion? >> people say things on the internet they would never say face-to-face. ethics is the golden rule. if you are seeing somebody face- to-face, you treat them in a manner in which you hope to be treated. when we are so reliant on technology, e-mail's, and as the messages, we do not make a personal connection. that leads to a greater sense of me versus we. that is a very important thing. as far as pop culture, it tends to glamorize those who are out of the norm. the people who are getting away with things are the ones all over the news.

the teenage mother shows -- if i mentioned teen-age motherhood to my mother in high school, i would have found a bar of soap in my mouth. we have to have a serious discussion about keeping that in check and making sure people realize that is not the norm. that is not be accepted. that is the aberration. >> technology has made it tougher. if you are -- you are a little more cautious. i remember when we first had e- mails. my answers were yes, no, and thank you. [laughter] you did not want to say anything that would go viral. i changed the rules. it makes it hard to make decisions because you do not get

all of the information. i tell my staff everything they need to know to get their jobs done. one on one, you can talk a little bit more. you can have a little bit more new lots to what you're saying to help people understand where you are coming from. i think that has hurt that. when you are making a decision and you have a group of folks together and you got to make decisions and then go forward as a team -- technology has -- there is so much of it out there. consistency of what you say is huge. i feel for some elected officials out there. instead of saying something 1000 times one way -- that is the challenge out there right now.

>> about six months ago when i was working at the pentagon, a former west pointer came up to me. he was quite upset. he had just had a phone call from the times of london. they had figured out based on documents that had been put on wikileaks where he was in 2004. they were achieving certain behavior is to them based upon knowing what the incident reports were. this war is not like any war we have never prosecuted before. any time you leave a foreign operating base and go outside the wire, a u.s. some kind of contact with an m.a. or civilian, you got to do an answer that report. -- do an incident report.

thousands of those were put on wikileaks. clearly, here was this individual and his behavior. they're going to figure out who he was. there was a favorable story about him in the washington post. they took the documents on wikileaks and were able to combine the two and make certain assumptions which may or may not have been correct. assumptions about the soldier who had served his country honorably, to had to make very quick, ethical decisions in a very adverse environment. now they were trying to make him a public figure as a result of that. that tension between the collective good and the individual good has not caught up with the technology we have. there is too much of a focus on individual self-interest. the collective good in this case

does not balance that out. >> the balance between the common good and the personal good -- this question is a statement, actually. portions of the original patriot at seem to overstep our citizen's rights. how would you respond to that? >> it should be noted that some of the most controversy all provisions of the paycheck act or up for renewal -- were up -- but the paycheck at were up for renewal. congress was trying to get that up -- patriot act were up for renewal. those are the ones having to do with the library and with roving wiretaps. the controversial provisions have come up to congress since

then. there has been distorted debate i think we need to have. you can see that there is tension there where they are trying to figure out the balance. congress is still struggling with that. i think it is absolutely appropriate under our constitutional system. >> this is a question for each panelist. what was the most difficult professional, ethical challenge you have faced? what i did you? guided you.d di >> i am not sure i had the courage to answer that [laughter] . when i first saw it with the attorney general's office in michigan, he was one of my earliest mentors. we had a lawsuit where it was

necessary -- i was in the environmental division -- it was necessary to look at ground water. they responded in part in a political way. i was called to frank's office. there was the mayor of all five cities. they went through and frank came in and tapped me on the shoulder. he does not say anything to me. they are chewing me out and demanding that this lawsuit, which was brought by the government against the government, did not serve any good purpose. frank kelly heard them all out. then he looked at them and said, "you stay the hell out of

the judicial process and i will stay out of the legislative process." if you have any questions, mr. daniels will answer them. [laughter] i will not tell you the response of some of the representatives. alwayst is that you'll have a time when you are saying, "am i doing the right faint?" -- am i doing the right fathing "in most cases will have a mentor we can rely on. as bruce said, have your mentors in place and make that decision based upon what is right and what is transparent for your client and for yourself. >> you have to live with

yourself. that is the bottom line. on a daily basis, when i was secretary of state i had a democrat governor. i had republicans in the legislator and the senate. on a daily basis there was this give-and-take between all of us. we had to make decisions. it is the art of the compromise, but you have to make sure when you are compromising you are not compromising yourself. i will not name the legislators here. there were a few, even within my party, who were very insistent on what they wanted. i told them they had to keep that up knowing full well that my budget would be looked at very closely next year. i said, "my budget is pretty darned good." the reality was, the next year

they were not in the legislator -- not in the legislature. you cannot make decisions based on a threat. you have to make that decision for what works now. the future can change, let me tell you. i support with a lot of candidates. i remind them of that all the time. what happens today might be so different tomorrow. do not worry about that. make the decision you need to make today. that is very important to do. the next day can be very different. >> as a practicing lawyer, i take very seriously my role as an officer of the court. i think it is critical as a litigator. the court has to know when i am cat -- i am telling them something, they can count on my word. i ran into a situation other

attorneys have run into. it hits you right in the face. it is a jolt. i was representing a woman -- i was doing it on a pro bono basis -- she was having her house foreclosed upon. she believed her -- i believed 1000% of what she was telling me was true. they had forged signatures on documents. i hired an expert al of lansing, a former fbi agent. he came in and took writing samples from her. he came back to me and said, "i have good news for you. you will not have a problem much longer." he told me that based on his analysis, that was her signature.

didn't that, i could not in good conscience go before the court with it. i had to withdraw as her counsel. we had -- the firm had spent a lot of resources. i spent a lot of personal time. that was a very difficult conversation i had to have with her. it was absolutely the right one. >> another question for each panelist -- is there a decline in mutual respect and ethical behavior in american society today? if so, what accounts for this decline and how can you address it? >> i was trying to come up with my definition of an ethic. whether it was the behavior of the states during the articles of the confederation, whether it was the political climate when

andrew jackson was elected and the slurs towards his wife -- whether it was the state of the country with the rutherford b. hayes and a disputed election -- whether it was more recently with the red scare or, as mr. ford said, with watergate -- it is hard to say that this is the worst of times. i really sort of rejected. -- reject that. we are incredibly resilient as a people and as a nation because of the way that our founding documents were worded. i think that if anything i believe having thought about this over the last month getting ready for this today, i came

away somewhat reassured. it is so easy to pick examples. we have so many different media sources now. every individual -- everybody who has their own i phone is their own media source and create their own media. we have -- we now have 300 million networks out there potentially. as a result, we are and boarded with bad news. the good news is somehow filtered out. if you -- i refuse to believe that we are -- that we have lost disability as compared to before. if anything, it is a swing of the pendulum. >> i agree. i do not believe it has changed. in 1976, everybody was yelling and screaming at each other.

there were no tvs. we all walked out and smile afterwards. what has changed a little bit is the technology. if i could make a comparison here -- watergate was breaking into campaign headquarters in stealing files. what is the difference between that and governor playlalin? the young man broke into her e- mail to find out what they were doing on the campaign. it has not changed. it is just the technology and what has happened. i was on the detroit economic board. president boat -- president bush gave a speech a while back. they got the speech in a room. it was a big major speech on the economy and manufacturing. they leaked that out.

it still happens out there. it is just a little different. >> i am very pleased to say that when i run into an ethical conduct by lawyers, it's still shocks me. i hope that is a very good sign. i have had a couple of days to think about it. going back historically, there were so many battles hard fought. i came across a quote from mark twain. "it is curious that courage should be so common in the world and normal courage so rare." this debate today -- mark twain died in 1910. it has been going on for 100 and

something years. i believe things are not as bleak. . .

>> i am on a non-profit board that deals with urban core students in high school by exposing them to fine arts and technology. the kids that i meet over there, the worst backgrounds you can imagine. and i never come out of that building without being uplifted. again they renew my hope. but i'm very confident in our youth. >> as candidates i'm always still a teacher. but one of the things i've noticed with the younger ones is that i don't think there's a lack of moral values. the parents have done a pretty good job with that. but it's about cutting the corners that i find interesting is that i'm a little bit from

the old school. do it all, do it right and you get it done. and i think again maybe technology is part of that or finding other ways to do it. but there's a little more of that. on the lodge haul it's going to hurt you. and i find that's been most interesting, just a little bit more about taking the shorter way around rather than the long way. because i remember when i was younger you started at the bottom and then you worked up and you did all of that. there's not so much of that anymore. it's like let's go to the top right now. and i think in doing that you don't gain that wisdom that you get from the years of experience. and not that some people can't do that when they're younger and move up, but i do think that experience and that relationships and the fact that you've worked at it a little bit and understand how it works is important. so that's what i see more as the challenge. >> just briefly, same answer. ethics is not innate, it's learned behavior. we have to have the institutions in place. it's the boy scout oath, it's

the boy scout law, those behaviors being taught at an early age so they become so inculcated they become the ethical base for those individuals. if there is a blame it's on us the older generation. >> all right. one final question. we'll start off with you, general mcdaniel. -- ethics matter when dealing with evil, i.e. iran or libya. >> absolutely. absolutely. to maintain our moral place in this world, as that nation on the shining hill which we like to perceive ourselves as, we have to be not only moral as an individual but moral as a nation. so we have to have very reasoned debate before we have -- before we make decisions about the use of force in countries like libya just as we could have had greater debate in some of the other -- in some of our other

recent incursions. i remember well the reaction of my colleagues in the military leaders when decisions were made very quickly to go into afghanistan and iraq. because when you commit this nation's blood and treasure, that is a commitment that has to be a commitment of the entire nation. and the people of libya i believe are looking for democracy. they will model themselves to the extent that they can within the extent of their culture after the united states. but it's not because we are a nation of military force. it is because we are a nation of democracy and a nation of moral values. >> well said. i guess i would just agree. and you have to reflect on why you're doing this and make sure that you understand what the reasons are and that it commits folks to -- to have to be a total commitment. and also it has to be a world

commitment. we're on a world stage so we have to talk to our fellow countries out there and make sure that we're on the same page. we also have to make sure that we're loyal and our word means what it means. and i think that's hugely important. and sometimes you have to make those tough decisions. and it's a challenge. but we're in these kind of times now. that's just really what the world's about right now. >> i think that question wraps up today's discussion perfectly. because it's only when you're forced to face evil, when you're forced to face a bad choice, that you have the inner debate. my mom always used to say, if you go to bed with dogs fleas. [laughter] >> that's the debate you have to have. whether it's dealing with a despot, whether it is dealing with a political opponent who wants to take advantage of some leverage that he or she

perceives or whether it's dealing with an unethical lawyer, you cannot bow down and engage in the behavior which you yourself would condemn. >> all right. thank you very much. mr. ford has closing remarks for us. [applause] >> what a fascinating debate. we could go on for hours. i have so many questions. and i thank you for being here. and i think you did wrap it up. dad would be so pleased today that this was the town square and we got to discuss things. i know i speak to a lot of kids across the country. gosh, telling them about my alcoholism, what i winter to, how to avoid some of the pitfalls and decisions. i know i don't have any children of my own, but i know my girlfriend's two kids who are teenagers, i look at -- talk about this information. instant access.

there's no -- what do i say -- delay of gratification? everything is now. and it does wear away. and i think we as adults, our biggest and i think dad would tell you the the same thing, we need to teach. this we need to show young people this. we need to plant the seeds. and the seeds that we plant today about ethics, character, integrity, leadership. and this isn't partisan politics. the democrats don't own it more than the republicans. it's ethical behavior. plant those seeds in those kids today. we'll see a harvest later. but you know, my old ag instructor in college when i was an ag major used to tell me, you know, you can't stick broccoli seeds in the ground and expect to see corn next spring, you know? it just doesn't work. whatever you put in the ground today is going to show up later. and our biggest commitment must be to our young people. thank you all very much. we have a little reception in

the lobby afterwards. thank you very much for being here. and we're very grateful. thank you very much. [applause] [captions copyright national cable satellite corp. 2009] [captioning performed by national captioning institute] >> the present administration believes that we have to be looking very, very closely at the events in japan. as he said before, we have to apply whatever lessons that can be and will be learned. >> energy secretary steven chu and nuclear regulatory commission gregory yasgow were on capitol hill testifying on the energy department's fiscal year 2012 budget and nuclear power safety issues following the earthquake and tsunami in japan. watch the complete hearing now online at the c-span video library. search, watch, clip and share. it's washington your way. >> president obama has begun a trip to latin america in part to

strengthen economic partnerships in the region. in his weekly address he talks about the need to open additional global markets to u.s. exports to help create jobs here in the u.s. then representative jaime herrera butler with the republican address. she discusses the need to rein in government spending to address the national debt. >> in recent days we've seen turmoil and tragedy around the world. from change in the middle east in north africa to the earthquake and tsunami in japan. as i said on friday, we will work with our partners in the region to protect incent civilians in libya and hold the guidance stand with the people of japan in their greatest hour of needs. as we respond to these immediate crises abroad, we also will not let up in our effort to tackle the pressing ongoing challenges facing our country, including accelerating economic growth. that's why over the weekend i'll be in latin america.

one of the main reasons for my trip is to strengthen economic partnerships abroad so that we create good jobs here at home. latin america is a part of the world where the economy is growing very quickly. and as these markets grow, so does their demand for goods and services. the question is, where are those goods and services going to come from? as president i want to make sure these products are made in america. i want to open more markets around the world so that american companies can do more business and hire more of our people. here's a statistic to explain why this is important. every $1 billion of goods and services we export supports more than 5,000 jobs in the united states. so the more we sell overseas the more jobs we create on our shores. that's why last year i set a goal for this country, to double our exports by 2014. and it's a goal we're on track to meet. part of the reason why is the rapid growth of latin america and their openness to american

business. we now export more than three times as much to latin america as we do to china. and our exports to the region will soon support more than 2 million jobs here in the united states. brazil, the first stop on our trip, is a great example. in 2010 america's exports to brazil supported more than 250,000 american jobs. these are jobs at places like capstone turbine in california, which recently sold $2 million worth of high tech energy equipment to brazil. another company is rhino assembly, a small business in charlotte, north carolina, that sells and repairs tools for building cars and planes. a deal with the distributor in brazil has resulted in new sales and new employees at that firm. and we can point to large companies like sikorski whose helicopter sales to brazil helps sustain a large skilled workforce in connecticut, alabama and pennsylvania. today brazil imports more goods from the united states than from any other nation.

and i'll be meeting with business leaders from both countries to talk about how we can create even more jobs by deepening these economic ties. after brazil i will also visit chile', a country where the growing economy and increasing demand for american goods. in fact, since 2004 our exports there are up 300%. and now support about 70,000 jobs here in the united states. finally we'll head to el salvador, a nation with so much promise for growth with the potential to benefit both of our nation,. we've always had a special bond with our neighbors to the south. it's a bond borne of shared history and values and strengthened by the millions of americans who proudly trace their roots to latin america. what's clear is that in an increasingly global economy, our partnership with these nations is only going to become more vital. but the source of growth and pros pair estimate not just for the people of hasn't america but for the american people as well. thanks.

>> hello. i'm congresswoman jaime her rare a butler. i have the great privilege of serving washington state's third congressional district. i'd just like to begin by saying on behalf of the people i represent that we're thinking of the people of japan and praying for them as they continue to deal with the devastation following last week's earthquake and tsunami. now, i've only been in congress about two months now. and i like to think about my job as a tale of two washingtons. in the hard-working communities of southwest washington state, families are scraping to save more than they spend as they cope with double-digit unemployment, rising costs of gas and healthcare, and other challenges. small business owners are working hard to stay afloat while struggling with fear and uncertainty over what new regulation or tax hike the government's going to hand down to them next. meanwhile, here in washington, d.c., the powers that be have enlisted an army of lobbyists to try and block even the most modest efforts to address our $14 trillion debt.

they're also throwing a wrench into the gears of job creation with regulation after regulation that just by entering the pipeline breed more fear and uncertainty. as a result, our economy isn't producing enough jobs. it's struggling. i was sent here to get this washington, with all of its overspending and overregulation, out of the way so the country we know and love can thrive and prosper. right now the new house majority is hard at work on eliminating regulatory barriers to job creation. earlier this month the house voted to repeal the 1099 mandate in obama care that will hamstring small businesses. soon we will vote to stop the e.p.a.'s back door national energy tax that would drive up gas prices, and we're holding hearings on the raines act. common sense reforms that give the people a say before the government tries to implement any job-crushing job regulations. we're also working to cut

wasteful spending strong signal that washington is going to stop using our small businesses as piggy banks and focus on helping them get back to creating jobs. already we have cut washington spending by 10 billion over five weeks. this is real money especially when you consider that president and democrats in congress originally suggested that not a single dime in spending cuts would be had. of course, we're serious about ending the uncertainty for job creators in our economy. we need to cut more. as economists have explained and many americans already know, it's the private sector that creates jobs, and government overspending just crowds out private investment. that's why last month the house passed a measure reflecting the will of the people that includes significant cuts and reforms in the way washington, d.c. spends tax pay ers' time and money. this legislation is necessary because last year when democrats ran both houses of congress they failed to offer a budget for the first time in modern history congress failed to do this.

the senate needs to step up and follow us in passing a bill so we can prevent a government shutdown and support job growth by reducing spending. but to date the democrats and the senate haven't passed anything. instead of offering a credible long-term plan the president has stayed on the sidelines. if we want to get our economy back to creating jobs, we can't duck our responsibility to rein in spending. it's important we get beyond the last year's mess so we can focus on the full scope of spending problems in washington, d.c. republicans are determined to begin a dialogue about entitlement reform, even though the president's budget is silent. failing to address the explosive growth of auto pilot spending means failing to address our debt crisis. that means more uncertainty for our small businesses who create jobs, and more uncertainty for every american who counts on programs like medicare and medicaid. without reforms they simply won't be there for future

generation. and that's unaccept appable. my republican colleagues and i have headed back to our districts this week to start a dialogue with american people about all these issues. we invite the president and our democratic colleagues to join us in this dialogue. together we can stop the uncertainty, help small businesses begin hiring again and replace the crushing burden of debt in america with economic growth, freedom, and prosperity. thank you so much for listening. >> next a consumer federation of america forum on protecting people from scams. then the 2012 budget request by the bureau of ocean energy management. and after that a house hearing on rising gas prices. >> beginning april 1 and throughout the month we'll feature the top winners of this year's c-span student cam competition. nearly 1500 middle and high school students submitted document rest on the theme "washington, d.c. through my lens" focusing on an event, issue or topic that better helped them understand the role of the federal government.

watch the winning videos on c-span and meet the students who created them. stream any videos online at any time at studentcam.org. >>en co-super federation of america held its summit meeting in washington, d.c. this week. over the next hour and a half we'll have remarks from former treasury official michael barr who says washington has collective amnesia when it comes to remembering the financial collapse. we'll also hear from transportation safety official david strickland and the federal trade commission's julie brill on what's being done to protect consumers from scams. this is a hour an 40 minutes. on what's being done to protect consumers from scams. this is 1 hour and 40 minutes. >> i'm steven brobeck director of the consumer federation of america. once again i have the privilege of introducing michael barr, a professor of law at the university of michigan. the last time michael spoke at a c.f.a. event was in december 2009. while serving as an assistant

secretary in the treasury department. in this capacity he played a key role in developing the financial services reform legislation and was the administration leader in successfully advocating consumer reforms, most notably the creation of the consumer financial protection board. for that contribution alone, consumers and the consumer movement will remain forever in michael's debt. we greatly appreciated the speech, even if it and all other speeches while at treasury had been written by someone else as he humorously noted at his going away reception. so we now greatly look forward to hing him express his own personal views in his own words on the subject of financial challenges facing american households. michael barr. [applause]

>> thanks, steve. this shows what a wonderfully optimistic and naive person steve is. [laughter] >> he clearly doesn't know anything about academics and has never heard of the word "research assistant." [laughter] >> so i'm going to do my best to give the speech that i came here to give, but i can't promise that every word in it was originally written down by me. but i believe all the words i'm about to say. i'm thrilled to be sheer with you again to talk about consumers and their challenges in today's economy. and when i was here in december 2009, we were in the middle of a very, very large fight to get the dodd frank act passed. and the consumer federation of america was a -- many of you in

this room were steadfast allies of the president in getting that piece of legislation passed. and it would not be law without you. so i think you should all give yourselves a round of applause. [applause] >> i want to talk to you a little bit today about where we've been in the economy, where we've been in the state of the consumer protection and some of the challenges ahead. and when you think back for a little bit more than two years ago when the president came into office, our financial markets were completely frozen, our economy was shrinking, we were facing the worst economic crisis that our country had endured since franklin roosevelt came into office. our nation was losing nearly 800,000 jobs -- losing 800,000 jobs every month. small businesses were closing their doors. home prices were in a free fall.

in my view the president moved quickly and decisively to stabilize financial markets, reduce the widespread harm caused by the failed policies of the past, and restarted economic growth. and had he not taken such decisive action, undoubtedly the recession, as brutal as it has been for so many families, would have been far, far worse. and although the economy is now showing signs of improvement, and many employers have begun to hire again, considerable challenges remain for many american families. now, when i was back in government we were focused not only on repairing the economy but also on the urgent obligation to fix the failures in our financial system that helped to triggerrer the recession, the recession that has cost american families and small businesses so dearly. the passage of the dodd frank act in my view provides a strong foundation on which we can carefully build a more stable

system, a system that protects consumers and investors, that rewards innovation and that is able to adapt and evolve with changes in the financial markets. now, to be sure, the failures that led to the 2008 crisis had many causes. some here in washington, others on wall street and some on main street. regulators did not protect consumers to the full extent of their authorities, which led to unchecked lending that trapped so many families. firms and investors took on risks they did not fully understand. legal loopholes and regulatory gaps allowed large parts of the financial industry to operate without oversight or transparency or restraint. and many americans took on more debt than they could afford. and many financial entities encouraged them to do just that. for the one in seven americans who live in poverty, the millions of americans who live in fear of falling out of the middle class, these times have been particularly devastating. these families were the least

prepared to handle the shock of the recession. they had little or no savings to fall back on. and stood one medical emergency or one major unexpected car malfunction away from a personal economic crisis. when the crisis hit full bore in 2008, families found themselves overleveraged and underresourced. what we know is that going forward american families are going to need to try and save a larger share of income and to borrow more responsibly. today many americans are rediscovering the importance of living within their means. they're building assets by saving more and paying down debt. and they're growing more careful about how they borrow and how they invest. these changes are necessary and healthy, and ultimately they will build economic security for many families and make our economy stronger and more resilient. now, one of the critical ways we can member promote their economic security is by making consumer financial markets work better for american families.

we need to continue to learn more about the dynamics of these markets, including about individual psychology and behavior and the role of financial firms as they react to individuals and to markets. now, the evidence on consumer fall ability and on how firms behave in light of this fastability can suggest a framework for understanding and thinking about what types of consumer financial protection policies might work best in different markets. it's helpful to divide consumer financial markets into two buckets, those where firms are neutral towards or have incentives for overcoming consumer fallibility, and those where firms have incentives to exacerbate those very consumer failings. for example, providers of bank accounts have incentives to help individuals overcome the behavioral barriers to savings. lenders, on the other hand, have incentives to exploit by ass that cause consumers to overborrow.

and providers of all kinds have incentives to provide fees that are less salient for consumers or that take advantage of consumers errors in predicting their own product usage, late fees, over the limit fees and overdraft fees. the implications for policymaking in each of these two cases are quite different as well. in that regard, it's helpful to think about potential market interventions as falling into two different categories, change the rules of the game and changing the scoring. changes the rules means changing what market participants do, while changing the scoring means changing the incentives, costs benefits of market participants to choose one practice over another. interventions that change the rules and change the scoring can be used in -- scenarios where firms have incentives to overcome or to exploit consumer fallibility. however, the two scenarios may require different approaches. in the scenario where firms are neutral to or have incentives to

overcome consumer by ass, rule changing may be highly effective on its own. for example, the success that many of you know in promoting retirement savings through the use of smart defaults, automatic savings plans is a well-known example. in this case employers were at worst indifferent to and at best inclined to increase employee participation in defining contribution plans. but in cases where firms have incentives to exacerbate by as ease, changing the rules may not be enough. in these cases firms will have incentives always to work around the rules and render them less effective. for example, firms may comply with the letter of disclosure laws but act to undermine them by discouraging consumers from focusing on and understanding their true context. those of you who are familiar in the mortgage context know that it's often the case that a broker will say, oh, don't worry about that a.p.r. that's that thing the government makes us put on the form. let's talk about the monthly

cost. and in such cases, it may be necessary to change the way the game is scored to change the basic incentives, to make a real difference for consumers. so this behavioral framework i think has profound implications as the consumer agency and others think about how best to promote financial access. and default and defining contribution plan would serve as a prominent example of how behavioral informed innovation can have a significant impact on the lives of everyday americans. but there's a need for a lot more innovation that is informed by the interplay of these consumer psychologist and firm incentives in much more market-specific contexts. i tend to think of the challenges in this area as being a variation on the three-legged stool. i think there are three primary ways we need to make progress in consumer financial outcomes for american families in making -- in helping families have greater financial stability. the first is in enhancing basic

capabilities, financial literacy. the second is in promoting access that meets consumers' needs. and the third is in establishing strong protections for consumers. basic financial literacy is a necessary foundation for informed consumer decisionmaking. but to be effective, financial literacy must be combined with improved access to suitable financial product and strong consumer protections. so let me say a few words about financial access. i think that's one area where financial innovation is sorely needed. innovation may have gotten a bad name in the financial crisis, but it's absolutely essential to our financial services sector. and it's critically important to meeting the need of low and moderate-income households. a growing body of research has revealed the financial access gap in our country is sizeable. the fdic has estimated that

9 million american households run banked and another 21 million are underbanked, meaning that they have a checking or savings account but are not well served by these accounts and rely on costly alternative financial services providers. one challenge we face in expanding access, financial access for low and moderate income americans is promoting savings in the use of low-cost electronic payment systems such as accident cards. defaults, changing the rules may help in this context because the providers of savings and transaction accounts have incentive to alleviate consumer bee as. for example with respect to procrastination to gather deposits. however, defaults may be less effective on their own in this market as they are in the retirement context. the main reason for that is that cost to serve low income individuals with very small balances can discourage firms from serving low and moderate income populations. and in this context, the combination approach is needed. and may be necessary to change the scoring as well as the rules. such as by designing creative

solutions that help firms serve these populations with sustainable products. treasury, for example, took an innovative approach to direct federal benefit payments that relates to these insights. treasury is responsible for making ongoing payments to 70 million social security recipients and other federal benefit recipients, a and 15% of these individuals still receive their benefits by paper check. individuals who have an account can direct deposit. but individuals who are unbanked or prefer not to use direct deposit now receive payment on a direct express card. direct express is a card account platform offered by a bank according to requirements established by treasury, there are now more than 4.1348 federal recipient who have opted into receiving these cards which was launched initially in 2008. i think this is a prime example of the ways in which government can help make serving low and moderate income households more

sustainable for providers -- allowing for more favorable scale of operations for the provider. treasury simultaneously is undertaking other efforts to improve the electronic delivery of federal benefit payments. i should add often at the suggestion or i should say insistence of members of the consumer federation of america. for example, treasury established rules that better protect federal benefit payments from bank account garnishment in a rule that was just published. and treasury is enhancing requirements on the types of accounts that are eligible to receive benefit payments, including prohibiting benefits from being deposited into accounts set up for pay day lending type arrangements. as of this tax season treasury is piloting an initiative to improve tax administration by offering selected low and moderate income households the opportunity receive their tax

refund on debit cards. think think will provide important evidence about how to take this program to scale and what works and what doesn't work. so that's an example of access. we neededcation, we need access, but we also need time prove consumer protection. in an environment of weak and ineffective regulation, the tendency of some consumer financial markets to end up in races to the bottom as we saw so badly in the housing market is not likely to be overcome solely by informed consumers or better access. and let me give you some examples of what can be done in this area. as you know, the cart act which president obama championed and signed into law in may 2009, is an example of regulation written for a market in which providers have strong incentives to usher consumers into suboptimal choices, to rack up lots of late fees and to make up only the minimum payment each month.

and most of you know that nearly 80% of american families have a credit card, and a large portion of families carry a balance of on their cards. before the act, americans were paying roughly 15 billion annually in penalty fees. the cart act in my view was well-crafted legislation that come bind the requirement of common sense disclosure with protection from practices designed to make use of consumer fallibility for the benefit of the credit card issuer youer and to the detriment of the consumer. for example, the act banned unfair rate increases including rate indecrees on existing balances due to universal default clauses and retroactive rate increases due to late payments. -- including weekend due dates or due dates that change each month or payment deadlines in the middle of the day. and it ended the confusing and unfair practice of so-called double cycle billing. so i think this act is an example of careful kind of

regulation using a variety of techniques that can be effective. there are important changes in the dodd frank act to the housing market, in addition to the creation of the consumer agency that i will talk about in just a moment. most people don't know because the act was extremely long that it really fundamentally reshaped the rules of the road in the mortgage market. it banned yield-spread premiums. it changed the practices for hiding the bar on escrow and taxes. it eliminated the practice of steering. it provides that brokers need to decide whether or not an individual has the ability to repay their loan before they make them a loan. it reforms the disclosures under tila and resba. and it requires that secure itizers of mortgages retain skin in the game as a way of better ashrining incentives. so all of these change i think

are going to make a fundamental difference in the mortgage market. the cart act and the mortgage rules in the dodd frank act are two examples of ways in which regulation can be used to better improve consumer financial protection markets, but they have a disadvantage. they tend to lock in on the practices that were harmful in the past and provide some room for consumers to be abused in new ways in the future. and that's why it was just absolutely critical in the dodd frank act that we create a new consumer financial protection bureau. and i think the new bureau has provided us with a historic opportunity to build a successful regulatory structure for consumer protection, one that's designed to promote financial inclusion, preserve consumer choice and provide for more efficient and innovative markets for consumer financial products, markets that operate on a competitive basis of price

and of quality rather than on hidden fees. before dodd frank let's remember our system was largely incapable of supporting a successful regulatory structure for consumer protection. fragmentation of rule writing, supervision and enforcement made it impossible to create a comprehensive and well-calibrated consumer regulatory system. jurisdiction and authority for consumer protection was spread over many federal regulators who had higher priorities than protecting consumers. and banks could choose the least restrictive supervisor among several different banking agencies. a large number of nonbank providers escaped any meaningful supervision at all. and the bureau will for the first time now be able to provide the necessary mission focus, market-wide coverage and consolidated authorities. it will be an agency that focuses not simply on more regulation but on smarter, more key here end and respective regulation, regulation that is

designed and implemented with an understanding for and respect of chris cal models but is not blind to the compelling insights on consumers decisions derived from behavioral economics. regulations that seeks to balance a consumer's ability to find the most beneficial borrowing choices and a product provider incentives to hide that suitable choice on the other. i have to admit that what i find most curious about the voices of opposition to the consumer bureau and agency i remind you whose primary principles by statute are accountability, transparency, fairness and access, is that their logic rests on the premise that empowering consumers is somehow antithetical to free markets, that appear to be stuck in a debate that presumes that regulation and efficient and innovative markets are at odds. in fact, the opposite is true. markets rely on good faith and on trust and on fair dealings.

markets require transparentity that reflects economic reality rather than distortions caused by misleading sales practices and hidden traps. and the discipline of the market requires clear rules. i want to thank you again for the opportunity to speak with you today. you are all truly amazing. together you are building a stronger country. an america where hard work and playing by the rules means security for our families and hope for our future, where firms compete based on price and quality, not tricks and traps, and where old-fashioned virtues and falls of thrift are rewarded. thank you very much. [applause] >> thank you very much, michael. we have time for a couple of questions. >> hello. my name is carter dorery.

i cover full time for bloomberg. i've heard a lot about you although i came into the job just after dodd frank was passed. it seems to me like this is a crowd that would like to know whether you would be interested in running the bureau if you had the opportunity. [laughter] >> i certainly think that people here would approve and they would love to hear whether you are available for the job. >> nobody's listening. first off let me just say i'm thrilled we have such a thing as a full-time reporter on the consumer financial protection bureau. [cheers and applause] >> the only one, by the way. >> no. that's terrific. i am loving being back in ann arbor with my family and i love a wonderful two years in washington. so i'm happy to be where i am. >> hi, michael holt. first i want to endorse the idea that you should consider coming back to d.c. but i had a specific question.

i was intrigued by the rule on federal -- the new treasury rule on federal benefits going into approved or accounts with certain specifications. how will that consumer says here's the account i want it deposited to. how will treasury ensure these meet the standards in the rule? >> so there are two separate things. one is that account that treasury sets for deposits to go into. those are enforced because treasury sets up all the rules and exactly the accounts that treasury wants. there are the other accounts that people have their deposit put into. and in those instances in which the deposit account is other than what is permitted by the rule, we're going to have to rely on the first instance -- treasury would have to rely in the first instance on consumer complaints and information from the market. there's not a -- the part of treasury that is conducting this

activity doesn't have direct arm of the law in the world to do that. now, once the consumer financial protection bureau is up and running, the consumer financial pro force a wide range of consumer protection laws and will be i think an incredible additional partner at the table in shaping this market in a positive way. so short term relying on consumer complaints, and then going to the firm and saying you're not in compliance with the rules, and longer term the consumer agency is another avenue. >> the consumer federation of america and other consumer groups and those on the frontlines keep a track of consumer complaints, and historically auto sales and dealer practices rank number one. and as you know, the dealers got an exemption from the consumer financial protection bureau. could you comment on that?

>> it's wrong! [laughter] >> i think you know obviously when i was at treasury we were fighting very hard to get auto lending included in the jurisdiction of the consumer financial protection bureau for precisely that reason. it didn't make any sense to me that you could have a bank engaged in practice consumer -- governed by the consumer rules and an auto lender doing the same thing not governed by the rules. but that you could have as most often the case auto lenders packaging by getting consumers to take out loans on behalf of the banks who they sell the loans to and not be covered by basic consumer financial protection rules. so i thought i was a mistake not to treat auto lenders the way you would treat any other lender, that is to make them

subject to the jurisdiction of the bureau and to make them come into conformity with basic fairness and practices in the consumer laws, and that practices as you noted -- and you're the expert in this -- the prices in this area are atrocious, have been. lots of auto lenders do a great job. lots of auto lenders are completely on the up and up and don't have any problems. but where there are problems there are very, very serious problems. racial discrimination, overcharging, padding, failure to disclose, appropriately the fees involved, and it's a situation in which consumers are often quite vulnerable because they think they've made the choice that mattered to them, which is figuring out what car they want. and then they thought they did the other thing that was really important, which is negotiate a good price for the car. but it turned out they stopped

working when all the action kicks in, which is how much you pay for your credit. and so i think it's a real problem. >> we have time for just two more questions. >> hi, michael. i'm margo saunders with the national consumer law center. >> and you need no introduction. >> and i thank you on behalf of my colleagues and our clients for the tremendous work that you did while you were in washington. [applause] >> thank you. >> you didn't name one of the real victories in the dodd frank bill that treasury was largely responsible for, which was the remittance bill, which significantly provides protections for remittances sent by people living in the united states to foreign countries in an area -- this is an area which had no protections whatsoever and now has dramatically new and great protections. i do have a quick question. treasury has indeed done great things in regards to protecting

social security and other federal benefits. you said a minute ago that treasury had established protections for accounts into which federal benefits would be deposited. and i follow this area pretty closeliers and i must have missed something because what i have seen is the great new protections on garnishment, the good new protections for prepaid cards, the new protections or ongoing protections in direct express. but there a regulation -- >> i did mean the card-based accounts. so there is no general treasury rule in this area with respect to direct depositing into a bank account. now, the bank accounts themselves are going to be, as you know, completely covered by the the consumer financial protection bureau. so the rules and regulations that will come in that area and eventually in the card area more

generally i think will have a more natural home in an agency that is set up to protect consumers. so i don't think there are going to be gaps in that regard. under minn's, bill, we're obviously thrill today get remittances into the dodd frank legislation. i think it's an example of where research can really make a difference in policymaking. i'd been doing research on disclosure in remittances before coming into the government, both on my own and then with apple seed foundation that many of you have worked with. and i think that research helped us convince people that it was putting the energy into regulating into this area where they said before, oh, it doesn't seem like there's a real problem. i think people could see there was a real problem. and i'm very happy that it got in the final bill. >> hi. my name is pamela chance in the numerica foundation. thank you so much for visiting and creating or being part of

creating c.f.p.v. moving forward what do you think is necessary to ensure that it fulfills the mission that it was envision today care for? >> well, i think that one of the things that we tried to build into the consumer agency directly in the statute was a very strong role for public input and public accountability. so for example, the bureau needs to review its rules every five years and get public input on how it's doing. the rules that are out there. the agency is going have a consumer advisory council for public input. there are a whole bunch of transparency issues built right into the statute. so i think one thing you can do is make sure you're affording yourselves all the opportunity to give input into that process. i think a second thing is more broadly -- saying this to steve before coming up here -- there is almost a collective amnesia

descending on capitol hill and in washington and maybe elsewhere in the country about the searing financial crisis that we went through two years ago. people kind of forgot we had it, forgot why we had it, forgot why we had to fix it, and are ready to go back to whatever we were doing before. and i think that's really dangerous for the country. so i think groups like yours being able to go out and say publicly and to provide evidence of past and current and ongoing harms that consumers are facing are an important way of reminding people why it is that we had to fix the system before. because it was deeply, deeply, deeply broken. >> this brings us to the end of this session. our next speaker is here and waiting to speak. i'm sure michael another five or

10 minutes if there's anyone else who has another question, would like to ask him outside this room. please join me in thanking michael barr again. [applause] >> and the next session will begin momentarily.

>> we're going to begin in about 10 seconds. my name is jack gillis. i'm director of public affairs at the consumer federation of america. this morning it really is a pleasure to introduce david strickland as the administrator of the national highway traffic safety administration. david began at ntsba in january of 2010 and quite frankly has taken on one of the most important complex and challenging jobs in america. fuel economy versus safety, the toyota challenge, reducing rollover deaths, drunk and distracted driving, regulating the largest industry in the country who produces a product that is responsible for more debt than injury than virtually any other product that we by -- death and injury. on top of that he's nursing back to health an agency that some would say has been asleep at the wheel for about eight years.

an agency that has the potential to save more lives than virtually any other government entity. whoo! that's david. prior to his appointment, david served for eight years on the staff of senate's commerce science and transportation committee and likely has worked with more than half the people in this room. as senior counsel for the consumer protection subcommittee he was a lead staff person on the oversight of -- the federal trade commission and the consumer products safety commission. he also served as lead staff person in the formulation of the cafe reforms in 2007, and in the reauthorization of nisa in the safety lou act of 2005. as you can see, he wasn't just the 101st senator, he was the 101st through 110th senator. his work in advising commerce committee members led to the inclusion of several important vehicle safety mandates, including the electronic stability control for every

passenger vehicle. david has initiated safety reforms and funding increases for the nisa see the belt and drunk driving programs and was named congressional staffer of the year by mothers against drunk drivers. and while neither one of these schools were good enough to make the mc, david is a graduate of northwestern and harvard law school. so with that i am happy to welcome david strickland to the consumer federation of america's assembly. [applause] >> thank you, jack. and i'm still bitter about the committee passing over northwestern. we deserved a bid this time! we deserved one! no. thank you. this really is a distinct honor and a privilege. i have had the privilege of speaking to thousands of people across america my past year and handful of months or so of

service to the safety administration. but this particular group when i received the invitation from c.f.a., this was an absolute must do for me. i had the honor and privilege of presenting to the assembly about two years ago when i was still a senate staffer doing the legislative update when i think the senate and the committee were still in the throes of the consumer product safety improvement act. and i know there is a number of people that i probably kept up late at night with strangle willed calls of desperation trying to get things worked out in that piece of legislation to reauthorize cpsc, which is another one of our sister public health and safety agencies that i'm so incredibly proud of. before i came down, i met with jack and rachel weintraub. and i was telling them a bit that it feels weird to be the administrator of the national highway traffic and safety

administration. not that i don't think i'm comfortable with the role or my love of the agency, you know. i really worked with three agencies on an everyday basis for about a decade. and they were all like your children. there is no favorite. whether it was the federal trade commission, whether it was the consumerd product safety commission or ntsa the and all these agencies did such a fantastic work in the way they served the american public. first and foremost were cpfc and ntsa trying to keep people alive. with the failed trade commission it is one sub a making sure people aren't cheated and screwed. so every day was a fantastic opportunity and challenge for me as a staffer. and i think working with many of you, frankly all of you and the agencies and the ngo's and the companies this that have been part of this assembly for so

long frankly billed my ethos in term of how we look at safety and taking care of people. and i think that ethos has been even more deepened and blessed with my work with my staff at the national highway traffic safety administration. i'm happy that my deputy administrator ron medford is here who is another alumnus of the consumer product safety commission and another proud warrior in the fight of keeping people safe and alive. and throughout his entire career in government service. and it really is for both of us as the two agency leaders to come to work every day with our portfolio. as jack alluded to, this job is really -- i tell folks and people think i'm being hokey about this -- but i personally think i have the best job in federal government. is i mean, i guess for me. i can only speak from my own experience. but it's the best job in federal government. i have the opportunity to work with fantastic technology, companies around the planet that

are looking at ways to improve individual mobility. things that sort of enrich every american's life. the one thing that i know because i have anytime my car, people have personal relationships with their vehicles. there is nothing more personal than a car. and the voice al exciting choice that you make at the dealership, trying to figure out what you want on the car. and then it becomes a tool and it's part of your life for maybe 10, 15, in some instances 20 years. and that part he's is fun. but then there's the people part of it. recognizing that while vehicles do have that connected, special relationship to every person -- and when you're talking about 255 million of them, the unfortunate circumstances of how many people lose their lives because of highway traffic accidents. we're talking about 34,000 people in 2009. so the joy and the excitement about the product and what it

does and the freedom it's created for everyday americans also creates this huge risk. and frankly this huge tremendous loss of life and how we have to balance that as ron and my agency every single day. how we can get those numbers down. how we can better use our authority and use our rulemaking ability and use our research. how we can better work on our behavioral programs, whether it's impaired driving or if it's fatigue or if it's wearing your belt or if it's speed control. it really is a portfolio of issues. and it's just -- twin cities nothing parallel to -- there's nothing parallel to it especially for a person that so desperately believes the need for the government to help support not only how people mansion their drive task and their safety but how we support the evolution of transportation and individual mobility.

it's something that i see at my dex every day and i would love to say every moment has been joyous and stress-free. but you know something? i would rather frankly the team that i have on board doing the challenges of this agency. because the staff is fantastic. they have done so much, and they are such true believers in what they do. it really is a fantastic opportunity for me and for ron to be at the head of this agency. now, i wanted to sort of talk about in general sort of -- i mean i guess a question and a notion of challenge, from us as a regulator and all of you that work so hard every day in consumer safety. and i've learned a lot this past year, specifically about safety culture in the transportation realm. and i thought i had a very active safety culture. when i've