>> you published this report in december, 2009 in which you made the point "better regulation of the consumer marketplace woodbury -- would result in more affordable products. ." you mentioned in complete price competition which makes it difficult if not impossible for consumers to comparison shop for products based on total cost. would you explain the concept of the incomplete price competition and the effect it has on consumer finance market? >> i think the consumer

financial protection bureau could end up being a major source -- could end up benefiting banks and credit unions by lulling the playing field within the financial services space. there are economies of scale in areas of credit cards and debit cards. smaller financial institutions cannot match this. having the consumer financial protection bureau encourages more transparent product where consumers are able to compare apples to apples where they can -- they don't have to guess what it will cost for them to use a credit card over your but they can know that if they use this card it will be a certain cost burden they can make an informed comparison like when you go to the gross restore. -- when you go to the grocery store.

these financial institutions can then offered good product and can compete fairly. their price terms are up front and clear and part of their price terms are that they have excellent service. often, they have to compete with large financial institutions that have an institution to hide the price terms in small print. >> you are talking about improving transparency been a very much so. >> if you were them, how you do that t? >> first and foremost, you focus on disclosure of information. the way we have done consumer protection in the united states since the truth in lending act is primarily focused on disclosure and try and improve the disclosure forms. they started doing that with

credit cards. they're trying to boil down 30- page credit card agreements to a one-page agreement that we can read in plain english. >> is there some other place this makes sense to disclose? is there online possibilities? >> that's one possibility. it is not clear exactly right answer is. the task before us is to figure out what is the optimal way to do this. i expect to the cfpb that online comparisons would be like comparing cars comparingcarmax. >> what is your best guess as to how the market reacts to this? >> if i was a financial institution that made a lot of money by hiding terms, i would not like this. if i were a small financial

institution where i had excellent customer service and straightforward honest products, i would embrace this wholeheartedly. big don't fault the institutions for making a profit but the market should encourage this and that is a competitive aspect that transparency allows. i would like to think that they would eventually embrace this and see this as a marketing opportunity, like a carfax. i would like to think they would raise this at some point, recognizing the cost and the .ompetitive equality i >> you mentioned that your

concern is the cfpb would put in place an anti-credit policy. can you explain why that would be? why would we have an agency with an anti-credit, anti-bar when coming into this lending policy? >> the philosophy of many people behind the consumer financial protection bureau is really that there are some fundamental problems in the financial market, there is a belief that consumers don't know what they're doing and consumers make mistakes and what you need is a nanny -- a super-nanny to help -- to tell consumers what they are doing. you tell financial institutions would kind of product they should design, what kind of product they offer to consumers. if you look at the writings of many people involved in the agency, there's a tendency on their part to believe that

borrowing money is not a great thing and the consumers get sucked into bar went too much. how you react to that if you are an agency with that belief? you put policies in place to make it more difficult for banks to lend money to consumers and you put policies in place -- one thing that has been suggested that you-- is what is kn tell i financial policy that they tell consumers that this is the product that we have to give you and make it difficult for the financial institution to let the consumer take another product. that makes it difficult for the financial institutions to lend money to the consumer. if i can elaborate a little bit -- i think history tells us that the notion that this regulatory agency is going to lower prices

to consumers, that this massive regulatory agency will lower prices to consumers and will increase competition is extraordinarily naive. we have had the experiment with the card act. one of the effects of this in this marketplace is that prices have gone up to consumers and it has been more difficult for consumers to get credit. why is that? one of the things that the card act does is it makes it very difficult for financial institutions to price risk. it is not the case that credit is like a car or a toaster. the difference is that when a bank extends credit, the chances are each one of us has different risk characteristics and the bank has to learn how to price that. the card act made that more

difficult to do. one consequence is banks have to increase their prices and reduced the availability of credit. the other example i have written on recently is the durbin amendment. i think it is pretty clear from how the market has already operated that that will have a clear affect on the marketplace. it will increase the price that consumers pay i don't think it is plausible that this regulatory agency will result in lower prices for consumers. i don't think there is a lot of experience in history that comports with that particular view. >> the ability of the fsoc to overrule the cfpb -- es. warrms. warren says you have tot

seven out of nine members to vote and a limitation on that ruling is that it would have a systemic risk to the american financial system. that means the cfpb could eliminate particular businesses particularfsoc would not have the ability to overrule it. why is the fsoc not a powerful tool? >> for both the reasons you mentioned. the supermajority requirements is very unlikely to be met for the standard that has to be applied her friends the entire u.s. financial system with incredibly high standards. the process that is employed -- typically, the way agencies discuss proposed regulations is there is a process before the rule is issued. this says that the bureau issued its rule and if somebody doesn't

like it, they can start a very public prices to overrule it. -- process to overrule it. nobody will want to do that. >> -- i could not help but think about a rap group the has a song entitled," get rich or die trying." the reason i say that is i want to do everything in my power to protect my constituents who are suffering every day. also the constituents of others. i don't want us to throw up our hands and say that we cannot protect consumers.

we can't do it and they effectively and efficiently. i'm sure you are talking about trying to get to that. he may have a disconnect from the people everyday who pay the high bank fees to and who have been messed over over and again. they get on the early bus. f 5:30 in the morning and a score of other people's floors and they pay these high fees. they pay their loans throughout the district. people who rent them appliances that they can buy, that is why we need this protection cfpb and we all need to work to make it work. the american people are paying for this and they deserve to be protected. they need protection. professor levinson you published

a paper of the consumer financial protection agency act which was a critique by a study by david evans and it found that the cfpa act which created a consumer financial protection bureau could increase interest rates and reduced new jobs. you explained that the report was just the latest "o'neill of the statistics to come out of the banking industry." you pointed out the study was funded by the american bankers association. is that correct? >> that is correct. my particular objection with the paper was that it tried to estimate an increase in the cost of credit due to the creation of the cfpb and its methodology was

this -- it said here as another piece of legislation dealing with interstate bank regulations and wants to be found that resulted in an increase the cost of credit x basis points. therefore, it will result in an increase in the cost of credit of x times some number they pulled out of the air. it was to take a multiplier and apply that multiplier to a study and say that will be a fact of the cfpb. i was rather shocked. this was very surprising to see. you go ahead, dr. evans. >> with all due respect, professor levenson has not done any research.

when pressed to say what will happen to interest rates and so forth, the reaction was that we don't really know. what professor wright and i try to do was a steady. the particular study that professor levenson has pointed to is an analog. it was the best analog we could find. it was not perfect. it was something that was comparable to the cfpb. it provided a baseline for the imposition of credit to the economy. that particular study showed that another regulatory bill, as a result of state restrictions on banking and credit and so forth, led to an 80 basis point increase in interest rates. that is what you typically get with regulation. we did a comparison and made the point that cfpb would allow a

greater set of regulatory restrictions on lending than that. we took that as a basis -- >> i have to give a professor chance to respond. >> what to to multiplied it by? some number yenta out of the air? that is not scholarship. you said this was 80 basis points and the interest would be 160. you can't do that barry would have to give a chance before we find out. >> my time has expired. >> i recognize mr. ginter for 5 minutes. >did you pull a number out of the air? >> no, if you look at the paper, we used that as a baseline of 80 basis points and we couched in

very careful language. we said this is inaccurate and this is the best we can do given the available evidence. we gave the reader an explanation as to why they should consider multiples of 80 basis points, twice or three times that, based on a lengthy analysis we did in the paper, pages and pages explaining why the cfpb has the powers and the likelihood, particularly in the earlier version of legislation, to increase interest rates. with all due respect, he has produced absolutely nothing on this topic. the notion that we are engaging in this exercise and creating this mess of agency and the best we can get is we will have to see, for me, that is not good enough. >> thank you for that testimony. i would concur that it is not good enough for congress either or it is -- or it shouldn't be.

this issue is too important for us to guesstimate. . all members of congress want to solve the problem but i have failed to see how this agency will correct the actions that led up to what you had talked about that built up to this. the one question i would have for you, i think you had made some statements that if they cfpb have existed from 2004- 2008, this could have been averted. i heard the testimony earlier in the first panel as well. my question would be -- even though this entity is supposedly going to have some responsibilities of other entities that should have

prevented this or should have maybe suggested this was going to occur and we could have put some stopgap measures into place, can you tell me what exactly this agency will do in the next 12 months? to ensure this would not happen again? >> congress already took care a lot of the first step. the dodd-frank act undertook a major reform including a requirement that for non- qualified mortgages that lenders will have to verify the ability to repay. that seems like an obvious first that than on glad congress took it. i think it is very important to note a major step forward with the cfpb is changing the regulatory architecture.

when bank safety and soundness previously was put together with consumer protection, consumer protection ended up being subordinated. entities like the office of the comptroller of the currency would turn a blind eye to predatory lending practices because there were profitable. they did not want to stop the music at the party. the cfpb does not have that bank profits of -- profitability mission. therefore, it is an agency that is incentivize to make sure there is good consumer protection. that good consumer protection, did not that exist in these other agencies? their missions were not to have bank profitability. >> sure they were. the bank is not profitable is not safe and sound >> you are saying their sole focus was bank profitability? there were no protections or concern or issues with respect

to the consumer? >> virtually none. i can give you some examples. the fed reserve had the power under the home owner's equity protection act to pass regulations that would have curbed some of the worst abuses and did not act. >> would fannie mae and freddie mac fall on to this? >> they added a side story to this. the real problem was from the private label securitization and that spilled over into fannie mae and freddie mac. they're not government agencies. there were not tasked with consumer protection. fifa was not tasked with consumer protection either. >> my time has expired. >> mr. quigley is recognized for five minutes. >> i appreciate the disagreement here. our judicial system is built on

the zealous advocates disagreeing. we would like to think we move toward the truth with that. toward that end, while i recognize that we will not hold hands and sing kumbaya, it is nice to see this warm and fuzzy moment. dr. evans, the professor's comments about transparency -- while you may disagree about this agency, can you talk about how transparency might help this industry and if you agree or what parts of transparency might improve things from the consumer's point of view? >> that is a fair question. let me start out by saying that i am not suggesting that they're not problems to be self. there are a ton of problems in the lending industry. there are lots of problems that

consumers have faced. i would be the last person to deny that there's a set of problems that some agency needs to deal with. one of the things that is beneficial for consumers is transparency. it is not a good thing when banks hide the ball. it is not a good thing when consumers are attracted to doing things. it is certainly the case that there are some members of the financial-services industry that have acted badly. i am the last person to suggest that everything is okay and there are no problems. i am in favor of consumer protection, consumer financial protection. i think this agency can do lots of good things. the one qualification, the thing that i would like to get across, as with many things, we have to have a perspective on the marketplace.

by and large, this is an industry that does a lot of great things. it helps the people in the district in lots of ways. we have to have the perspective that while there are bad things going on that we need to take care of, it is also an industry that does a great deal of good for consumers. and small businesses. they need to be conscious of the bad things going on but it also needs to recognize that the bad things are often exceptions and there are lots of good things we need to make sure we don't harm. >> would you suggest the bad things are in large part undertaken by what was deemed to the shadow banking industry? when this bill was being discussed, many of the largest financial institutions were supportive. there were not for this agency. there were certainly for

somebody going after the problems of what was deemed the shadow banking industry. if you can use a different term, that is fine. because'm hesitating one of the things that professor levitton and i agree on is that some of the larger institutions engaged in practices that were not a great thing for consumers. there are elements of the financial-services industry whether it is large or whatever, there were a link issues and those issues i think should be appropriately dealt with. i don't want to draw a dividing line between big financial institutions and the shadow financial institutions. the shadow financial institutions awhile we think of them as charging high prices, in some cases, they are also meeting a consumer need for

people that are not able to get loans from the large financial institutions but have a need that needs to be served. i don't want to suggest that there are not problems there but we need to recognize that because we say payday lender, not all payday lenders are doing bad things and not helping consumers. >> i appreciate your candor. i would suggest to all the witnesses here that kind of candor helps us get to the truth in the end. there'll be another day and another issue and another bill. what we're all trying to do is help all of our constituents. that helps and thank you and i yield back. >> i want to follow up. i understandi, consumer protection.

there is either redundancies or, in some circumstances, additional burdens and some regulatory requirements. i think some of us would agree with the philosophy or notion of the cfpb. i have great concerns about the structure. i have great concerns about the ultimate power that can be provided to this one individual and the individuals within this organization. i have serious concerns about the funding of the agency and a lack of ability for this agency to be called in from of congress. -- in front of congress. those are concerns that anyone in congress should have. people in this country will rely on congress ultimately to make sure that the right things are being done. could you talk a little bit about how this agency is structured and some of the

problems we should consider or see in the future? what alternatives do exist or than thes exist rather structure that has been outlined in dodd-frank? >> i think the federal trade commission is the obvious model for how this thing should have been set up. i think this should be given to the federal trade commission and we could go home. i think the federal trade commission is a much stronger, capable, effective agency precisely because all the apparatus that is set up around it -- multi-member commission, internal checks and balances, congressional oversight, those things make those that -- that agency better. an agency lacks all that is prone to tunnel vision and naval

-gazing. i think this should be re- formulated along the lines of the ftc. >> can you expand on widely cfpb does not have a commission? does that suggest that the other commissions are necessary? >> it seems to suggest that if this is right, all the other ones are wrong and that does not seem plausible. if this is how we're supposed to set consumer protection, you need to wipe out the ftc which has been here since 1914 and replace it with a director. the occ basically does accounting. it does not too broad scale policy analysis for the sort of things we have here. i agree about the concerns with respect to access to credit with

the combination of cfpb, the durbin amendment, we will drive to be 1 million consumers out of the mainstream banking system. the cfpb is going to drive more consumers out of the mainstream banking system. we will put it in the hands of the payday lenders and check catchers and everyone else. payday lenders migrate online. people migrate to pawnshops. we're talking bad situation when you go in with good intentions, you end up hurting the people you intend to help and that is what i am concerned about. >> to follow up a little bit -- i don't know that you heard earlier testimony by concerns about occ vs. cfpb. i believe there are clear differences. can you talk about the differences between the occ and the cfpb in terms of oversight?

>> the clearest difference is that the comptroller serves at the pleasure of the present and the director does not for a director can only be dismissed for inefficiency, neglect of duty, or malfeasance. it is a restrictive standard. in terms of elected officials, there is much less of a check in on the controller. within the treasury department, the secretary has some ability oversee what the controller does but it is clear that the federal reserve has zero role with respect to what the director does propose to the key differences, i think it. >> i appreciate that. that is different than the testimony we heard earlier today. we heard they are similar if not identical and i would agree with you that the primary function of responsibility in how you can be hired and fired is paramount to

the job you are expected to complete. i thank the chairman for the time. >> mr. cummings is recognized for five minutes. >> i'm listening to all of this how we so easy to forget got here. we can have a testimony to paint over the past. we can talk about -- are mothers used to tell us to concentrate not on what you don't have but would you do have. i have been listening and i am thinking about $20 billion in credit-card penalty fees, $38

billion in overdraft fees. on try to figure out where we think this money comes from. this comes from regular everyday citizens. dr. evans, i heard what you said about the fact that these people who will read you washing machines -- will rent you washing machines for $75 per month when you could possibly by 14 $350, that they're doing a service. one of the things that ms warren talked about today is giving people information. i think information is power. i really do to his powerful when you use it. in some kind of way in this country, we have got to get to

the point where we don't let the little guy and lady go down the tubes. there is some way we have to get there. you will always have -- i live in the inner city of baltimore. i see it every day. they don't have the big, fancy cars. that may have a car that is five or six years old. they're making extremely high court -- by car payments. they're paying extremely high rents for what they are getting. they pay the most for food. the food is not very good. and they are constantly digging into a whole that gets deeper and deeper while a lot of the fog to get thesefees move into the suburbs. , into the mansions.

then these folks get up at 5:30 in the morning and are paying these fees to these people who are doing them a favor. they can't do for their children. the way they would like to or even close and they find themselves in generational cycles going down instead of going up. i go to every graduation i can get to and that people to get an education. -- the people who don't have paid the most and they're the ones that get royally screwed. i'm here representing my constituents. i am trying to make sure we find a way out of this. this organization ,the cfpb, was not established to be something

fancy and be able to say we did something. we want to make sure -- i thought that we got one republican vote -- want to make sure that we did something to take care of all of our constituents, i don't care where they live. the question becomes -- how you take this -- how do you take this and make it work well? so that those people don't keep going in a downward cycle? because they cannot afford the things they need because they just paid $20 billion in credit- card penalty fees, if they can get a credit card, of course. $30 billion in overdraft fees. how we make it work? you guys are the geniuses.

you are the do news. gurus. what do you say to my constituents? >> i have a lot of sympathy for your constituents and i understand the problems that they face. i wish i could tell you that i was here today and could give you the solution to all the problems you laid out. i think all of us would like to solve them. the one thing i would say to put some perspective on this is if you go 20 years ago, many of your constituents who now have credit cards probably would not have been able to get them. one thing that has happened is more socially economically and disadvantaged people have been able to get credit cards. they have been able to get bank accounts. that has helped them out. one area i worked on quite a bit, not recently bought a long

time ago, is minority businesses. i'm sure you have a lot of them. one of the problems they faced 20 years ago is if they want to get financing other credit cards, 20 years ago, 15 years ago, they would have had great difficulty doing that. they can do that now. i am not suggesting that your constituents don't have the problems that need to be solved. i would like to maybe persuade you a little bit that some of these financial services products whether his bank accounts and a debit cards, or credit cards, there may be aspects that you see as bad, i would like to persuade you that there is an aspect that has been pretty good. for your constituents and it is getting better over time. i would point out that my wife is from baltimore and she will be amused when i go home and tell her that you compared me to anything involvedrap.

>> thank you. >> thank you very much. in the last month or so, i happen to to visit a school in the inner city of manchester, new hampshire. many people of new hampshire as not the home to an inner-city but it has many inner cities. there are many liberals that our inner cities. i happened to be mayor of four years of that city. i have great empathy for those who are financially and socially challenged in this society. i think it is imperative and important for us to make sure that we have rules in place that allow a level playing field, to allow any individual if he or she chooses to succeed in life. of some ofeminded the kids that go to the boys and

girls club in my home town of manchester, new hampshire, where they started, where they are today. i am proud to be part of a family of constituents and community members who feel very strongly that it is our responsibility as americans to lead by example, to insure that the american dream is alive and well, and that anyone who wants a part of that american dream can reach for the american dream. my question would be best -- if there was an alternative that you would suggest, that would enhance that type of america that i could co-sponsor with the gentleman from baltimore and i would be happy to do it because i have great respect for him -- i have watched in serve with passion and compassion and i admire his approach to trying to

help his constituents and i want to be part of that solution -- if there was a piece of legislation that congress could embrace in a bipartisan way to make that american dream, whether it is in baltimore or manchester come true, what would it be? >> the things that are on the table and crown -- incrementally, i endorse these things. i would urge this panel to think aboutt --he cfpb will likely turn out to be a failure of these accountability issues are not fixed. this thing will run off the rails and it will be a job killer and will raise the cost of credit and it will hurt the people did specifically is intended to help. hopefully, that is unfortunate but i think that is entirely predictable i hope that causes people to reexamine this. i think there is an urgent need

and a great opportunity for a new approach to consumer financial protection. i talk about the market reenforcing regulation and market replacing regulation on the other hand. i am all for savvy regulation that makes use of technology, harnesses the power of competition and consumer choice. a lot of things this agency might do like the disclosure form would be great. paring back some of the mountains of john bett has been attached to the truth in lending act would be great. in order to bring about heightened competition and choice, we could do that. doing things like creating vague open-ended standards of liability like the ability to sue somebody for abuse of product because somebody in washington thinks somebody out there is too stupid to be able to understand the products that their purchasing not based on anything that i can tell, that

will not help people. the concern i have is for middle-class people to be able to have choice and competition and i am concerned about lower income people who already have very limited credit of. sin itoptions. that is not a good way to make their lives better off. when you get rid of payday linda, what happens? evictions go up, bounced checks go up, utilities shot off and they go up in a situation like that. the desire for washington bureaucrats to think that they know better about how consumers and people live their lives i think is a folly. i think we want to go in a completely different direction toward competition and consumer choice. >> thank you. >> the ranking member is recognized for five minutes. >> i want to thank the gentleman

for new hampshire for his kind words and i really mean that. thank you. i'm trying to figure out -- dr. evans, you were talking about helping folks, helping minority contractors. one thing i have noticed is that when we talk about minority contractors and not just them, one thing they talk about in light of all the problems we have been experiencing with the economy being able to get credit -- many of them had ever to lose but they couldn't get a line of credit for it was canceled. for some of these small firms, a $10,000 line of credit, that is

like $1 million. i was thinking to myself about this other question -- a lot of organizations are now spending a lot of energy and effort in this whole thing of financial literacy. how much does that play in? how much value does that have? sometimes, people don't know how to handle money. some people have never been taught. in balancing checkbooks. if you have fees for balance -- bouncing checks -- somebody told me once, a banker said if they

stopped bouncing checks we would be out of business. i think it was exaggerated a little bit but that is a lot of money. you bounce one and then you have a whole series and the next thing you know, you have bounced around the world. a certain part of it is personal responsibility but there's nothing like a person who doesn't know what they don't know. i was wondering how significant a role you think that plays in trying to help people. some people may be informed but they don't have the resources but there are other people that maybe if they were taught at an early age that a penny saved is a penny earned. if you hold onto it you are in good shape, however it goes. [laughter]

>> you are asking an economist whether we should have more economic instruction in school? yes, we absolutely should. >> do you think it helps? >> i do. i think there is not enough instruction in the school system and how finances work, how the economy works, and i think probably somethingadam and i agree on. getting more of that in society in the school system and generally in society would be a good thing. that is one of thing that thecfpb is supposed to be doing and i would applaud them for doing that. that would be helpful for your constituents and it would be helpful for a lot of people. if i can quickly comment on the first part of your remarks concerning the minority contractors -- i hear you. i know tons of businesses in the last few years that had their lines of credit canceled.

it was a very tough time the past couple of years for small businesses. what we need to do to fix the problem is we need to get money flowing to small businesses to get them moving again this probably is not the right opportunity to go into the reasons why they are not getting it but one problem is some of the capital requirements that banks and community banks have. community banks is one of the major sources of lending for small businesses. there are a multitude of problems that i think minority and other small businesses face that we could probably get some attention to them i will be in contact with you on that. >> to address small-business is -- it is important to note that construction of capital happened before any new federal regulation went into place. that started in the fall of 2008 in particular that was the

result of a lack of regulation. that was not caused by regulation. we need to keep that in mind. as far as financial literacy, is hard to argue against it except the evidence is not very convincing. there's not real good evidence the. wothat it works. i think i'm pretty financially literate and i guarantee you there are a lot of lawyers around the contract forms that i will not understand they are paid very well to do it because i used to be paid to do that. >> i recognize myself for the final five minutes of the day. that is by far the most shocking thing that i have heard here today that financial literacy does. not matter that is in same. with all due respect, i would tell you that if i look at a form and i say this too complex for me to understand, i will not sign it.

it is a skepticism that a bit of financial literacy -- and and not try to attack you -- may be your point is that financial literacy is not going to fix everything. i would accept that. >> unfortunately, not everyone is as skeptical as you are. i wish every one was. this is not financial literacy, it is skepticism. >> i understand maybe we should teach skepticism then i think that would be a very good thing. >> i want to ask a few questions that i want to better understand. the headline of this hearing "is who is watching the w atchmen?" i think the american people have

a lot of questions about this bureau. people letter providing credit, those who are accepting credit, those that hope to borrow, those that are trying to have a business providing some level of lending either short-term or long-term have a lot of questions about this bureau. is notclear thatms warren intent on being very forthright about her ideas for this. that is why we have an expert panel to get a diversity of views. mr.zowicki, in terms of the inspector general, would be useful to have an inspector general's c for thefpb? >> yes. >> dr. evans? >> yes. >> i would have to think about that comment than a mr.pincus. >> i would like to think about that.

inspector general has that job now. should it be a more focused focus? >> what would you think about that. >> i would talk to my client before get back to [laughter] u. >> smart man. cost-benefit analysis -- we have a greater portion of our government required to do a solid cost-benefit analysis. there is a lot of oversight and balance for that. would it be appropriate and helpful at thecfpb the subject to ira. >> yes, agencies are not normally subject to oira but it is because they a multi-member commission's. the substitute that in turn a process where you go through the cost-benefit analysis like we did that the federal trade commission. this has neither of those.

if you're not going to have a multi-member commission, you need to have some thing like oira. there is an inherent trade-off between higher costs and consumer protection and access to credit and other things and a serious, rigorous expert check. i think cost benefit analysis would be very valuable on-line the haphazard thing that is in there now. >> dr. evans, what is your comment? >>yes, if it is done seriously. >> what would you point to as a good way of cost benefit analysis being done? is a curling being done in government step >> i'm not an expert in this area. my impression and that is not being done very well. >> i would concur. the currentoira process is

currently a disaster. the cfpb statute requires a cost-benefit analysis for it it can be challenged in court it already has that big in. i know sure thatoira does anything except create an obstacle for government action. >> mr pankin stacr pincus. >> i think it brings an external writer but also brings other policy voices to the table. the oira process involves the whole government to have been put. that is what you want in an area where you have such a multitude of policy interests. >> thank you. it is currently required c for thefpb for cost-benefit analysis

for small businesses. >> my understanding is the c for the cfpb it is included. >> i believe it is an internal cost benefit analysis. oira reduce only for the small- business division. >> one problem a call all the things we're talking about only apply to the rules. the ftc has basically set standards for with for some actions. another area of other important discussion is where enforcement position gets taken either through settlement or whatever becomes something that prevails on what is the check on that? legitimate businesses will say they need to start complying with this. >> that was one of my questions. this is about the relationship

to the mortgage settlement. they're not intent on communicating very much of what they're doing. the agency is not up and running. that is a great concern. the balanced approach would have had a board oversee it. this was like the original proposal where there would be a -- internal debate and wrestling with rule-making rather than one director simply doing it. the cfpb will neither increase access to credit nor reduce the cost of credit. that is for certain. there's wide agreement on that. it is also clear that the current special assistant, the assistant to the president and assistant to the treasury secretary, ms. warren has been

calling the shots organizing this bureau. it has been a less than transparent operation, if we can be direct about it. her answers were less than forthcoming. they raised more questions than they actually provide answers. that is what we have learned over the course of the last three hours in this committee room. i appreciate this house testimony. thank you forwaiting through the afternoon and thank you for your forthrightness and willingness to engage in this discussion. it is enormously important not simply to policy-makers in washington, not simply to academics or business folks, but to the small business person who hopes -- the small person who wants to start a business. my dad wanted to start a business out of the garage. he started that business on a

credit card. that was something he told me never to do. except for that business with five kids through college, put a roof over our heads in an opportune. i want to make sure that people have access to credit whether it is a person trying to get the next paycheck or another person who has an aspiration of employing people and growing this economy. that is what it is all about. we can have a debate about how you achieve a c but thisfpb is not the constructs to make that more available and achieve greater opportunities for those individuals that we care so much about. thank you for your testimony and i appreciate your willingness to be here today. this meeting is now adjourned. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

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