of inadequate financial regulations, i have not. and neither have the millions of americans who lost their jobs, their homes and their savings and who are still waiting for their recovery. unfortunately these reforms have been under constant attack since the bill was signed into law. . .

passing the act was a monumental achievement. there is much work to be done. this will take time, but we know it to the american people to get it right. i think are -- i think our witnesses again for being here today, and i look forward to

your testimony. >> yesterday in touraco -- "the wall street journal" -- for millions of americans, the one- year anniversary provides little comfort as they continued to deal with the harsh economic reality with no innovation, and the growth, and virtually no job creation. the unemployment rate remains above 9% with more than 14 million americans out of work. secretary timothy geithner roche the ed obama administration had expected backing from both sides of the aisle, when the debate began, implying there was not in

need. the truth is there was a great deal of agreement on a number of issues, until the white house decided the only issue that mattered was the creation of a massive new consumer bureaucracy. chairman dodd and i agreed to create a consolidated banking regulator with the authorities of the federal reserve, occ, ots, and fdic would be joined in a single entity. it had the name of the financial institutions regulatory authority. there was strong agreement that the current regulators had failed and radical reform was needed. also agreed to elevate consumer protection, to equal status to provincial regulation. i've proposed, given the company -- given the consumer protection division. we agreed to permit non banks to

be supervised and subject to enforcement. we met the administration more than halfway on a number of issues. any hope for a bipartisan agreement evaporated when the word came down from the administration that it was going to be their way or the highway. a similar dynamic was worked -- was at work in the agricultural committee where senators have agreed on a bipartisan derivatives title, until the former senator from arkansas was told there was not going to be any compromise. secretary geithner also wrote senior republican negotiators on the senate banking committee were not a deal or are unwilling to define a course set of reforms that could support. the first thing the republican members of this committee was to draft a set of four principles

to guide our consideration of and regulatory reform. these principles that i have referenced would address all the major issues, including systemic risk regulation, provincial regulation, consumer protection, and derivatives regulation. also, republicans filed hundreds of amendments, and prior to the bill's markham, we were informed that not a single amendment would receive democratic support. it was their way or the highway. secretary geithner are also wrote a piece, "we have already turned a profit on the tarp investment made in banks." preferencetarp's ability are suspect at best.

the tax payers will still takes losses on auto bailout programs. tarp used taxpayer dollars for risky investments. i wish of the terms on any investment must adjust for risk. i believe such a and i wish would show tax payers were not adequately, kurt -- company -- compensated. what matters most is the long- term impact on the overall economy. on that basis, the record has not been good for american families. since tarp was enacted, the unemployment rate has reached an stayed at record levels, lending remains stagnant, and americans facing foreclosure. secretary geithner took place -- took credit for the banking regulations, as the most

important step toward diminishing the risk for future crises. i have been arguing that capital standards have been inadequate, while some bank regulators actively sought to increase bank capital standards and others remained on the sidelines right here. one of the regulators who did nothing to improve bank capital standards before the last crisis was the president of the federal reserve bank in new york. the new york fed supervisory responsibilities pincus cleave it the largest financial institutions that receive the largest tarp bailouts. who was that president that failed to oversee our largest banks? none other than our current treasury secretary. secretary geithner byrd wrote that the regulators have outlined major elements of

reforms to bring oversight transparency and greater stability to the 600 $600 trillion derivatives market. main street businesses had nothing to do with the financial crisis. dog-francs -- dodd-frank will impose huge costs when they least can afford it. secretary geithner ur said the administration has started the process of winding down freddie mae and -- fannie mae and freddie mark. actually, their shares are increasing. with other government programs, including the federal government now controlling 97% of the market.

housing finance reform has not even begun in the congress. secretary geithner claims that the success will depend on making sure that we can write sensible rules that will promote the broader economy. political connected unions and groups were among the biggest winners under dodd-frank. at contains an assortment of compensation requirements that harms shareholders by empowering special interests and encouraging short-term thinking by managers. 50 years ago president eisenhower admonish us all the guard against the acquisition of unwarranted influence by the defense industry and the pentagon. i am afraid that his words have gone unheeded in this context in that the only thing dodd-frank

has accomplished is create an analog to the military- industrial complex. it has created a cottage industry for lobbyists. it has turned the financial regulatory landscape into a nightmare. secretary geithner claims republicans are blocking nominations they can kill or form. senate republicans have been clearer that the structure of the bureau of consumer financial protection needs to be properly reformed before we consider a nominee to lead it. we have urged the president to adopt three specific reforms. establish a board of directors to oversee the bureau. diversifying the leadership of this powerful fledgling you're saying would ensure that consideration of multiple viewpoints. secondly, subject the bureau to the preparations process to

ensure that the bureau has an effective oversight and does not engage in wasteful spending. third, establish a safety check for the provincial regulators. one of the best consumer protections is a safe and a sound bank. i believe the most serving claim made by the secretary is that republicans for the forces of opposition to reform. the statement reflects the unfortunate view that anyone who does not support their idea of reform must be against any reform. that is nonsense. as i have explained and reiterated, there are numerous areas where republicans and democrats could have easily reached an agreement. unfortunately, the administration decided that there would be no compromise. the result was a bill that this hearing reports to celebrate. i do not believe that the american people are in the mood to celebrate yet.

thank you. >> representative frank, i welcome you today as one of the architects of the wall street reform bill. i want to thank you again for all your hard work. i know you have to get back to manage a bill on the house floor, so please begin. >> thank you. i am glad to be here, and i was struck by the bipartisan tone of the ranking member's statement. he was critical of the bush administration. i might not have anticipated that. as members remember, it was year of 2008 that we were summoned by secretary paulson and chairman bernanke to do the tarp. it was a bipartisan response to that that the judge, was very

critical of the tarp. i think he was unfair to the bush administration, but i appreciate the bipartisan nature of his criticism. i would note he said -- secretary geithner said -- rebutted that with reference to the automobiles. he said it was from the banks. we have not yet recovered the money from the automobiles. ford was not seeking any of the funds, actively supported that. the supply chain would have disappeared. when we talk about enhancing manufacturing, that was the single biggest thing that we did. i would say that the gentleman from alabama's description of

the process does not cover what went on in the house. i was not privy to those discussions. it was not a case where the administration told us to go forward. on the consumer bureau, i was the one he said the solution he talked about, namely, elevating the status bureaucratically of a consumer protection function with in an entity that was primarily a bank regulator would not work. there's a difference between having a regular and having it as one of the things that bank regulators do. the largest singular show of authority to protect consumers that existed before this law was passed was in the federal reserve, and when we questioned the fed, had little to do with it. i would note that i was struck

when the senator from alabama talked about it, that he appeared to think that mr. geithner was more important in the bush administration than the president's appointee. he served under ben bernanke, he worked with secretary paulson. if there is criticism, it goes to all of them. i think it is important that it be independent, that it not be a second thought from the bank regulators, whether one banking regulator or individuals, and i believe that will make a great deal of sense to give the consumer -- the gentleman said let's give them equal status tree you give them an equal entity, subject to others. the bill itself had a common theme. one criticism was that the bill

was to create. we probably exceeded the attention span of some members of the congress, but i guess they can wait for the movie. we are dealing with an interconnected system, and we dealt peace mail, and there was a central theme and it was that by sources of liquidity outside the banking system and by increased information technology, people in the industry have figured out a way to engage in lending while appearing to escape the burden of risk. they appeared to be able to afford risk themselves. is that not all white. it exploded on all of us. done is make people be responsible for their risk. one issue that has come up, and i dealt with this with some of my friends, risk retention. i urge people to look at a book, when people make loans and

have no responsibility for whether or not they are repaid -- that is a market incentive. i have been told by my friends in the banking industry, the regulators will tell you what is a good loan and what is not. we are on the markets' site here. i do not want to depend on the regulators to look at these loans. there are still loans that could be made properly or not, and if you rely on the discretion of the regulators, or t-bill market incentive in attention. if that is the case, for securitization, there's testimony before this committee, it was talked about securitization. that was 1986. if securitization without risk retention, which is not a

viable taxation without representation, if that is necessary for there to be a housing market, what were people living in before 1986 proved worth their no loans made before 1986? i am for an exception for those loans that are solid, but the notion that risk retention is an impediment -- that is where we are the concept. he cannot get insurance without risk retention, and some of my friends are falling into that trap once again. as to derivatives, the law does not mandate any requirement that half of its people who are the users of the commodity in question. it gives full discretion to the regulators to make differences and to focus on that kind of

transaction that aip engages in with other institutions. i would add -- if you want me to insert cards, i can do that. one of the things we have done that is and how rebecca cftc, and if it gets the funding to do this, to deal with speculation. there is a legitimate argument about speculation. it is probably the case that 30 years ago and may not have done so so much. what has happened is there is a greatly increase the amount of liquidity and great sophistication in information technology. if you look at the charts, individual commodities, it tends to be more of a uniform --now it is more individualistszed. there was an investor in the

home heating oil business - speculation- does add something to the price of oil. one of the issues is, will the commodities future trading commission exercise the powers we have given it to put limits on people who are not end users, so we are not trying to -- if you are somebody who never goes to a barrel of oil, if you are that category, we want to limit the amount you can buy, because we are told billions of dollars will be lost if they cannot trade in the financial area. where do those billions of dollars come from? those are two areas. whether or not we deal was speculation and risk retention, that is where i intend to keep pressing. i have thought the business

people, and the leading business people last week, and i and a stand people who think we have too much regulation, but the analog is to the pharmaceutical industry, where the major harmaceutical confempanies provide the fda enough money to carry out. the worst is that regulations on the books and have authorities that are not able to deal with them appropriately. this nickel and diming of the sec and the dftc does grave harm. for people who are prepared to have america a sustaining or, i was encouraged when the gentleman from alabama spoke

about the military-industrial complex. we cannot find $150 million for the cftc. the sec, that is an area where there is the tax payer money. fannie mae and freddie mac. i am impressed with the on- again, off-again nature of this with my colleagues on the house. my republican colleagues in the house talked tough about fannie mae and freddie mac when they were in the minority. when they are in the majority, something happened. they are affected by a strange kind of paralysis. last year when we dealt with this bill in conference, the republicans offered the hensarling bill, as amended. we said it was not germane.

we it has been seven months into the session with republicans in the majority. arling is a member of the majority. said. what mr. bauchus we would like a comprehensive bill. can we get a comprehensive bill? i do not think so. republicans in power in the house are much less certain. where are we? i will say i am somewhat embarrassed by this failure of memory, once he became a member of the majority. the gentleman from alabama blamed the obama administration. i feel like humphrey bogart,

when it comes to fannie mae and freddie mac, republicans cannot proceed without obama. why have we not seen that? because of obama will not let them do it. a recent entertainment and elegy was wilson, in which the republicans of the house are geraldine annika obama is the devil. the chairman said that he was asked by the obama administration to wait. i have checked with the administration. he misunderstood them. no one in the obama toinistration has passeasked hm wait. i have a role that i try to fall myself. no matter how tight the quarter you are in, avoid saying something no one will believe. the notion that they are not

acting on fannie and freddie -- esther garrett said it was not a simple problem. the republicans in the house have a bill opposed by everybody who is dealing with the housing market. that collection of radicals, all disagree with the plan, all think you have to have a more comprehensive approach. the republicans have this problem, their ideology and reality are having a heck of a fight. ideologically, mr. bachus says he cannot do anything until the obama administration lets him. the only time since 1992 that the congress has acted on fannie

mae and freddie mac was in 2007, 2008, when i was the chairman, and we got together a bill at the request of the secretary paulson, which president bush signed, which gave the secretary the authority to put them in a conservatorship. i agree with mr. shelby had too much of the market, but at least it is not that cost on us that it was before. they are behaving in a much more responsible fashion today. mr. chairman, i appreciate this opportunity. >> thank you for coming over here today. the need to get back to the house. senator shelby has a couple -- >> i feel at home here today. i count nine of my former colleagues here. >> a few observations.

congressman frank and i have sparred over issues over a number of years. i agree with him that there is a difference between managed risk and speculation. i think we agree on that. speculation will cause people to get into trouble. managed risk will help people. as far as fannie mae and freddie mac, the congressman knows when we were in control here and i was the chairman, which pushed hard for a reform of fannie and freddie. we got it out of committee. we pushed hard, we will continue to do that. i do not know what is going on in the house. i can tell you, we -- sooner or

later, we hope to do something substantive with fannie or freddie. we recognize they are the only game in town as far as -- >> i remember that in 2005 and 2006. as i remember, your poinopponent was mr. oxley. >> he had a weaker bill. he must have helped him. >> people said i was in the minority. if tom delay was susceptible, we would not have gone to the war in a rock and he would not have gone to the dance show. that was when the republicans

were in power, and we work together in 2008. we had cooperation. i think we stopped the hemorrhaging. if you look at the people that president bush put in power, they will tell you the problem we are facing is losses incurred before it went into conservatorship. since then it has been functioning in a much more conservative fashion. >> i will now call our second panel today. [laughter] we will keep the introductions brief. second panel, please come forward.

i will keep the introductions brief. mr. wolin is the assistant secretary department of the treasury. ben bernanke is the chairman of the federal reserve system. gary gansler is the chairman of the commodity futures trading commission. marty gruenberg the acting chairman of the fdic.

i also welcome you back the senate committee room. mr. john walsh is acting comptroller of the currency of the office of the comptroller of the currency. i thank all of you again for being here today. i would like to ask the witness is to please keep your marks to 5 minutes. your full written statements will be included in the record. secretary wolin, may begin your testimony. >> i appreciate the opportunity to appear before the committee. one year ago the president signed into law a comprehensive set of reforms for the financial system. were enacted in the wake of the most devastating crisis since the depression. in the depths of the crisis, the

economy lost 800,000 jobs per month. credit was frozen. markets were barely functioning. the administration and its predecessors put together a strategy to further pare the system. as a result, the u.s. financial system today is stronger, or stable, and better able to fuel growth. and ordered to protect our economy and create conditions for prosperity, we needed to put in place comprehensive reform of the financial system. that is why we proposed, congress passed, the president signed into law a sweeping set of reforms. the thought-franc wall street for a consumer protection act make changes to the structure of the u.s. financial system to strengthen safeguards for consumers and investors and to provide better tools for limiting risk in the major

financial institutions and financial markets. the core elements of all were designed to build a stronger, more resilience financial system, less vulnerable to a crisis, more efficient in allocating resources. these reforms responsive to the we this is that together brought our financial system to collapse. they include tougher constraints on excess of risk taking and leverage, stronger consumer protection, comprehensive oversight of derivatives, and they knew orderly liquidation of darby to wind it down a failing financial firm in a manner that protects taxpayers and the broader economy. this that you created three new institutions. the financial stability oversight council to identify, monitor, and respond to threats across the financial system. the office of financial research, to enhance the

analysis of financial data to policymakers and the public. the consumer of financial protection bureau, the help consumers make informed decisions and protect them from abuses in the marketplace. we are far along in standing up these institutions, and they had each begun to play their roles. as we move forward, we must continue to move quickly but carefully, taking the time we need to get things right. we must make sure our efforts are coordinated. we must make sure to take care to regulate firms in matters of her free to the risk posed to the system. we must be sure to work to improve the defect in this of regulation as we write a new set of rules. we must work with partners creigh level playing field with the high set of standards. we must make sure regulators have the funding they need to do their job. a year ago, dodd-frank was

enacted. these reforms were an obligation, not a choice. without them we could not build a system we need. a financial system with the stability and resilience necessary to support our economy and to protect it in times of stress. thank you, mr. chairman. >> thank you. >> thank you for this opportunity to testify. on the anniversary, it is worth reminding ourselves of what congress passed the reforms. the financial crisis was unprecedented in its scope. some of the world's largest firms collapsed or nearly did so, sending shock waves to the financial system. critical markets came under enormous stress. asset prices fell sharply.

the crisis in turn wreaked havoc on the economy's causing sharp declines in production and trade. extraordinary actions by authorities around the world helped stabilize the situation, but three years later the recovery from the crisis in the united states and other countries remains far from complete. in response to the crisis we have seen a rethinking of financial regulation in the united states and around the world. among the core objectives of the effort are enhancing regulators' ability to monitor threats to stability, strengthening both oversight and resolve ability of important institutions, and improving the capacity of financial markets and observed shots. first-come the bett

that is an approach that supplement traditional supervision and regulation of individual firms or markets with consideration of threats to the stability of the system as a whole. the act created a council of regulators to identify and mitigate threats to the stability across a range and markets. the council's monitoring efforts are well under way, and this is created a cost of atmosphere of coordination among agencies. the council is moving forward with responsibilities including rules where it will be able to designate utilities for

additional supervisory oversight. for its part the fed has made organizational changes to promote a macro approach. among these changes is the establishment of working groups to oversee the supervision of a large banking firms and utilities. this has a strong focus on the development that has implications for stability. we have created an office policy and research to help coordinate our efforts to identify risks to the broader system and to serve as liaison with the council. the second objective of the reform is the madigan threats to stability imposed by the too big to fail problem. here in the act takes a two- pronged approach.

this includes enhanced risk based requirement, credit limits, stress testing, and remediation regime and activities restrictions. the fed and other agencies face the challenge of aligning regulation with international agreements. these efforts are going well. the federal reserve and expects to issue rules over site of cfis this summer and we are on schedule to implement basel 3. and being too big to fail requires allowing a cfi to fail. the second part of the act empowers the fed and the fdic to reduce the affect on the system in the event of a failure to tools such as liquidation of authority and approve a

resolution planning. the federal reserve is working with the fdic to thecfis prepare for resolution by adopting living wills. the joint rule is expected this summer. reducing the likelihood of a severe crisis requires strengthening the resilience of markets an infrastructure. toward that end, provisions to improve the transparency and stability of the derivatives market and strength since he th -- strengthens the parts of the infrastructure. we and other agencies are moving this work for in consultation with the corporate foreign regulators. u.s. agencies are working to address structural weaknesses in areas not as easily addressed by the at, such as taconic repo --

such as the repo market. the fed is committed to the promulgation of rules that are sensible, protect smaller community institutions, and promote the sound extension of credit in the service of economic growth and development. the full transition to the new system will require more work by the public and private sectors, and we will learn lessons along the way. as we work together to implement reforms, we must not lose sight of the reason why we began this process, which is insuring access events like those of 2008 and 2009 are not repeated. thank you. >> thank you, chairman bernanke. german schapiro. >> thank you for inviting me to test a lot -- to testify.

following the worst crisis since the depression, congress passed legislation that is reshaping regulatory landscapes, reducing risk, and helping to restore confidence in the system. the ftc was given new responsibilities, and in past years we have made significant cross -- progress. we have proposed or adopted rules for about 70 of the mandatory provisions that were assigned to us. in my prior testimony, i outlined efforts to establish a process to help us get the rules done right. among our efforts we created internal working groups to coordinate the process and facilitate actions. we increase transparency and

sought input from the public. we forged collaborative relationships with other federal and state regulators. we engaged in substantial outreach efforts and group ipated in c meetings, including investors, academics, industry participants, and reviewed thousands of public comments. all these efforts are helping uswrite rules that protect the financial system without imposing undue burdens on participants. while some feel we are moving too quickly, i believe we are proceeding at pace that ensures we will get the rules right. i written statement illustrates the breadth of the activities

that have engaged the sec the last year. other priorities include completing the specialized disclosure rules called for in the act, continuing to establish a new regime for the over-the- counter derivatives market, strengthening oversight agencies, increasing oversight in important utilities, putting in place new oversight for municipal advisers, in commenting governance an executive compensation requirements, and gauging our foreign counterparts in discussions aimed at limiting potential for arbitrage, and making use of the enforcement powers to address wrongdoing. while the sec made progress, the provisions of the expand the responsibilities and will require significant additional resources to fully implement the

law. sec as president of first state of the limitations without additional funding, taking staff from other responsibilities and working without investments in areas such as information technology. while it is incumbent upon us to use resources efficiently, the new responsibilities assigned are so significant that they cannot be achieved solely by wringing efficiencies out of the existing budget. if he sec not receive additional sources, circumstances that contributed to the crisis will not be addressed. the sec not be able to hire the expertise to please these new areas. i would requires the sec let transaction fees to offset the annual appropriation of the agency, and regardless of the amount upgraded, because it will

be offset by fees we collect, it will have no impact on the budget deficit. sec efforts to implement the act had been extensive. we know our work continues. thank you for inviting me to share our progress, and i look forward to answering your questions. >> thank you. chairman gensler. >> i thank you for inviting me here to testify today, and i am pleased to testify on behalf of the commodities futures trading commission. it is a poor to remember why the law's reform is unnecessary. when aig and lehman brothers failed, we paid the price. all of your constituents pay the price. the effects of the crisis continued to be very real with significant uncertainty in the economy and millions of americans out of work.

although the crisis had many causes, it is clear the derivatives marketplace played a central role. they contributed to the product called credit default swaps to a bubble and the housing market, and helped accelerate as we went into the crisis. they contributed to a system where large financial institutions were all the sudden two interconnected the to be allowed to fail. swaps, which are still important for nt users, also in that moment of crisis concentrated and heightened risk in the financial system. what did the act do to address this? the act for the scope of the oversight of the cftc and for the first time will cover swaps.

act promotes market transparency, something that has worked in the markets since the 1930's, and as for real-time reporting of transactions, and bring those transactions to a central place. economists found that transparency reduces costs to users of markets. the act lowered risk to the public and the economy by regulating the dealers and moving that which we can to a central clearing. the act provides important new cityrcement authorities an agencies can better regulate for abuses. if finalized a rule on manipulation which is similar to what the sec has had for decades. i note the ranking member and ,

about speculation. congress mandated cftc set position limits for commodities, expanding the scope for swaps. the cftc is working with regulators right rules implement these provisions of the act. this spring we completed the proposed phase. now the staff and commissioners have turned toward final rules, approving 8 so far. we anticipate taking up rules having to do with her because of these -- having to do with repositories. as we finalize the rules reached out broadly to market participants.

this includes of round tables and public comments to consider how best to implement this. we're looking closely at invitation which helps lower costs and rescue it i would like to make note that the cftc taking on an expanded scope, a market that is seven times the size of what we currently oversee. the commission must be adequately resources to police this market and protect the public. without sufficient funds, there will be fewer cops on the beach, but also when we will not have enough staff to answer the basic questions for market participants and the public. in conclusion, we are working to get these rules right based on public input, but it is more important to get it right then work against the clock, and that is not what we are doing. we're going to get this right

and move forward. until the role writing process is done and it lets the rules, the public remains unprotected. i think you and i look forward to your questions. >> thank you, chairman gensler. >> thank you. members of the committee, thank you for the opportunity to testify today on the anniversary of the passage of the act. chairman johnson, i thank you for your kind words at the outset. it occurs to me that it used to be more comfortable for me to sit behind you than where i am right now. i am privileged to have the opportunity. the act for fighting the fdic with important new authorities in the area of deposit insurance and resolution that we believe will enhance stability and in

which we have made progress toward implementation. the act grants the fdic new authorities to manage deposit insurance fund in a way that will make it more resilience in a future crisis. the fdic has implemented provisions of the act that make permanent the increase in the deposit insurance coverage limits to $250,000 and provides insurance coverage on the entire balance of non-interest-bearing transaction accounts to the end of 2012. we have implemented changes in the assessment based mandate of the act which shifts the overall assessment burden from community banks to the largest institutions which rely less on domestic deposits for funding. the change in the base from deposits that assets will result in an aggregate increase of 30% in deposit insurance assessments for insured institutions with assets under

$10 billion. in addition the act provided the fdic with the flexibility in setting the target size of the deposit insurance fund. we have used the new authority to adopt a long-term fund management plan which should maintain a positive deposit insurance fund balance even during a banking crisis this preserves steady and predictable rates to credit cycles. this will avoid us to avoid -- during a night, downturn. the act provides for a new resolution framework to be used in those instances when we must act to mitigate systemic risk posed by the resolution of a financial company in bankruptcy. the framework includes a liquidation of party and a requirement for resolution plans that will be regulated this --

that will give regulators much better tools. if the act -- if the fdic is appointed as a server eyes as receiver under the authority, we're in are required to carry out an orderly liquidation in a manner that ensures that creditors and shareholders of perpetrate their losses while maximizing the value of the mineralizingets, hazard. critical to the exercise of this authority is a clear and transparent process. the fdic board approved a final rule lamenting the orderly liquidation of starting on july 6. fiscal rule frame work uses many of the same powers we have used to manage failed bank receiverships. the federal reserve board is working to issue regulations

implementing new plan requirements. the comment. -- the comment period ended on june 10. in order to carry out these responsibilities, the fdic has established a new office of complex financial institutions which will have three key functions. monitor the condition of systemically important financial companies from the standpoint of resolve ability, to oversee jointly with the federal reserve, the root development of resolution plans by this companies, and engage was revised as of foreign operations of these companies in regard to resolution planning. finally, the act contains provisions that will complement the ongoing basel forms that will make capital requirements more uniformly strong. . 171 @ states that capital

requirements for the largest banks and holding companies should not be less of the requirements that are applicable for insured institutions. the fdic and the comptroller of the currency finalized a role implementing this provision. we have made progress, but still have work at a bus. throughout this process we have sought input from the public and continue to report back the progress -- the congress on this progress. we have sought to make this progress as transparent as possible. fe, and i look forward to answering your questions. >> thank you. acting comptroller walsh.

>> fayed you. i appreciate the opportunity to discuss the progress toocc other agencies have made in implementing the act in the year since the law was passed. although we have weathered the worst crisis, it will be years before we put all its defects behind us. the act took steps to guard against future crises, and all of us are determined to implement those safeguards as quickly as possible. occ is involved in 85 projects stemming from the act, including a number of rulemakings will have an impact on the system. our biggest task has been to integrate the functions of the office of thrift supervision, but we have devoted effort to the transfer of supervisory responsibilities to the new cf

consumer financial protection bureau. i am pleased to report that on monday said 74 employees of the office of thrift supervision reported for g-i-s at the occ. have worked to ensure a smooth transition and we have succeeded in moving to a single regulator for national banks. we will need every bit of the talent and experience of former staff to fulfil our mission and the men and women joining us had been fully integrated into policy and field units where their talents can be utilized. we recognize the importance of communication to the industry so that thrift executives know what to expect from the combined agency, and we had 17 outreach meetings and had more than a

thousand a sale as join us. we have engaged in rule making this. today we posted a final rule that publishes those regulations that the occ is the authority to administer for. we're continuing to review regulations for those as well as our own. we we are exploring areas for a continuity of -- after july 21st. that rule making published in today's federal register also addressed the areas where dodd- frank made changes. the rulemaking scales back our current rules and a number of areas. the amendments eliminate the instruct or compare conditions from our instructions.

it enhances the authorities for the attorney generals. this also includes consultation with the -- over the past year, we have provided considerable support. we have worked to ensure cooperation between the occ and the new consumer bureau. in addition to participating in numerous briefings, we have assisted in developing the agency's procurement and personnel management prophesies to ensure the agency has the information it needs about the banks it will be supervising. we executed a memorandum of understanding that allowed us to share reports of examination, information on enforcement

matters and other confidential information. we have agreed to provide transitional support, including consumer complaints. we will operate our consumer assistance groups to handle complaints. the bureau builds their own capacity in this area. as we discussed in our last appearance, we participated in the interagency effort to create an oversight council. the council will be an important venue for averting and addressing future market disruptions. finally it calls for a number of rule making. clearly, we have a great deal of work ahead in implementing many

provisions but i'm confident we will get it done in a way that strengthens the financial system and protected against the kind of things that led to the last crisis. >> thank you for your testimony. we will now begin the questioning of our witnesses. will the clerk please put five minutes on the clock? >> i think it is important to keep in mind the damage inflicted by the crisis and what the wall street reform act will do to prevent or mitigate another crisis. could you highlight in your opinion the crisis and the most important benefits of the new regulatory framework. >> thank you for that question. the cost which i tried to enumerate are extraordinary. the financial system came to the brink of failure, the credit

markets froze up. in the end, our economy was affected. there is lost jobs, lost homes and so forth. a reason for all of that is that we had a framework for our financial system which was manifestly inadequate. we had no alternative but to do that. this does exactly that, it makes sure that our financial system rests on a more stable foundation requiring firms, especially those that are more risky to hold capital and to have greater liquidity standards and leverage complaints. this brought the darkness out of

-- this strengthened consumer protection because we know that consumers did not have adequate information and not in a position to make fundamental choices about the kinds of things they undertook. that led to enormous amounts of credit being extended in ways that they could not bear. the act makes important strides to put the -- to allow the economy to grow which is the critical need we have. >> i have a question directed at chairman bernanke, the acting chairman -- and the acting comptroller walsh. we are concerned about the unnecessary regulatory burdens

for the financial institutions that did not cause the crisis. can each of you describe what your agencies are doing to ensure that we have an appropriate set of rules. >> thank you. we agree that the banks are critical to our financial system. they had the ability to make loans and a local community that large banks do not have. it is very important to minimize the burden on those banks. first of all, blocked itself emphasized that it is very focused on the largest firms and the most complex activities.

they made clear to the smaller banks that they are exempt. we are trying in our rules to provide more guidance to the banks about what applies to them and what does not apply to them. i think that the small banks will benefit that the tougher rules will create a more level playing field. finally i would mention that the fed has made a very strong effort to reach out for smaller institutions. we have created a community bank council that meets three

times a year. >> this is a matter of significant parties. we take very seriously one of the challenges that the community banks have told us about is the number of regulations that are required by god frank. -- dodd frank. we provide a box that

specifically symbolizes the availability. we have a quick shorthand place to go to identify the relevance of the regulation. in addition, we have an ongoing policy and a review of the regulations that requires regular periodic reviews. that is something we are undertaking. finally, i mentioned that we have a advisory committee that has been extremely helpful. this would require are regulated institutions to fill out. in response to that review, we had created a new place which has consolidated everything and

this is a single place where they can go. this is a matter of ongoing attention. >> could you elaborate a bit? >> i have certainly joined my colleagues in expressing the same concerns and in fact the approach we're taking about 2000 of our 2100 institutions. we have substantial out reach. we have an internet-based system that allows them to come and look get updates on regulation and to remain apprised of things that are happening. certainly, they share the concern. they are not sure what affects them and what does not. we continue to work with them to understand those things. >> a thank you. >> thank you.

>> it seems to me that after most crises, we're told that if regulators only had more resources, they could have prevented whatever crisis was. as a result, the standard result is to grow the bureaucracies. dodd-frank fits this pattern. regulators have seen their power is grow. this also will add over 4000 new government jobs, many of them very well paid. the employees at the sec and other agencies can earn up to $230,000 a year. in the meantime, private-sector job growth has been falling. do we have enough government bureaucrats to protect the financial system?

>> let me go back to the premise of your question which is -- i believe there is widespread agreement that the regulatory structure before the crisis was inadequate. there was large gaps in our coverage. there was no one responsible for looking at the system as a whole. there was significant weaknesses in the structure of our financial system. i congratulate you and some of your attention early on to the capital standards and so on. i think that this is a pointless response. i believe that the dodd-frank covers the main basis.

you need more people to carry out more regulations and write more regulations. what we want is quality more than quantity. we want to make sure that there is clarity in terms of the rules. we want to understand the rules of the game so that we achieved these results that releases costs to the financial system. the fed does do regular cost benefit analysis of all of the rules and it is always our intention to try to meet the goals of the statute in the least costly way we can. >> did the inspector general

recently called that into question, the cost-benefit? there is methodology that they are using which the claim was antiquated. >> i believe that is correct. there have been several studies won by a group of -- i believe. minder standing is that the fed took a positive view of the consistent application of cost- benefit principles to the rules we right. >> it is my understanding that the inspector general recently revealed that the fed's internal policy for rulemaking procedures is more than 30 years out of state and therefore does not adequately reflect current statutory requirements to reform

cost-benefit analysis. the fed needs to step up to the plate, assuming it is right. >> if that is right, that is a statement about written policies. we are very attentive to the cost and benefits. >> i have asked you twice in restatements how they would exercise their authority under title 8 with respect to the financial institutions engaged in activities designated under that title. and both instances, you responded with a discussion of the regulation of the financial market utilities which does not answer the question. let me ask you again, what are the plans with respect to financial institutions.

what are the plans with respect to the financial institutions. these are engage by the council. >> i thank you for clarifying. i don't think i fully understand the question. title a has addressed itself to financial markets utilities. i think through the council there will be some that are designated. we currently oversee 16 clearinghouses and some of them will be that. now what is right the council will designate any activities. right now, i would suspect that unless the council somehow does that on activities, we will focus on one, two, three clearing houses.

>> they approve rules that laid the groundwork. will the -- provide clarity on whether or not they will allow clearing houses more time before a day except or reject the rates? >> i think that for most is up to the clearing house and the risk committee. this will have a mandate and it is important that they do it. >> will they let them do it? >> they get to decide and the mandate only happens if we also seek public comment. >> do you think that the ability of the systemically important clearing houses to access the discount window makes it more or less likely that the greenhouses

will accept risks or will you try to make sure that they don't? >> i think that it is our responsibility to make sure that taxpayers don't stand behind any financial institution. >> like we stood behind it before. >> i agree. i think the preferred outcome of the crisis is that we will do more that. i think we should do everything to ensure that the public not stand behind the clearing house. >> thank you, mr. chairman. on tuesday, the chamber of commerce released a report that criticized the federal agencies for not keeping up with markets and technology. chairman shapiro, the house

appropriations committee is proposing significant cuts. this is diametrically opposed that this request that you keep up with the markets through technology. >> under the house appropriation, we would probably cost about $10 million of our information technology budget and the end result would be the postponed investment in technology. i've talked with this committee. it took the two agencies many months to diagnose what happened because of lack of technology if. we're asking me to delay the modernization of the edgar system.

we would like to give our staff to hillary to analyze disclosure and also too much of the information that we will be gathering at dodd-frank. also the ability to bring in data as a result of dodd-frank. another area, the consolidated audit trail. these are moving forward. this requires that we have the capacity to invest in technology and we have not had that and under the house bill, we would not have that. >> technology is very important so that we can be inefficient -- and provide the public protections. we spent this year about $37 million in technology which is now less than most of the

financial institutions spend a week. we think it would be helpful to about double that and we have only asked for about 30% more people. technology is a way to be efficient on the people side and to oversee markets which are about seven times this size. we can aggregate that data and bring it in and use the computers to do that. the house appropriation bill cost us 15%. we cannot do any of that with a cut of 15%. >> this is almost sort of setting you up for not only falling behind these markets we're trying to give but we have a failing and we're not getting

any transparency. >> i think that is right. we will complete the writing process. it will be thoughtful. it will be longer than congress laid out. i feel that we won't have the people to answer the questions or have the transparency or to aggregate the market and put it on our website. public transparency needs the resources. >> we have said that we will not be able to -- of the dodd-frank rules. the other area where we will fall behind is that we receive about 2000 request a year in the reform of the world violence come requests for exemption, no action letters and our capacity to keep up with that kind of volume on a declining budget will be severely impacted. those are the things that the industry really wants. they need that guidance and that

relief from time to time. i think that everyone has a stake in these agencies being in a position to do their jobs. >> it seems that this is possibly the worst of two worlds. regulations on the books which were required to. the ineffective resources to respond to the interpretations of business and to respond promptly to requests. i would think that the business community would be worse off in this situation. again, the liabilities are on the books. they cannot get any traction or response. >> i think that is right. to follow what chairman bernanke said but it is in the interest of the industry to have expert people within the regulatory agencies to can do examinations and provide guidance and provide information.

they're people who regularly avoid following along with the hope that they don't get discovered. i think the vast majority will be laboring to do what they can. getting no help from guidance. >> thank you, mr. chairman. thanks to the witnesses for being back once again. my first question, i would like to direct this to shapiro. you know better than anyone, last year, the fcc developed a whole new set of rules and regulations regarding money-

market funds and tighten standards for credit quality and it has liquidity, shortened portfolio. this would reduce the risk that any run it would likely to occur. we hear discussions that there is also an interest in moving to a floating -- and what concerns me about the net asset value is the complexity of keeping up with the paperwork and even tax implications that could be very complex and onerous to what is a very large and important part of our financial system. my question is, is imposing the net asset value rule, is that still under consideration or is that off the table? >> the -- has taken a lot of interest in the money-market

fund issues. as you point out, we did do a complete overhaul of the money market funds. i think that they have been fairly universally apprised of being very very positive and very helpful to the resilience of the money market funds. we also have the shadow into cheese so investors can become -- to the idea that money does fluctuate. we have discussed these issues several times and we held a round table at the fcc with all our members in attendance and members of the industry and academia to talk about how we prevent runs on money-market funds. i would say that we are actively discussing floating any of these and the ideas that were raised in the president's working group.

the industry came forward with the idea of a liquidity exchange bank. there are a number of areas where we're having discussions. i would say nothing has been decided but we continue to seek public input and our regulators and put on what we can do to ensure that we don't have a situation as we did when the reserve fund broke the -- and caused a run on money-market funds. >> there is an absence that a floating nav would solve the problem. i have a second question. this has to do with the proposed rules for swaps under title 7. my understanding is that these rules would require the subsidiaries of american banks

operating overseas and doing business with counterparts that they would nevertheless be required to hold margins on behalf of these counterparts. it is my understanding that the europeans and asians have not imposed a comparable requirement and therefore i am concerned that that would put our firms at a competitive disadvantage with respect to transactions that don't occur on u.s. soil, upload have an american counterpart. are you concerned that we are heading towards putting ourselves at a competitive disadvantage in this area? >> i thank you for the question. i think not just in the marching area but even more broadly, we have been working with international regulators because capital and risk knows no geographic border. it will move somewhere else on margin. we are trying with treasury which has been part of this. also the federal reserve and the sec to have an international

approach to the marketing regimes. i will defer to chairman bernanke because we are only setting margin for the non banks. there is a jurisdiction issue. >> you are absolutely correct. those margin rules for foreign operations are maintained and europeans and others do not match it, that would be a significant competitive disadvantage. i think the best solution, which we are pursuing with some deciduous this cost that we're pursuing is that we get an agreement on the rules. -- i think the best solution which we are pursuing is that we're pursuing an agreement on the rules. we're working on that. if that does not happen, we would need to think again about how to meet the dodd-frank

requirements for improved safety which is what margins are intended to achieve, without causing our banks to have a disadvantage. >> it seems to me that if we do have a global uniformity, that obviates the need for extraterritoriality in our regulations in the first place. secondly, with respect to margin requirements of end-users, as we all know, that can be disruptive to the end user to hedge risks, and therefore problematic. at the end of the day, it is a credit decision the banks are

qualified to make. "at least in what we proposed, the non-bank dealers would not be required to collect or received margin from the non- financial and users -- in users, the non-commercial companies. >> news reports came out this week from the associated press and reuters that alleged that despite regulators' assurances that rowboats signing was being fixed, the practice -- robo- signing was being fixed, the practice is still widespread both for foreclosed homes and homes that are not in a foreclosure, which amounts to forging documents and in some cases rumpling foreclosure and on people. that is why my colleagues and several members of this

committee and a dozen house members as well have written to the occ, the federal reserve, and the fdic, urging that you make the foreclosure reviews and other foreclosure-related documents fully transparent, and that you released the results of those reviews on a bank by bank basis, so the public can evaluate the performance of each bank. there is a tremendous interest in the public seeing these problems properly resolved. some want to ask those three agencies, the fed, the fdic, and the s.e.c. -- will you release the foreclosure reviews on a bank by bank basis? will you released the access plans that response to problems in the consent orders? what about the engagement letters for the supposedly

independent consultants hired by the banks to perform for closure reviews of the banks? >> we are as concerned about these issues as you are. we have issued cease and desist letters. we have told the banks they have to engage independent consultants. we have been making sure that they are independent, providing supplementary diagnosis over what we have done as well as action plans for the banks. we will be both reviewing those action plans and the conformity of the banks to those plans. our current plan is to provide a report. we will share with you, obviously, the report. that will explain what the findings were and what the proposals were and what the reactions were, and the performance of the banks. >> i am sorry to interrupt you,

but i have less than five minutes. i have a specific question. are you going to release those three entities i have asked? >> may i confer with my legal and supervisory teams and get back to you? >> certainly. >> we will certainly be, as chairman bernanke indicates, releasing more information. i hate to interrupt you, but i have a very specific question. are you going to release the mortgage services action plans, responses and consent orders? are you going to release a foreclosure reviews on a bank by bank basis, and are you going to reduce the letters from the supposedly independent consultants? yes or no? >> we will have to evaluate the individual documents and see if there is anything that would be of a confidential supervisory nature.

surely, we will be releasing some indication. >> the fdic is not the regulator of any of the services. it is not within our authority to make that decision. >> let me just say i hope you understand it is incredibly difficult to create public trust that the companies hired by the banks to perform for closure reviews and already doing business with these banks and future business -- i hope you have a little understanding of that public trust as regulators when you are assuring us the problem of the banks illegally forging documents to foreclose on homes more easily has been fixed, when news reports alleged the problem has not been fixed and is still widespread. i am going to share the

congressional research service analysis' i asked for to see if you have the wherewithal to do this. the answer is to synthesize -- that our requests -- regulators have the discretion to release the results on a bank by bank basis, if they feel it is in the public interest. they can surely come to some middle ground when the release a report with bank by bank results, while still redacting loan-level information that would be confidential to banks. rarely around here do we get 10 measures of the senate -- members of the senate to focus on a specific request for information. a dozen members or so of the house of representatives. i think we need a little transparency in this process. it is about editing. it is about taking and creating transparency, an era of transparency and openness.

i am going to be like a dog on a bone on this. i hope we get good answers because otherwise i am going to use every -- every means possible, with my colleagues, to get to the bottom of this. it is not acceptable to violate the law. it is not acceptable to do robo-signing. it is clear why the law dictates a procedure before you take over someone's cherished -- the biggest asset in their life. that is not being pursued correctly. the agencies responsible for that give us assurances it is, yet public reports constantly suggested is not. i look forward to your response. >> once again, congratulations on your 97-2 win yesterday on the va bill.

i want to focus on systemic risk, the central concept behind the legislation, because i am worried throughout much of the crisis that it was triggered by fannie mae and freddie mac because it was loaded with politically connected lawyers and lobbyists, and congress did not reform it. the institution is pretty much the same cast of rogues, still running, even though it was triggered and you guys were not allowed to touch them. i am worried that so often the government is slow, dead, and innovative, as opposed to the private sector. also, you guys are publicly controlled by us, by the white house, not allowed to look at new risks. one of the risks i am worried about is the government accounting standards board recently proposed that

government entities be required to fully disclose unfunded liabilities they face, particularly with regard to pension allocation. in 2009, the pew center published a trillion dollar gap report outlining 21 states that had pension obligations funded at less than the 80% actuarial requirement recommended. this would be totally unacceptable for the public corporations you are allowed to torture. i am wondering, because systemic risk is now out there, underdog frank in the municipal investment advisers you have, with the s.e.c. now be recommending that municipal debt issuers conform to these requirements? >> if senator, i want to make

sure i am on strong legal ground. with enforcement cases -- new jersey and illinois, you allege they were lying to their investors. >> there are a number of others that are still under investigation for failing to do adequate disclosure when they did bond issuances. we do not have the authority, although we are preparing a report for congress to discuss a number of these issues, to mandate particular disclosure requirements for municipal issuers. we have held round tables around the country to gather the thoughts of municipalities, government finance officers, investors, and others to talk about how we might strengthen the municipal disclosure system, among other things. we are actually having a hearing in birmingham, alabama next week, the home of jefferson county. we continue to work on these

issues. i think this was a very important step with respect to the disclosure of the liabilities of unfunded pension responsibilities. but as you pointed out, not everyone is required. >> i hope you would use your systemic risk authority, because i think that is to get out of jail free cards, to look at threats to the u.s. financial system. i am worried that states are so powerful and politically connected you will hold back. >> i will not hold back. >> i am worried. the other essential concept behind dodd-frank is too big to fail. yet we have seen from 2008 to 2010 is that in 20008, the banks held 11% of all domestic banking issues. in 2010, the top share had grown

to 53%. and there were fewer banks. so they are now even bigger and less capable of failing than they were before. chairman bernanke, what can we do about that? >> senator, you make an obviously important observation. some of the increase in concentration in the last few years was a byproduct of events of the crisis. several medium-sized firms disagree -- disappeared. others were acquired. it is not necessarily a trend. there are other aspects that address too big to fill. -- to fail. there is a concentration rule. we will not approve a merger, for instance. the main concern is that we have much tighter oversight in

prudential regulations. one thing we have noticed is that banks and other institutions and do not want to be -- they consider this additional burden is an oversight to constrain them. if it was truly a mark of too big to fail, they might prefer to be so designated. the other thing which i think is crucial is progress -- in order to get rid of too big to fail, we have to have it fail. we have to have a way for the biggest firms to fail. we heard discussion about fed and fdic work on orderly liquidation authority. i think it will be a sign of success when we see, for example, large firms actually getting themselves smaller to try to get out of some of the oversight. if we see the cost of funding

increasing because the backstop to the government is not there, we are not there yet, but i do note that some of the rating agencies have been talking about downgrading large banks based on the possible absence of government support in a crisis. we are not there yet. i think we absolutely must get there. there are many aspects of dodd- frank, and a lot of work remains, which will help us get rid of too big to fail. >> thank you very much, mr. chairman. i want to add my welcome to the panel of regulators for our country. mr. chairman, i would like to ask the unanimous consent that my brief opening statement be added to the record after the opening statements of the chairman and the ranking member. thank you very much.

chairman schapiro, good to see you again. dodd-frank creates the office of investor advocates. it reestablish his the investor advisory committee. i urge you to continue working to solve -- to get this committee up and running. my question to you is what will be done to ensure that the past and perhaps of the first investor advisory committee will support the work of the investor advocates and the reestablished advisory committee? >> thank you, senator. we are working now to create the new investor advisory committee, having disbanded the prior one. i expect there will be some overlap of committee members, which will give us continuity. the new committee will be fully

briefed on the activities of the park committee. the staff that supports the new committee will be largely the same as the staff support for the prior committee. i think we should not have any -- we should not miss a beat in terms of transitioning to our new advisory committee. will we will not have yet is the new investor advocate. we have sought reprogramming from our appropriators for that. we received an appropriation within the last week. we are waiting for the house to authorize it. once they have done it, we can establish it formally and appoint a person to that position. in the interim, all of the activities are being carried on by other staff. we think of ourselves all as investor advocates. that work is ongoing. >> thank you very much. one important aspect of consumer

protection that is sometimes overlooked is financial empowerment. through title 12 of the dog -- dodd-frank act, we ensure alternatives to high-cost products and services and that protections to oversight are strengthened. will you please update us on treasury initiatives to improve access to mainstream financial institutions and services? >> thank you for that question and for your leadership on this critical issues. from our perspective, the financial access provisions are critical. these are issues we are spending a lot of time working on. we are busy continuing to develop infrastructure for our efforts to support community- based efforts at financial access. we have been working hard at

putting together a program called bank usa, which allows us to work with communities to develop programs that will enable access in the communities tabled -- tailored to the particular circumstances in each of those places. our efforts on this will require some resources, which we have requested and hope we received. we think we have, on the basis of title 12 and work we have been doing in response, an awful lot of things we can be doing. i think you will see in short order from us a further public expression of how we intend to organize and structure our office of financial education and financial access, the important office within the secretary of financial institutions. it will be focused on other

efforts in the context of title 12 to continue our work on these critical issues. >> i have a related question for you. but first i would like to congratulate you on your nomination. the fdic has been a leader in working to improve financial access among un-banked anad u -- and under-banked. do you believe financial inclusion is a function of consumer protection? what more can be done by the fdic in this area? >> the issue of financial inclusion has been a significant priority for the fdic, proposed under former

chairman baird and myself. we established a number of years ago an advisory committee on financial inclusion of community leaders, financial institutions, and academics to focus on this issue. at the start, the fdic partnered with the census bureau on the first national survey ever undertaken by the census on who does not have a bank in the united states, just to get a handle on the issue. the findings of the survey were revealing. it found that about 7% of u.s. households have no relationship with an insured financial institution. nearly another 18% have an account but utilize high-cost non-bank providers of financial services, payday lenders and check catchers. the survey found that about a

quarter of u.s. households can be defined as un-banked or under-banked. it is a critical component. the consumer protection -- having an account at an insured institution is the starting point for economic citizenship, to be able to develop a credit record, bill savings, and become a -- build savings, and become a participant in the economy. it has been a priority for us. we have undertaken initiatives including organizing local partnerships around the country with financial institutions, community organizations, and local government leaders to develop strategies for expanding access to insured financial institutions. we have developed model transaction and savings accounts to encourage financial institutions to provide low-

cost services suited to the needs of those without banks. this has been a matter of ongoing attention. it is certain to be a priority going forward. >> thank you very much. >> thanks again to my colleagues and our panel for being here today. at these hearings we have called for the past two weeks, we have highlighted the need for an enhanced regulatory framework after the financial crisis. there is still work ahead of us, but we are making progress, and it is important we all get this right. the hearing record will be open for seven days for members to submit additional materials and questions for the record. this hearing is adjourned. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

>> up next, the house debates changes to the newly created consumer financial protection bureau. then today's landing of the space shuttle atlantis after its final mission. the senate banking committee holds a hearing on the dodd- frank financial regulations act. >> literacy, economics, humor. malcolm x and the obama administration. live coverage of the harlem book fair. afterwards, sally jacobs on the life and career of barack obama senior. what do you do with stalin and rocks? do not try to sell them on the internet.

but someone tried. look for the complete schedule online and sign up for weekly schedules in your in box. with titles like slander and filthy, and culture has something to say. -- ann coulter has something to say. e-mail and tweet the syndicated columnist for three hours, starting and noon eastern, live on c-span to. >> c-span radio is airing supreme court oral arguments on 14th amendment equal protection "-- equal protection cases. a case on discrimination based on gender. >> the fact that this panel ended up being all female highlights the injury to the entire community, such as males who were eliminated from the jury panel because of bias or

unwarranted stereotyping. >> listen nationwide and online. >> one year ago, president obama signed into law the dodd-frank regulations act, which created a new agency to regulate credit cards, mortgages, and other financial products. the house debated and passed a bill that would change how the agency is run. here is some of the debate on the legislation. it begins with senator baucus. this is an hour. >> what is this awful thing that republicans are bringing before the congress today? today? this monstrosity the democrats have called it is an attack on consumers.

it's a proposal first brought to us by our democratic colleagues and that was to have a bipartisan commission to protect consumers. that is what we're being attacked for today. a five-member board. now, all of us in this body are for consumer protection. our voters, our constituents, are all consumers. and we are all for protecting them. we're also for protecting our financial institutions and our economy. and we need a balance. so how do we achieve that? well, the democrats, elizabeth warren, the originator of this -- of this consumer protection commission, back in 2007,

proposed a consumer protection product safety commission. in 2008, the consumer federation of america pr posed a financial product safety commission. senator dick durbin, acting on their recommendations, introduced in 2009, a consumer protection commission. with a director and a board. then, the then-chairman of the committee, in july of that year, introduced a bill, five-member board. the energy and commerce commission followed that a few months later with, what, a five-member commission. then senator dodd issued his draft discussion. what did he propose? a five-member commission. because it needed to be bipartisan. it needed to be balanced. but what was passed out of this

body in the -- really, after three nights of amendments and sessions that went all day? well, what came about was an unaccountable czar. one person. he dodd-frank bill put a single director in charge and it gave him unmitigated discretion to issue rules. to ban fancial products. to determine what products would be offered. whether you're a borrower, whether you're a lender, whether you're a consumer of financial services, or whether you offer financial seices, he will determine or she will determine what those services will and the terms of those services. so, what is wrong with that? well, let me say this. in america do, we give one person the power to do whatever

they want to to regulate every product and service that we are offered, or that we can accept, or that we as a company can offer? that sounds to me like a government command and control economy. with the government making choices that we make. so for that reason, we've been attacked for proposing a five-member, bipartisan commission instead of an unaccountable czar. the pattern from my democratic colleagues continues to be, we're going to put one person in charge of an agency and we're going to let them make all the decisions and that -- there'll be no real review of those decisions. people can either ta it or leave it. it's up to the government.

the government controls everything. mr. speaker, i wouldn't want george washington, i wouldn't want abraham lincoln, i wouldn't want mother theresa to have that kind of power that, to me is not what a democracy is about. and if you look at the person who is he appointed by? he's appointed by the president of the united states. there's no input from congress. not only can he determine all these problems, but his funding, he doesn't have to come to the taxpayers or their representatives for funding. he doesn't have to come to the congress to get funding. he's totally unaccountable. now, mr. chairman, how in the world is proposing for the consumer financial protection bureau the exact same model that the f.d.i.c. -- f.t.i.c.

set up with, the federal deposit insurance commission, the securities and exchange commission. all of these are commissions, all of them are bipartisan. they basically ensure that no one political party, one agenda, or one person will make decisions for every american, every day. but that's whatas been created an the monster is not the bill we bring forward. the monster is the bill that you created. you took a good idea and ruined it. you took a good idea that was all about consumer protection and onverted it into a one-man show where one person could control every financeable product or every offering in america. it could ban any product. it could say to any american, you cannot enter into that financial agreement. it could say to every american,

you can't make that financial decision. and mr. chairman, that is un-american. how much time do i have remaining? the chair: the quelt from alabama has 30 seconds. mr. bachus: i reserv my time, mr. chairman. the chair: the gentleman from alabama may not reserve. the gentlewoman from west virginia controls the time. mrs. capito: i reserve the balance of myime. the chair: the gentlewoman reserves the balance of her time the gentleman from massachusetts, mr. frank, is recognized. mr. frank: i'm appalled at the gentleman saying it's un-american. and he made a misstatement when he said we took a good idea and ruined it. if it was such a good idea, why was ohe opposed to that good idea? he's making a big deal of the fact thatwe switched our view after listening to people, after having hearings, we made a change. that's why you have hearings.

e desaied after debate that the model of the control of the currency a single individual, appointed by the president, was a better model for the consumer agcy, to so does everyone else who supported it. the gentleman from alabama said, that was a good idea and you runed it. the gentleman from alabama was opposed to it when it was a good idea. he was opposed to the notion of an independence consumer agency. he makes a point of stressing that, yes, after hearing, a single individual would be bett than a consumer hearing. he made a change that dwarred the tra yectry of ours. he is now telling us retroactively that it was a good idea. even then, today on television, he said, we have concerns about an agency whose sole concern is to protect the consumer unless they wry -- worry about the banks as well.

there are three parts of the bill and he took the only part he thought he could defend. it would say that the part of the bill that would give us powers over the payday lenders and mortgage lenders, he didn't talk about that. i will admire his discrergs of -- discretion. of the three parts of the bill, he only talked about up with he didn't taubt act -- talk about putting the bank regulators back in charge, and he didn't talk about their proposal to potpone until we get a senate confirmation which the majority in the senate, not a majority but the senate minority said they won't allow to happen, they'll have filibuster, to postpone the knew power. the chair: the gentleman's time has expired. the gentleman reserves. the gentlewoman from west virginia mrs. capito: i yield two minutes to m bachus. the chair: the gentleman is

recognized. mr. bachus: i never voted for a stand-alobe consumer protection advancement -- consumer protection bill, i never voted against it, because that was never offered. what was offered was a 10,000-page extravaganza for federal employees to enforce rules that weren't enforced in the first place. i consistently said let's enforce the rules we have and not just hire more regulators and create more rules. as you know, we offered a bill which did have several positions. thank you, mr. chairman. the chair: the gentlewoman from west virginia, reserves. mr. frank: the gentleman from alabamdid in fact vote against it. it wasn't just voted on in the final. we had a markup in committee just on this bill. and the gentleman voted against a free standing consumer agency

whether it had five minutes -- members or not. he said it was a good idea which we rued but he voted against it. the republicans offered a substitute which took 14 officials, made them a council, gave them the power to have a hot line and said if anything comes over the hot line, they hand it back to the bank regulators who he says are there to serve the banks, and they'll deal with it. i recognize the gentleman from maryland for three minutes. mr. hoyer: i thank the ranking member for yielding. mr. speer, we are still feeling the effects of a crisis that largely came about because the referees who oversee the soundness of our financial system were not on the field. we took the referees off the field. as a result, millions of

americans are still out of work. but while democrats have worked to restore proper oversight to wall street, republicans want the referees off the field again. and that would put us all at risk. this legislation puts the special interests ahead of the public interests by weakening the very entity that shields responsible consumers from financial abuses. last year, congress passed an important wall street reform bill in order to prevent a job the stroying financial crisis from happening again. and one of the most crucial parts of that bill was they the creation of a new consumer financial protection bureau, a watchdog, a watchdog that would look out for the interests of ordinary americans who want to sign mortgages, apply for student loans and start businesses on honest and fair terms. the consumer financial

protection bureau is empowered to ensure that lenders provide clear, plain-language elanation of loan terms and to stop the kind of abuse and deceptive loan practices that helped drive our economy off the cliff. if such protections had been in place since the last decade, the odds of a crisis occurring would have been significantly less. i want to tell my fren from alabama, he said that there was no congressional involvement. in fact, of course, the president does appoint but it is with the advice and consent of the senate, so that the entire senate, as is normal, is involved in this appointment. but the republican legislation that we have on the floor today would make it much easier to overturn these consumer protection rules. it would make the people's watchdog far weaker at a time when they are needed more than ever this legislationis part of the republicans' stated goal

to dismantle wall street reform. protecting special interests but leaving america unprotected from another pry crisis, removing america's defenses when we have not even fully recovered from the last crisis is a new level, in my view, of irresponsibility. i urge my colleagues, think of what we have been through. think of our response to believe the make sure it doesn't happen again. think of our responsibility to make clear that the interest of your constituents come first and vote this bill down. i yield back the balance of my time. the chair: the gentleman from m.d. yields back. the gentleman from massachusetts reserves. the gentlewoman from west virginia is recognized. kop kop thank you, mr. chairman. i'm really just amazeded a the -- mrs. capito: thank you, mr. chairman. i'm just amazed at the hyperbole of the dismantling and the

weakening of the agency. the bureau will go forward with all of the consumer protections that it's empowered with in the dodd-frank bill. the original intent was a commission. we go back to a commission. let me just tell you, the president has had an entire year to nominate this very important person to lead this bureau. and it wasn't until the beginning of this week, monday, that he finally got around to it. what kind of signal what does that send? ateast to me it send as signal it really isn't all that important to have that person there, senate confirmed as the minority leader said with the oversight of the united states senate. and let's talk about the financial services oversight commission, there's 10 people on there. all right? i'm going to go through they can quickly. secretary of the treasury, he's confirmed. chairman of the federal reserve, bernanke, he's confirmed. director of the cfpb, somebody nominated four days ago, empty. chairman of the fdic, acting

director, a nomination but nobody confirmed. controller of the currency, acting director, no one confirmed. chairman of the ncua confirmed, chairman of the s.e.c. confirmed, chairman of the cfpb confirmed, director of the ffha director, no nominee. ve of the people on this 10-person commission are not even permanently -- mr. frank: will the gentlewoman yield? mrs. capito: no, i will not. i say to myself, what kind of priority is this administration putting on this markey part of the dodd-frank bill? now i'd like to yield to mr. hensarling, our vice chair. the chair: the gentleman from texas is recognized for three minut. mr. hensarling: i thank the gentlelady for yielding. i thank her for her leadership on this issue. mr. chairman, already we know that in america we are looking at 9.2% unemployment.

since the president told us if we would pass his stimulus plan, $1 trillion, unemployment would never go beyond 8% and now he is preding over the longest period of high unemployment since the great depression. we just got the statistics since they've been keeping them, it now takes almost 10 full months for somebody unemployed to find a job. one in seven on food stamps. the fewest new business starts in 17 years. this economy is not suffering so much from a lack of capital, it is a lack of confidence and a lack of confidence primarily in the policies of our president and the previous congress. part of that lack of confidence is attributable to dodd frank and this -- dodd-frank that cfpb which, yes, does have some

wonderful consumer protection powers but als has historic dracian powers to ration and ban consumer credit for families and small businesses. and yet here it is, as the gentlelady from west virginia pointed out, almost a year later, only now, only now has the president seen fit to appoint some type of director. the lack of confidence in these policies is what is keeping jobs and capital on the sideline. it is incumbent upon us to return that confidence so, yes, to my colleagues on the other side of the aisle, this is yet again another jobs bill. we need to say, you know what? small businesses of america, there's not going to be one czar, one czar who controls consumer credit, we're at least going to have a panel representing both primary parties in the united states.

and oh, by the way, at least now somebody will have to consider safety and soundness and what this bureau does, the people who are telling us don't worry about it are the same people who told us, don't worry about safety and soundness when it comes to fannie mae and freddie mac. come on, it's all about consumers, it's all about homeownership, let's ro the dice, donets worry about safety and soundness. well, mr. speaker, we have to worry about safety and soundness. american small businesses are orried about safety and soundness. it is time to bring some confidence, it is time to bring some certainty so that we can get our friends, our neighbors and our constituents back to work because they don't want welfare checks, they want pay checks and this is one small step we can take today to provide that certainty. i yield back the balance of my time. the chair: the gentleman from texas yields back hisime. the gentlewoman from west virginia reserves. the gentleman from massachusetts

is recognized. mr. frank: first i yid myself 15 seconds to say, the gentleman from texas talked about fannie mae and freddie mac. but he doesn't do anything about it. the majority has been e majority since january. the gentleman from texas filed a big tough bill about fannie mae and freddie mac a year ago. he has sat sweetly and quietly by while his majority has ignored it and taken no action on it. the republicans ways talk tough about fannie mae and freddie mac when they're in the minority and then they get in the majority and they choke. i now yield three minutes to the gentleman from massachusetts, a leader in fighting in particular against speculation and the abuse of derivatives. the chair: the gentleman from massachusetts is recognized for two minutes. >> thank you, mr. chairman. i also want to thank the gentleman for yielding, for his advocacy on behalf of the american consumer. the dodd-frank act created the consumer financial protection bureau with the sole purpose of ensuring that financial markets work for and not against american families. it established a single director empowered with a singular mandate which is simply to protecthe consumer.

this bill, h.r. 1315, seeks to weaken the cfpb on the day it opens its doors for the fir time in two important ways. firstly it would make it more difficu for the consumer protection bureau to act by replacing the director th a five-member commission. mr. lynch: as has been shown, a single director with executive authority and who is directly responsible to the american consumeer is better suited to act quily -- quickly to address problems in the consumer financial area and he will be accountable to congress for the bureau's actions. on the other hand, a five-member commission creates nor bureaucracy that would be both less effective and less accountable to consumers. as a five-member commission would also, in this case, cost taxpayers an additional $71 million. to watch that, the cost of these commissioners and their staff, we're being asked to use the money from a federal housing

administration program created to help responsible americans who have continued to make mortgage payments refinance their underwater homes. according to mark fleming, the chief economist for the property research company, underwater mortgages are a primary factor holding back the housing market and the economy as a whole. and so instead of working to solve this problem and boost our economy, our colleagues on the other side of the aisle have decided that our money is better spent unnecessary -- on not necessarily ex -- unnecessarily expanding the bureaucracy of the cfpb. h.r. 1315 would also make it easier for the same regulators who in many cases were captured by the industries that they oversee and who fell down the job and the lead up to the financial crisis to now overrule the cfpb. these regulators proved that they were not capable of ensuring the soundness of the financial system while simultaneously protecting american consumers. i urge my colleagues to oppose

this bill and i yield back. the chair: the gentleman yields back the balance of his time. the gentleman from massachusetts, mr. frank, reserves. the gentlewoman from west virginia is recognized. mrs. capito: thank you. mr. chairman, can i inquire as to how much time remains on both sides? the chair:he gentlewoman from west virginia has 15 1/2 minutes. and the gentleman from massachusetts s 19 1/4 mines. mrs. capito: i'd like to recognize mrs. biggert of illinois, a leader on our financial services committee, and chairman of the housing and insurance subcommittee for a minute and a half. the chair: the gentlewoman is recognized for a minute and a half. mrs. biggert: i thank the gentlelady for yieing and, mr. chairman, i rise in support of h.r. 1315 which would prevent the most visible legacy of the dodd-frank act from also becoming the most costlynd regrettable. today's legislation will provide the new agency with accountable leadership, proper oversight and

a much-needed chk against bad decisions. american consumers don't need more bureaucracy to stifle innovation and raise costs. we need regulators to understand that the job isn't just to layer on expensive new rules, it's about educating consumers and preserving a vibrant and competitive financial market that provides affordable and innovative options. unfortunately the current structure of the bureau is subject to virtually no oversight from congress or anyone else and unlike other agencies even the consumer product safety commission on which it is modeled, it is led by a single czar who has unprecedented power. even more dangerous, the financial stability oversight council must agree by a 2/3 majority before they can overturn a rule imposed by the cfpb. even if that rule threatens to imperil our economy or shut down a financial institution. mr. chairman, our commonsense reform adds a few more voices to

a panel that is supposed to protect all consumers, not just those favored by the political powers that be. and it creates a reasonable process to overturn bad or inconsistent decisions. mr. chairman, these reforms will help protect consumers and ensure that the government doesn't stand in their way. i yield back. the chair: the gentlewoman from illinois yields back. the gentlewoman from west virginia reserves. the gentleman from massachusetts is recognized. mr. frank: mr. chairman, i'm very pleased to be joined by so many leaders on the financial services committee and i now yield to one of them, mr. watt, the gentleman from north carolina, for three minutes. the chair: the gentleman is recognized for three minutes. mr. watt: thank you, mr. chairman. and let say at the outset that i was a strong supporter in our committee for the creation of the consumer financial protection bureau. and remained a strong supporter of the bureau and its mission. the reason i did that was because all of these regulators

had within their authority a consumer protection initiative. unfortunately that consumer protection obligation was subordinate to other obligations that each of the regulators had. and so when we started talng about this, i kept saying to them, look, we need a consumer regulator that has as much authority and as least cumbersomeness as any of the other regulators. so if you're going to create a consumer financial protection bureau, don't give the other regulators authority to reverse them unless you give the consumer financial protection bureau the authori to reverse the other regulators. now, if you think that's fair, do it both ways.

this is the only agency that ended up with the other regulators, the federal reserve, the o.c.c., the fdic, having the authority to reverse them and we were able to restrict it to things that was in their jurisdiction if it was a systemic risk that the consumer financial protection bureau was creating by promulgating a rule or regulation, then we thought it was fair to have them police what the consumer financial protection agency was doing. but i don't know of any reason that we would create a child of an agency to deal with consumer protection when we have -- we don't have a child of an agency

dealing with other aspects of the regulation in our financial sevices industry. so for me this is just about parity. give this agency equal authority and umph as the other agencies have. and we are not asking that the consumer financial protection be able to overrule the federal reserve when it makes a decision, we're not asking that the consumer financial protection agency be able to overrule the o.c.c. when it makes a determination, neith should we be allowing those other agencies, the fdic, the o.c.c., the federal reserve, to overrule the consumer financial protection bureau when they are not acting within their authority. i thank the gentleman for yielding the time and i yield

back. the chair: the gentleman's time has expired. the gentlelady from west virginia. mrs. capito: thank you, mr. chairman. i'd like to recognize the author of the bill, mr. duffy of wisconsin, for five minutes and thank him for his hard work on this issue. the chair: the gentleman is recognized for five minutes. mr. duffy: thank you, mr. chairman. and i want to take a moment and thank chairman bachus and chairwoman capito for their hard work on this legislation and for their job to make sure thathis bill came to the floor today. you know, all of us in this house agree that we want consumer protections where any one of our friends or family members, our neighbors and our constituents, when they deal with the financial institution, they're dealt with in a fair way and in a transparent way. our reform here to the cfpb does exactly that. i want to talk about a couple of components of this bill. one is, we are moving this from a director to a bipartisan commission. i think it's important to note that my friends on the other

side of the aisle, when they first crafted this bill, they included a bipartisan commission and the president when he talked about this bill, he was in favor of a bipartisan commission. and now, all of a sudden, today, as we brought this back up, they are now opposed to a bipartisan commission. i think it's important that we note that today you may have a democrat president and you might like the recommendation for the chairman of the cfpb. but i would guess that at one point in our future, there will be a republican president and you may not like his appointee. let's me together, make sure we have a bipartisan commission that's going to work on behalf of consumers because this isn't a republican or democrat issue. it's truly an american issue that should be dealt with on a commission level. one other key component of our legislation is the review standard of rules that come from the cfpb.

the way it is set up right now, the only way a rule can be overturned is if we are going to have armageddon in the financial industry. so the only e that can have a rule overturned is a big bank on wall street, one who is too big to fail. the way it is currently written, you have given a voice to those people who helped cause this financial crisis. you know what? i'm not from wall street. i'm from small-town, rura wisconsin. we don't have big wall street banks. we have small community banks and we have credit unions. the way the current bill is written, not mine, the one that's in existence today, it doesn't give a voice to the people in my community if a rule that comes down from the cfpb is going to affect them negatively. on main street, the very people who had nothing to do with the financial crisis, who hen't been given a voice, but will if

my bill passes, those are the people who deal with our small business owners. with our family members. people who are looking at expanding their business, growing their business, creating jobs in our community. they rely on community banks and credit unions for loans. and they don't have a voice. i don't understand that. and then, those same people that you look to when you want a mortgage for a home or a car loan, it's these people we look to. they haveeen left voiceless in the current law. >> will the gentleman yield? mr. duffy: i will not. my bill gives a voice to main street america. i have to say, the point, i don't think can be made clear with those who support my bill. i don't have big wall street support for my bill. but i'll tell you what support i do have. i have the community bankers of wisconsin. i have the wisconsin bankers association, i have the

independent community bankers of america, american bankers association, i have the consumer bankers association. all those who are about small community banks that deal with customers support this reform. we go a step further. we have the wisconsin credit union league. the credit union national association and the national association of credit unions. all people who didn't have any role in this financial crisis, all people in our communities whare looking out for consumers because if they on't, they dot survive in small-town america, and they all support this reform legislation. i would encourage all my colleagues to jump on board and support common sense reform that is going to strengthen consumer protection and provide great oversight for a very powerful agency and it's going to hold it accountable. with that, mr. chairman, i yield back. the chair: the gentleman yield back. the gentleman from

massachusetts. mr. frank: the gentleman made one more flat mistake when he talked about car loans. car loan rts exempted from this. this is an example of a failure to understand what we're talking about. secondly, he does have wall street support for this bill. i think he mentioned the american bankers association and the notion that the community banks aren't involved is nonsense. the community banks are favored here because the consumer bureau is given the right to examine banks of $10 million in assets or more but can't examine the credit unions and community banks. that was a recognition that -- of that. i yield two minutes to the gentleman from north carolina. the chair: the gentleman is recognized. >> the reason that they want to discuss whether it should be five members on the commission or not or one director, that's

the only thing you can debate in this bill. i also disagree with the argument that everybody wants to protect consumers. no they do not. we saw what happened in the last decade. we know who was doing it. it was the most powerful industry in america and they were making a ton of money by cleating consumers. cheating consumers on credit cards, on mortgages, cheating consumeron overdft fees and on and on. mr. miller: we've heard the same arguments about this we heard a century ago, a century ago, when theodore roosevelt pushed for pure food law the meat packers said, do you want government to take away your right to buy meat? do you want government to take away your freedoto buy beef from diseased animals or spoiled beef and the american people said, yeah, that's exactly what we want. we want to know what we're getting. and americans want to know what they're getting in financial products too. do they want to lose the freedom to get a subprime loan

when they qualified for a prime loan? yes, they do. do they want to have a credit card to note what they're getting on the credit card? yes, they do. they want to know that there's somebody with their interests at heart who is reading all that fine print that the banks -- banks' lawyers wrote to be good for the banks, profitable for the banks and let the consumer have no idea what's in that little print in the legalese. yes, they want someone, a strong agency, reading that fine print with their interest at heart in saying, no, you can't do that. you can't cheat consumers that w. that's what this agency does and the american people want it. i yield back. the chair: the gentleman yields back. the gentlelady from west virginia. mrs. capito: could the chairman tell me how much time is remaining, please? the chair: the gentleladfrom west virginia has nine and a half minutes, the gentleman has

13 and a half minutes. mrs. capito: i reserve my time. the chair: the gentleman from massachusetts. mr. frank: i am sorry the gentleman from west virginia would yield to me but there was a lot of talk about switching positions. the gentleman from west virginia vote -- the gentlelady from west virginia voted against this. now she's for it. i'm glad my republican colleagues, having opposed a consumer agency, now are all for it. now i yield two minutes to the gentleman from new jersey. the chair: the gentleman is recognized for two minutes. thank you, mr. chairman. mr. pallone: i want to thank the -- >> i want to thank the gentleman. today, my friends on the other

side, the stock market hit its highest point since 2008. isn't that wonderful? and yet we are at 9.2% unemployment. mr. pascrell: i looked at the treasuries, they're doing well. but main street isn't. that's what consumer protection is all about. main street. no question about it. we don't want to go back. we don't want to go back to 2007 and 2008. why? because thconditions that led to the mess we have now, we don't want those conditions to exist now and that's what we've been trying to correct particularly over the last two years. and here's the consensus, whether our european financial person or someone in the united states. here's the consensus.

dodd-frank puts us more on a level playing field. with regard to capital reserves, regards to too big to fail, regardless of what we're talking about, we are oceans ahead of our european partners and our allies in addressing these issues because we're addressing the causes of the financial meltdown in the united states and in foreign allies. and if it wasn't for the gentleman from massachusetts and the gentleman from connecticut at the other end of the building, we wouldn't be where we are today and we'd be saying, let's go back, we want things to be like they were in 2007, and 2008. well, tngs were not good. the chair: the gentleman is recognized for 30 seconds. mr. pascrell: in this book by james stewart, "how false

statements are undermining america," he zeros in on the madoff situation, which became a poster child, no one else has been really brought before us, no one else has suffered for the pain they provided to the middle class and to main street peoe. we don't want to go back. we want different rules and regulations do have a part in this. and the person strugging day in and day out needs our help. they don't need it. it doesn't matter who the president nominated. you'll turn it down. this is bureau you want to destroy. the chair: the gentleman's time has ex-spired. the gentlelady from inch -- as expired. the gentlelady from west virginia. mrs. capito: today is a nice day, but we have 9.2% unemployment. it's not a day i want to keep repeating with so many out of work. with that, i recognize the gentleman from west virginia, a member of the financial

services committee, mr. hurt. mr. hurt: one year ago, the president signed into law a law that has staaled job growth in virginia's fifth district and across the country. a centerpiece of the law is the formation of the consumer financial protection bureau, a massive government bureaucracy with little to no accountability. h.r. 1315 will add much-needed oversight to this far-reaching new government agency. these checks and balances will help reform cfpb to help reform small banks and credit unions like those in central and south side virginia, from unnecessary government regulations. these institutions play a critical role in providing critical capital tour businesses and families as we work to get our economy back on

track. we must restore ctainty to the marketplace, free throw the economy and crea scrobs. i urge me body to pass this bill d i thank the gentlelady. i yield back. the chair: the gentleman's time has expired. who seeks recognition. the gentleman from massachusetts. >> mr. frank: i yield to the chair, former and now ranking member, of the small business committee, here's the best protector of small business in the congress, the gentlelady from new york for two and a half minutes. the chair: the gentlelady is recognized. ms. velazquez: mr. chairman, rise in strong opposition to h.r. 1315. my first question is, do my colleagues on the other side of the aisle really have that short a memory? it was just three years ago when regulator indifference

resulted in the single largest loss of middle class prosperity in this nation's history. costing over $3 trillion in this country. in fact, we had spent the last month debating the need to raise the debt, not because of the war in iraq, not the stimulus plan, but because of the massive bailout needed as a result of regulators turning a blind eye to unfair and unsafe lending practices. you can go to any community in any part of this country and see the collateral damage resulting from wall street playing fast and loose on the disinterested watch of federal regulation. one in eight mortgages are in serious delinquency or

foreclosure. ment it was this -- it was this type of dire situation that our working families were left with that necessitate wed crte the cfpb. by consolidating all financial protection within cfpb, every american is given the peace of mind that someone is watching out for their interests, not some financial institution's bottom line. unfortunately, the legislation before us today will create completely unmanageable regulatory process, once again leaving the average american in financial limbo. . i am not willing to go back to those days and neither are the 200,000 seniors in new york city will be without protection should this legislation pass. vote no on this bill. let's not allow the very

regulator that stood by and did nothing while trillions were stolen from americans. i yield back. the chair: the gentlelady's time has expired. the gentlelady from west virginia. mrs. capito: we're not taking any powers away from the cfpb. we are not reforming any of the reach of the cfpb. but we are looking at the accountability structure of who is going to be governing the cfpb. and the gentlelady was helpful in committee when we amended the commission to have one commissioner particularly looking at specialty issues concerning veterans, elderly and children. i thank her for her input on that and i would like to recognize the gentleman from new york, a great member of our committee, grimm, for a 1 1/2

minutes. mr. grimm: i'm at a loss of words when i hear that we are weakening this and weakening that. is is simply a commonsense apoach and correcting the buyer crack -- buyer crack overreach. it replaces a single director model with a five-member bipartisan commission. that's what this bill is doing. for example, the commission will decrease uncertainty over the rules issued by the cfpb. as the bill is currently structured, they can reverse a decision of his or her predecessors. such power will do nothing but increase uncertainty in our markets and reduce credit access to businesses and consumers and that stifles job growth. today, we have unemployment at

9.2%. we must, we must stop the job-killing, economy-crushing policies that have come out of washington. i urge my colleagues to support h.r. 1315 and i yield back the chair: the gentleman yields back the balance of his time. the gentleman from massachusetts. mr. frank: i yield myself 0 seconds to say, i -- 3 seconds to say, many republicans objected, but a shorter bill -- he talks about one-third of the bill which he talks as if it is the whole bill. delays the takeover of me of the powers. when a member can't get through a four, five-page bill, i can understand why they think it's too complex. i now yield to the gentleman. >> imagine a wave of arson

attacks was burning down houses and businesses across the city. imagine that the city council responded by trying to delay and water down new laws making arson a crime, refuse to apoint a police and fire chief and gutted funding for public safety. i know that sounds far-fetched but that's what the republican majority is doing in the aftermath in the 2008 financial crisis. american consumers suffered most through job losses, foreclosures, declining home values and decimated retirement accounts. the bill was designed t address fundamental weaknesses. the centerpiece of this law is the consumer protection bureau, putting consumers first, not wall street or other special interests. the bills we are debating today are pa of a coordinad effort by the republicans to let wall

street go back to business as usual. they have been trying to delay the implementation of these new rules and gutting funding for the agencies that are supposed to be the cops on the wall street beat and refusing to allow qualified nominees to be considered for appointments. this bill is called the consumer protection act. this bill would make it easier for special interests to block or delay cfpb rules. the american people are sick and tired of gridlock, yet this bill only offers more of the same. in the exame above, the fires breaking out across town, ask yourself, mr. speaker, would you -- who would you blame after the next building burned? would it be the understaffed police who failed to catch the arsonist or the firefighters who failed to put out the fire or the responsibility lie with the politicians who failed to give them the tools that they needn order to do their jobs. i urming my colleagues to stand

with consumers and oppose this legislation. we need the law stays in effect and keep fighting. the chair: the gentleman's time has expired. the gentlelady from west virginia. mrs. capito: i would like to recognize mr. garrett, chairman of the capital markets subcommittee for two minutes. the chair: the gentleman is recognized for two minutes. mr. garrett: i congratulate the good work done b the chairman of the full committee and the chairman of the subcommittee and the gentleman from wisconsin for a common zhrep sense piece of legislation. and he said something like we didn't make this partisan, they did it. i remind the chairman that his underlying piece of legislation, the dodd-frank legislation had more democrats vote against it than it had republicans for it and he pushed through a bill in extremely partisan manner and that's why we are here today. i believe that the agency we're talking about is really a

one-stop-shop to alcate credit and give the government the power to control the economy and at the same time they are talking about consumer protection, what are they doing? they are separating safety and soundness from it. how can you have consumer protection when separating safety and sndness? i remind the ranking member who originally was the sponsor of dodd-frank bill, the bill that is going to destroy so many jobs in this country, he said he was in favorof the same type of legislation that we have before us on the floor. this is once again a case where the ranking member was in favor of it before he was against it. mr. frank: will the gentleman yield? mr. garrett: not at ts time. if the bill weakens the agency, then the bill you introduced originally would actually destroy the agency. i have heard the ranking member during his debates do what he always does when he hasn't the facts or th law on his side, h

attacks and twists other people's motives and he was in support of the elements of this bill before, but today, he comes out against it. he accuses everyone on our side of the aisle of trying to kill his legislation, but might i remind him to consider his own statements. the ranking member has claimed over the past week that the most important piece of the dodd-frank bill is the risk retention section of the legislation and then turns around and says -- mrs. capito: how much time do i have remaining? the chair: 4 1/2 minutes. mrs. capito: i yield 30 seconds. mr. garrett: he said the risk retention is most important and then says any loans with 4% downdamente should be exempt. i don't know many loans that are at that level. i find it surprising that he is attempting to exempt everyone

from the most important portion of his bill instead of trying to accuse everyone of trying to destroy jobs. i urge him to speak on this legislation. the chair: the gentleman's time has expired. mr. frank: how much time is remaining? the chair: the gentlelady from west virgin has four minutes and you have 5 3/4 minutes. mr. frank: i'm my final speaker. mrs. capito: i have no further speakers. mr. frank: i will use my time. first, the gentleman from new jersey misstates things i said. i suppose it is flattering that he hangs on my every word. i wish i he didn't hang a stew on my words. once again, listen to what they

say on the other side. this has three pieces. it has a single-member commission. more importantly, it increases the ability of the other bang bank regulators who have a terrible record of consumer protection who the chairman of the committee who says they are there to serve the banks, it would put them in a better position to cancel the work of the cfpb. i never supported anything remotely like that. i will say there is some motive. of the three parts of the bill, the only one they think won't be popular is the single chairman -- single director versus a commission. the gentleman said i misstated, that i was in favor of something last year. i was never in favor of those parts of the bill. by the way, as to the risk

retention, i did say you could get to 4% if you also had a very good debt-to-income ratio. the pattern of misstatements and it's flattering that the gentleman is so interested i what i say -- the gentleman didn't yield to me. mr. garrett: i thought you want me to answer the question. mr. frank: the gentleman is complaining i won't yield to him. typical of a certain pattern of behavior. mr. chairman, i ask for regular order. the chair: regur order. mr. frank: i didn't support putting the bank regulators pennsylvania back in charge. the gentleman from new jersey is more clear about what he really believes. again, i hope the gentlewoman from west virginia will tell us she voted against this and she says we aren't trying to undo it. the gentleman from new jersey is very clear. he doesn't really like ts and voted against it and he would

abolish the whole thi and that's what we are saying, people who voted against it and he says we made it partisan, no. when the vote came, they all voted against it because they didn't want an independent consumer agency. the chairman of the committee said it again today on television. we don't worry about the fdic or federal reserve but the agency whe sole mission is to protect the consumer without worrying the banks. and the gentleman from new jersey claiming oddly, it seemed to me, this somehow hurts the small banks versus the bigger banks. the small banks are given preference with regard to who gets examined and the ability to overturn rules -- no, and this is one of the things people may misunderstand. things that threaten the system,

they could be a pattern like subprime loans, particularly subprime loans issued by nonbanks and this bill covers, regulates for the first time those nonbanks. let's go back over this. i do want to address the single member commission. the one issue they have found, it was originally proposed by ms. warren. we had hearings. we had conversations. and every single consumer group that we dealt with, the gentleman from wisconsin mentioned his supporters, wasn't a single consumer,, the consumer federation, et cetera, they persuaded me that a single member would be better than a commission. i acknowledge we had hearings and i listened to people who were for it. here's the debate. we have everybody who was against establishinghis in the first place, who were against it in principle and believe they

should leave ito the bank regulators. we have everybody who supports the entity as an independent consumer protector, therefore a single member. yes, i was persuaded. i will acknowledge i changed my position based on the evidence. the gentleman's inaccurate suggestion was that i was for the other parts of this. no, i wasn't. putting the bank regulators doesn't work. and the republicans offered thr own version last year. the gentlewoman from from illinois, ms. biggert and created a 14-member council and they were empowered to set up a hotline. and if they got things from the hotline and the web site that were complaints about the banks, what did they do them? they september them to the financial regulators who failed to do things in the past. that's what they preferred. they opposed then and i believe

continue to oppose an independent regulator whose primary role is the consumer. as the gentleman from north carolina pointed out, they want to give the bank regulators to cancel what the consumer regulator does but it's not reciprocal. if they thin the bank regulators have been too lax, that is not reciprocal. they have never liked consumer protection. and finally, i want to say they do the banks a disservice and i stress again, the banks were not the problems here, particularly the community banks, they apparently think that a bank has to protect consumers, they will fail. the chair: the gentleman's time has expired. the gentlady from wt virginia is recognized for four minutes. mrs. capito: thank you, mr. chairman. i would like to make a few points in closing. i want everyone to understand that nothing in this package

weakens or changeshe ability of the cfpb to make rules and regulations for consumer protection. now the ranking member was criticizing me for trying to change something that i didn't support. guess what? i'm a realist. i see -- this is law. this is now a part of our government. and my chore is to try to mak it better. if ianted to get rid of it, i'd be arguing foa bill that totally dismantled the entire bureau. i'm not doing that and neither are my collgues. we accept the reality that the bureau is going to exist and we want to see it exist in the best form. that's why we make changes to it. we can argue back and forth about whether a commission or independent director is better or not. we believe a commission is better. there are others on the other side of the building who believe that to be true as well.

to mirror some of the other regulatory bodies we have in the financial arena and other arenas. i find it a little bit amusing, and the ranking member keeps saying, you're only talkin about one section. let's talk about the other section. the ability to everturn a rule promulgated by the director of the cfpb he says, wre trying to make it so that those rules can be overtned. his bill makes it -- he makes you able to overturn the rules he voted yes on that and so did everybody who voted on this bill. the concept of overturning a rule and regulation is reality. it's already in the bill. we're simply saying if you're going to have a rule that says you can overturn a rule and regulation or a law that says that, let's make it workable. their standard is e whole safety and soundness of the entire financial system. please. what rule could do that? i'sure there's one out there but i'm not sure what it is.

so we've got to get over some of the over exaggerations of what we're trying to do here today. an the last part of the bill is acally my bill. that is saying i don't think we should be turning over the reins of the cfpb to a single person, number one, i don't agree with that, but if i'm accepting reality, then let's make sure the intent of that is a senate confirmed person. i'm saying my part of the bill, i don't like the fact that we're going to throw everything into this bureau and have somebody who is not senate confirmed overlook this and then we don't have the oversight we have as members of congress. that's -- those are the three sections of this bill. but none of the provisions we're talking about destroys consumers' ability to be looked after by this bureau. none of this bill undoes any of

the bureau's ability to und -- undo deceptive and abusive practices. we think that's a laudable goal. we don't like, maybe, the way it's been constructed, but we lost that fight. the retail is the bureau is here. so let's make it better. let's make it betteror consumers. because this is who we're talking about. i've had strings of people in my district before our committee saying we can't hire people because there's too much unertainty. there's a regulatory struure here in the financial institution that we don't understand. we don't understand what it is. we don't understand what it's going to mean. it's constraining our ability to help small business owners and that's constraining our ability to grow jobs in this country system of that's ha we're talking about today. we're talking about getting back up on our feet, weeding through the bureaucracy and making sure that the financial