actions had adverse consequences. it's worth noting that other than the bureau that we're talking about here, the comptroller is probably the least accountable of our financialing regulators, at least a lot of people believe that. do you believe, sir, that the occ should be held accountable for its actions? do you? >> i believe that it should, but i think primarily by -- >> you believe it should be, as a regulator, should be held accountable for its actions, don't you? >> i think it has accountability in many respects now. >> i didn't ask you that. >> yes. >> excuse me. >> i think everyone thinks that. >> if so, would you support an effort to make them more accountable to congress? would you support an effort to make the occ and otherring regulators more accountable to congress? >> we would support an

effort to make the occ and others comparable with the cfpb because they are the two pillars of financial oversight, consumer protection and safety and soundness and we think they should be comparable because they are the two interests that need to be at the table in balance. >> but would you support, again, let me be clear. my question is this -- would you support efforts in the congress to make the occ and other financial regulateors more accountable to the congress? either yes or no? >> i do have concerns about interference there, and there were protections put in. for example -- >> so you wouldn't support it then? modifying your position? >> no. i think the specifics matter. for example, in the savings and loan crisis, we saw interceptions that prevented the regulators from stepping in and preventing greater

collapse in that industry, and so it is a difficult balancing, but there are reasons to have protections and independence with the financial regulators because those short-term interventions with the tyranny of small decisions that create huge consequences and again, i would not want, for example, the occ to be subject to inters vention every time they tried to close down a bank. >> neither would we. >> that's what happened in the past. they've got to have the ability to do their jobs if i were to do their job, but my question to you, again, would you support efforts to make them more accountable? if they failed the american people, which most people believe that the financial egging laters failed the american people, the federal reserve, the fdic, the

comptroller of the currency and so forth, i believe, from this point here on the committee, failed the american people leading up to the financial crisis. my question again, would you support efforts to make them more accountable? >> i don't think the problem is their lack of accountability. >> you don't believe that? >> no. >> have you followed the hearings on what led up to the crisis? i think you need to go back and look at them if you don't believe it is lack of accountability. everybody says just about that i know of before this committee and anywhere else that kept up with it that it is a problem of accountability. >> that's surprising me somewhat, because i have not seen the proposals regarding the structure. >> i think you're standing alone here. >> senator, i think that there is an important point that mr. calhoun is trying

to make which is that accountability is important. no one debates that. i hope everyone on this panel would agree that we should seek more accountability for federal bank regulators. the question, though, is how do we do that. >> absolutely. >> and not every form of accountability is equally effective or equally appropriate. >> that's right. but accountability is important, isn't it? >> without a doubt. >> senator, i just wanted to make two points if i may in response to your question. i thunk first of all, i mean, there is sort of a fundamental question of government here about who ultimately everybody is accountable to, which is the people. i do think accountable to elected officials, although we might not all like everything that congress and the president do every time, ultimately the people in whom the people have proposed their trust and it seems to me that's a fundamental part of our government, and therefore, when somebody says, for example, it's an interference because in an appropriations bill there is a provision that says to the

regulator you may or may not do something, that is something that both sides of congress approved and the president signed and it seems to me it may be bad but it is what the people's representatives decided. i want to make a point about the occ because i think it ties into your question which is i think several people on the panel have said we want to make the bureau's director on a par with the controller, and so i think it is very important to note that statutory language is very different. the controller statute does not have the limitation on the president's removal power that i read before that the bureau provision does, and that's the reason why, and i just want to correct professor levinson's statement, it was the office of legal counsel at the department of justice that issued that decision on behalf of the attorney general saying that the controller serves at the pleasure of the president and the reason why is because that statutory language is different. another difference in the statutory language is the

language in the controller's statute that talks about the treasury secretary's ability to exercise general direction direction over the controller, not at all present in the cfpb statute. if the goal was to put them on the same par, that hasn't been reached. >> to create a bureaucracy, a powerful bureaucracy that is not accountable to the congress for its funds or really its real oversight there, isn't that a big mistake? >> i think it is, senator. i think it really goes against shall as i said, 224 years, and also, i think it's important to go back in the face of statements that this would be a shocking thing of the bureau, this is what the president originally proposed. this is not as if -- and what the house of representatives passed, albeit in a staged process. this is not something that has been thought up by

people and has not been advocated by people who are very strong advocates of consumer protection and as you said in your opening statement, no one is asking to change the bureau's substantive powers a bit. it is just to create -- >> or its mission. >> or its mission. it is just to create the kinds of responsiveness that really the constitution mandates. >> senator, if i may, the cfpb is subject to oversight by congress. that oversight is not through the appropriations process but that is actually i think quite right. i should not be one to speak to you about how the appropriations process works but appropriations bills involve lots of horse trading and they are not policy bills. they are overall compromises and do not focus on the specific policy issues at hand. that's the kind of oversight that congress currently has now, that is if the cfpb does something congress doesn't like, congress can

abc and ask that they don't do that. that is a better form of oversight than oversight through approach pre-ations. the appropriations is meant to give oversight process. >> we all know that the pentagon, our defense is very important, the f.b.i., all of our law enforcement people, are subject to appropriations. they're subject to the oversight of the appropriation committee because they're subject to the annual appropriations. i have another question for mr. schaefer. the new bureau will have hours for right rules prohibiting products that are, quote, abusive. abusive. if the bureau deems one of your products to be abusive and you believe that the product provides value to your members what recourse do you have to -- have to have the bureau's decision reviewed or perhaps over turned? >> senator, i would hope

that there would be some kind of appeal process. we're very interested in the -- there's supposed to be an office of are regulatory burden monitoring within the cfpb. >> you're using the word hope. we all hope so, but go ahead. >> that's my understanding that there is a chance of that happening, but, you know, it would be very unlikely in a credit union environment where we would create a product that was so offensive that the cfpb wouldn't approve of it. there is also a small financial institution department, i believe that lizing beth pale runs that tabes a close look at how the are regulations impact smaller financial institutions but to address your question directly, i believe that the cfpb should have some type of appeal process whereby all financial institutions could redress concerns that they might have with their

products. >> mr. schaefer, my last question, in your testimony, you state that, and i'll quote you, are regulators should be findful of the -- mindful of the impact of mass implementation of are regulation on smaller financial institutions which we all are concerned about. you also state, that quote, larger institutions will benefit from other economies of scale on a per account cost basis, further tipping th scales towards too big to fail institutions, do you believe that the bureau is immune interest this same concern? >> have you ever thought about it? >> well, they do seem to have a predeliction towards considering the concerns of smaller institutions. actually, mr. kelly and i are on different sides we have a common interest with many of our banking friends in north carolina in ensuring that the impact of the are regulation doesn't

unduly harm small financial institutions. the cost of regulation is higher per account for us than it is for bank of america, and so we ask that they take that into account. >> are they immune for from interest? no. do we think they will reason ply take that into account, yes? we believe they have shown an interest in that. and we looked forward to you beginning this important work. the hearing record will remain open for 7 days for additional statements and questions. this hearing is adjourned.

>> bringing ugh a look at capitol hill at this hour after this morning's meeting on the debt and deficit, house speaker john boehner called a meeting of his own with nancy pelosi and members of the senate that. meet something still ongoing. here is a look at just before things got underway. can you reassure the american public that you will get a deal before the deadline? >> thank you, everyone. >> speaker boehner says he's going to get some kind of agreement together by tomorrow. he issued a statement earlier saying congress would forge a responsible path forward to a bipartisan solution on the debt and

deficit. senate majority leader harry reid also released a statement in which he reaffirmed his opposition to any kind of short-term solution. he went on to say senate democrats want an extension of the debt ceiling through at least the end of 2012. you can check out a number of the statements being issued by leader on capitol hill at c-span.org. go down to the featured link section at the lower right-hand side of the page. mr. boehner's office says there will not be any remarks after this current meeting but we will continue to bring you any updates on the negotiations on the c-span networks. on news makers, congress net kit congressman john larson, chairman of the democratic caucus, offers his perspective on the debt ceiling negotiations and what's ahead for entitlement programs and what it means for democrats and future legislative efforts. that's news makers sunday at 10:00 a.m. and 6 p.m. eastern.