of the consumer financial protection bureau. two reporters to help us with questions this morning.

>> as you know, we were not able to fulfill all the responsibilities congress had given us. i was appointed on january 4. in addition to all the things you have mentioned, we have launched our nonbank supervision program where our teams are going into these financial institutions. they are able to have all the information to assess risks,

assess compliance with the laws, to see how consumers are being treated. and our approach to that is different from the historic banking agency approach, which is looking at it from the standpoint of how it affects the institution. we're looking at the consumers' interests first. we have an active enforcement division that is looking carefully at many things. they have investigations ongoing. i'm not permitted to talk about ongoing law enforcement activity. that becomes public when it ripens. but we're active in that area as well. and we have been engaging in our rule-making processes. which, of course, are compulsory requirements for all institutions, bank and non-bank. we issued our first rule on nonremitans transfers. we have a number of rule-making areas underway. i think we're active on all fronts. it is just that we're new. we are only a few months old. so some of the things take time

to write. >> if i could just follow-up on the investigates. i know you can't say anything about ongoing investigations. can you say if those involved, the big banks, as opposed to other areas in the financial industry. as you know, the large banks and the banking industry was very opposed and remains very opposed to this agency. are you shying away from going after them? >> we're not. i actually get different signals when i talk to erika de souza -- when i talk to c.e.o.s and we talk to different clients at the larger banks. many of them recognize there seems to be a clear recognition that something is needed here. that means institutions need oversight. we have open matters we are

looking into. large banks, smaller banks, and non-banks. >> you mentioned your supervision program. you have already been looking at the records of some of the larger banks. what did you learn so far? what did you find that might be different than the other bank speculateors have been finding? have you already dispatched regulators for those firms? >> we have. we have examiners on the ground at banks and non-banks as we speak, even though our non-bank program was hampered by not having a director and therefore got underway. both are underway at this point. i think what is interesting about our role in examining and sprfering these -- supervising these different financial institutions is two things. one is that we can address both banks and non-banks. if you have markets where before only banks were perhaps covered by the principles and standards and examined to comply with

those. non-banks were in there competing in the market. they were taking market share, growing market share in the market, for example, before the financial crisis, not held to any oversight whatsoever. many bad practices originated and/or ack sell rated in that area. you can't have a market where you regulate part of it and leave part of it untouched. that can't work. it is illogical and it obviously came to grief. one of the things i would also say that is important to us, is we're looking at institutions from the standpoint of not from the impact of complying with these laws on the industry itself. not what the risk is. that's the banking industry's focus. that's what the law tells them to do. our focus is different. it is looking at the consumer. how does the practice of the banks, how they go about marketing products, how does that affect individuals, and are they being treated fairly and in accordance with the law? let me give a specific example of how this differs. when financial institutions

contracted with vendors to offer certain programs, marketing of certain types of products and the like, i think for bank examiners, there was a certain comfort level with that, in the sense that, if they contracted, they had legal remedies. if the rend convenient tore made -- if the vendor made mistakes, there was less risk because they had remedies against the entity. for us there is really no difference. a convenient dore is -- a vendor is dealing with the consumer. the consumer often dows doesn't know the difference. i think we are likely to look at vendors a little differently. they involve more direct risk to consumers. we are going to be going on site and looking at vendors. >> can we have some examples? >> can you give us some examples

of what you are talking about? >> mortgage servicing is an example. there were a lot of larger banks and also nonbanks engaged in mortgage servicing, meaning i have a mortgage, all right? i get a loan from someone. i buy that house. what happens in this marketplace, which has gotten more complicated in the last 20 years, is that the person or firm that's actually dealing with my morton an ongoing basis, taking the payments, making sure they are applied correctly, dealing with situations that may come up where i fall behind, working with me to make sure that mortgage is still working and i'm still making payments, that's the whole industry in itself now, mortgage servicing. those rights are often bought and sold in a secondary market. so i may get a loan from you. you are my original mortgage lendor. by the time i have a property down the road, three or four years down the road, the person

dealing with me might be different. when i go to deal with someone, you come back and say, sorry, i'm not dealing with you, it is these others. many were contracting with third parties. some of them did a really lousy job. it is tumetted now. everybody who looked at this has shown this. the way in which some of the vendors really performed poorly matters a lot to consumers. it also matters to institutions because many of them capitalized and think it look good on paper but it doesn't always work in practice. >> which non-bank are you looking into. >> are you looking at size? where are your examiners now? >> there are two ways in which we set up priorities in the non-bank area. the first is congress itself specified certain priorities which they wanted us to pursue first and foremost. and of course, if it is a

creature of federal law, we have to carry out that law. congress specified the mortgage market and mortgage servicing which deals with performance of the loan and pompleans of it over time. and private student lending. those are the four priority areas. then there is every other air congress said we can supervise in that area, and of course we can force the law regardless. we need to deg who are the larger participants and focus on them. as you know, we have proposed to extend our reach over debt collection and credit reporting. also two areas where people very often have no choice as to who they are dealing with. you don't typically choose your tax collector. those rights can be bought and sold and they often are. credit reporting is another area that has a tremendous impact on

people's lives. they also don't understand it is something that goes on, it is often shadowy, yet it has a tremendous impact on their ability to get loans. sometimes now to apply for jobs, that's something that may be checked by a potential ememployer, and you might be rejected on that basis. you may not realize it. these are areas that exert influence over people's lives. our prioritizing within these ranle ranges depends on consumer impact. so where we see more direct potential harm to consumers, that makes more of a priority. larger institutions more of a priority because they deal with the broader range of customers. so those are the types of things we're taking into account. >> in the larger loans, your examiners are probably there? >> we are undertaking exams with a number of lenders. we are on the ground at any given moment and vary the places we may have been in and out already. and working with them. places we're actually on the

ground. >> how would consumers benefit from the different way you your examiners are looking at vendors, say, compared to the way banking regulatory agencies have looked at them in the past. can you bring it down to the consumer level of how that might benefit them? >> sure. if an institution contracts with a vendor to sell you a product, say, a vendor may be -- this is a general zation, but they may be inclined to be more aggressive, because maybe they are paid specifically on how they do in selling that production as pow -- as opposed to a larger bank and the computation incentive may be more diffuse. there also may be fewer controls in place there. so even though the entity wants its people to comply with the

law, they don't always. when you listen to calls, things may go very differently when they are competitively trying to sell that product. we will look carefully at all aspects of this, and not be content with the notion that there i a vendor contract. whoever is dealing with them is the person that is potentially creating harm to them. >> you can look and see if those vendors are being overly aggressive or are being misleading, things that banking agencies may not have delved into because from a safety and soundness standpoint they were content with the liability issues. >> yes. >> and i think the banking industries did delve into those

issues to a certain degree, but because they had a contractual relationship, they weren't necessarily contractually reliable. the bottom line s. i think for the direct contact with the consumer, that's our focus. we will be quite aggressive about that. that's the job as we see it originally. >> have you seen evidence of companies changing because you said over and over, the kinds of things you are looking out for? have you seen companies changing for what the bureau might be doing? >> we have. that's interesting. not that anything is achieved through some compulsory process. if you can signal more clearly to the market the direction you are going, if there is a certain amount of interest anung some of the good businesses in trying to get out ahead and understand what's expected. i think the mere fact that people understand that we are

out there looking at whether consumers are being treated fairly means they are having to think more in their compliance regime about whether they are treating consumers fairly. we have seen companies bringing to us different scenarios. one is the simplicity and clarity of the agreements used. we are pushing for that in the credit card relevant many, in the mortgage relevant many. we have institutions working with us. we have others who are bringing things to us on their own. we have others bringing to us agreements much more understandable to consumers. there are also some areas where we have been interested in practices where we have had institutions come to us and talk

to us about how they are changing their practices. i think that that would not have occurred if we were not interested in this practice. >> so we are getting people's attention. and there are a lot of ways we can move forward in a somewhat cooperative way that make improvements. some may not ultimately be entirely satisfactory, but they are in the right direction. >> we have about 10 minutes left. if i can ask you to give us an example of something coming down the road that consumers out there are going to say, oh, here, is doing its work that it's doing. that makes sense. >> well, i think there's actually a number of them. but one that we've just recently finalized is transfers. there are many people in the united states that send money variety of reasons. maybe somebody is traveling or somebody is going to school overseas, whatever it may be. transacks -- transactions.

which is kind of offensive when you think about it. as i said when testifying in front of the senate banking committee, everybody in that room, when they use a credit get a mortgage or borrow money, they expect and they receive significant protection about what can or cannot be done in that transaction. but for people who very often who are trying to both take care of their needs here, and send money back to their families and take advantage of the opportunities they had here, there were no proteches, and they often didn't know when they sent mome money how much money would be received on the other end. there wasn't any ability to correct errors. there wasn't any responsibility to do that. these are things that had changed by us finalizing rule making. >> this is a small part of our population.

can you tell us something the masses will appreciate coming down the line. >> in the mortgage area, anybody who has bought a house knows when they come to the application process and then when they come to the closing, there are massive amounts of paperwork. much of it is duplicative and confusing. much of that was created by different agencies. much of that has been integrated within our agency, and we've been directed to simply identify it so people can know what choices they are making and the key terms are more salient to them. that's a project we have had and by january bell have it in and people will see that as they go to buy and sell houses. >> credit card agreement.

are being delivered by institutions. agreements there, too. and there has been a lot of people shop for credit cards frequently. they are shopped for credit cards. they get it in the mail p i do as well. whether that will be boiled down so you can understand what exactly is the interest rate going to be. what exactly are the terms? what are the payment fees? what are the late fees. you can make comparisons. it will also help if people have trouble making comparisons. i think a lot of consumers did a lot of complicated things. it will help third parties to better compare products and set out for people, kind of like consumer reports does in the automotive realm.

you can make your choices accordingly. we might be able to advise you given what your spending is, what your income is, what might be a prefer rabble product for you. if that is done in the private sector, a nonprofit sector, that makes things easier. >> you have possibly a lot of oversight over the financial industry. i want to ask you about the oversight over your agency. you know, a number of republicans in congress would like to change the oversight. you as the single director have a lot of authority, sole authority in a lot of ways. if you were not the director, if you were the chairman of a five-person commission, as republicans would like to do, how would that have impacted you so far? how would that impact the way you do your job? >> jim, it is hard to say how it impacts us. we obviously have different commissions and boards and organizations in washington that

are organized differently. some have a single head. all the cabinet agencies have for the most part a single head. some of the independent agencies have a board of three or five or seven. some of them don't. they are around a hundred years and nobody seems to be actively trying to change. >> so in each organization, i think it's pretty common that there is some group that is a group leadership. at the bureau, i'm the director, but we have an executive committee, talented people. some came from government agencies. a breadth of experience. and we run the place together where you have a board. there typically is a chair for an acting director that has to sort of run the agency. so i'm not sure there is l all that much difference among the different models. what i have said to congress when asked about this is, whatever the law is, is what we'll carry out. the other thing i've tried to do, congress has been very

interested in us. as you say, some people are friendly, some people are more resistant. they have called us up to testify many times because they want to have oversight. i think that's a good thing. i welcome every opportunity i have to testify. i will be going up there for my fourth time in three months next week. and to me, that's a good thing. ner entitled to look closely at us and for us to have the opportunity to explain what we're doing. we should be comfortable with that. so the more oversight, i think the harder it is to make the case that we're somehow insulated from oversight. it is just not true. >> this second week, this is kind of president obama's baby. there was a controversial appointment. how do you set up an independent agency in the middle of all that politics? >> i think the path to being an

independent agency is clearly marked out. there are many of them in the federal government. you have the federal trade commission. you have the securities and exchange commission. you have the cftc. you have a number of them. the fact of the matter is, we are distinct from the administration. they may be interested in a lot of the things we are doing. there may be supports for a lot of them. we're happy to work with everybody and anybody that wants to stand with us and protect consumers. and that's whether they are elected officials or a-- appointed officials. the president is an important champion to have on your side if you do. members of congress and the senate, we want them to have an understanding and appreciate what we're doing, and we'll work with members of both parties across the country. we respond to the same constituents that we hear from with the very same kinds of problems. problems of potentially losing their houses or drowning in credit card debt or dealing in student loans.

we made progress on these issues that i think is helpful in building support. we also work with officials at the state level and local level, including the cities for financial empowerment and efforts that are underway there. so wherever it is across the country. we're getting out across the country quite a bit. from alabama to texas to new york to tennessee to indiana. we have our folks go across the country all the time. our service member affairs brings back a wealth of information and insight on the problems military veterans are facing. we have skip humphrey heading our older americans. he's out now canvasing the country to understand special problems with that population. and a generation like myself that is taking care of and looking after elderly parents. so i think that as we work, we have a mission.

it is a mission set by congress. we want support and partnership with all elected and appointed officials and other agencies to do our work, and that will make us more successful. >> we have time for maybe one more question here. do you want to take it? >> just to get back to the oversight question a little bit, and the question of possible legal action, is that impeding the agency at all, the thought that the first aggressive action you take, rule making or enforcement action, is likely to end up in court, challenged, because of the recent appointment? are you prepared for that contingency? is that holding you back or keeping you from doing anything you are doing? >> it is not affecting our decision making, jim, and i don't see how it legitimately could. now that i'm appointed as the director, people may have their own questions about that. now that i'm appointed as the director, this bureau is under

obligation by law to do certain things, and they are things that not only are we required to do, but they are really important and they are going to matter to the lives of consumers. so cleaning up the mortgage market. leveling the playing field between banks and non-bank competitors. seeing that the law is enforced and people are held accountable. i took an oath when i was sworn in as the director to carry out this law. so we're going to do it. i don't think there is any real alternative for us. and i think it also dove-tails nicely with the fact that as we protect consumers, they will see the benefits of this agency and justify the work we are doing. >> one final quick question. next week, what's the topic? what do you say to congress? >> the house financial services committee is having me in to discuss our six-month report on what we've done. i have already testified on the same report in front of the senate banking economy -- committee, so this may not break a lot of new ground, but it is a

whole new set of people inquiring, so i always find that very stimulating. >> richard cordray, thank you very much for being our guest on "newsmakers." many >> thank you. >> and we're back with our two reporters. >> the industry was set up as somewhat unyufrpblt they don't get their money from congress, they get their money from the federal reserve. that is not entirely unusual. it does create questions among some in congress about how much oversight they have. he can't, for example, when he goes to the hearing this week, they can't say, if you don't do what we want, we're going to cut off your funding and we're not going to give you the funding. so there is a will the of concern, particularly among republicans, that the agency is

on its own and can do what it wants. as you heard, he's trying to stick to what the law has put forward. that's an ongoing question. that's where this legal challenge is going to come in. that's another area where congress was not able to have a say on his appointment. >> who is pushing legal challenges to this agency? >> if his appointment is not valid, there are a lot of authorities that the agency has that they only got when they were with a full-time director appointed, and therefore you could make the argument that any rule-making or enforcement action that the agency has taken under his supervision would be invalid, and that's the expectation. somebody at some point is going to file a legal challenge along those lines.

>> so what did that tell us what this agency is doing? >> i think there are concerns. of course they made it clear that they are moving ahead one of the things they are moving on is examiners for the non-bank companies. that's the only segment i know right now. i think they are still trying to that provide loans to consumers that aren't necessarily banks. it is interesting today he kind of gave a little more information about, yes, we're looking at payday lenders just like we're loobing at the banks. bankers have been willing to see to try to level the playing field. one of the key objectives was to look at all financial products, whether it is from a bank or a nonbank. whether it is student loans or credit cards or mortgages. whether he's sending examiners to some of these non-banks is pretty interesting. >> and there is a movement out

there. occupy wall street. what are you saying? he's not going to shy away because of all the political concerns and all the controversy about his appointment. they have a charge to look at all kinds of financial firms and that's what they are doing. >> how will consumers benefit from this agency? >> well, i think the overriding idea is to take these consumer protection responsibilities and restraint among a bunch of different agencies and often not the highest priority at these other agencies and put them in one place where that's the focus. as you saw, he is very focused on what the consumer experience is. so from that standpoint, from disclosures and things that the banks do that might be confusing and other financial service