we have benefited from an on with thelogue institutions we supervise as well as credit unions and community banks. also thanks to the work of the bureau's employees. dedicated public servants who are committed to promoting healthier and fairer consumer marketplace. we work to renew trust in the marketplace and in sure it is fair, transparent, and competitive. in the years to come, we look forward to continuing to fulfill congress's vision of an agency of cultivating a financial marketplace based on these principles. thank you for the opportunity to appear before you today. i look forward to listening closely and responding to your questions today. >> thank you for your testimony as we begin questions, i will ask the clerk to put five minutes on the clock.

>> director cordray, the cfpb has now been up and running for almost three years. what do you consider to be the most significant accomplishment of the bureau since 2011 and looking forward, what actions can we expect either the bureau -- out of the bureau over the next three months >> co thank you, mr. chairman. it's a broad question. first of all, the challenge of building a federal agency from scratch has been significant. we've had some growing pains and we've been working through those. but at the same time, we've gone from zero employees to now close to 1400 employees. people who are very dedicated to protecting consumers and seeing that they are treated fairly. they are doing marvelous work. the mortgage rules we put in place that congress put such a high priority on, had been very significant.

that's a single biggest consumer financial market. the enforcement activity that we've had to ensure that institutions understand that people need to be treated fairly and money will go back to people's pockets when they're treated unfairly have been important. our attempts to supervise to put in place supervision programs for nonbanks to put them on the level with the banks. we can now supervise and oversee entire markets on an even playing field, that has been significant. i think increasingly, not only our consumer response, which addresses individual complaints but also reveals the pattern of complaints, but also our efforts to provide public information that all of you can see and share. that calls attention to various practices, some of which were described in legislative proposals noted here today. they do affect the market in meaningful ways.

>> the qm rule has been in effect since january. would you discuss the rule's impact in mortgage markets and home buyers? >> the qualified mortgage rule or ability to pay rule -- alternative names. has been one of the most significant protections for the mortgage market to date. it is in important provision to recognize the need to prevent similar financial crisis from growing out of the mortgage market in the future. i think it's been widely acknowledged it will help to do so. i think efforts to put the qrm rule on a level with the qm rule acknowledge that. i think it's been a balanced rule making but it's something we're very attentive to and closely monitoring. if we see uncompensated consequences, we want to be ready to act. we've been closed to national organization of realtors and others who are bringing us regular data to let us see how this may be affecting the markets.

in the rural areas, that's an area we try to be sensitive. we had an original proposal not calibrated properly in terms of what is rural for purposes of this act. we backed that proposal off for two years while we reconsider that further. we've been receiving a lot of comments. i think we'll have a proposal that will be more satisfactory to people within that two year time frame. >> director cordray, the bureau recently proposed changes to the q.m. rule including a change to points and fees limit, to allow lenders an opportunity to cure a loan that inadvertently exceeded the limit. can you describe why the changes were necessary and whether you think any additional changes to the point and fees limit or q.m. generally will be needed?

>> the points and fees provisions stems from the dodd-frank act. we have heard from a number of lenders about it including the concern that was stated i think mortgage bankers in particular but a number of people brought it to us. although there's a point and fees cap under the rule and people should be able to go right up to the edge of that cap in making mortgages in the market. we like them and expect them to do so. there were some concern if they got close to the cap, they would have to stay away and create a gray area. because of concerns that they might get it wrong. a right to cure would be a way to ease that concern. we took that input to heart and we have proposed a provision to take account of that that we've now had comment on overwhelming supported by lenders. there are some differences about what time frame it should cover.

i think it's a reflection of our willingness to listen to lenders about what's actually happening in the markets how we can ease access to credit without lessening consumer protection. i think there may be a number of places where we have opportunities to do that. >> senator crapo? >> thank you mr. chairman and director cordray. i want to start out with regard to the big data collection issue, director cordray. there are so many questions to ask on that, i'm just going to get into this briefly. i want to remind you, we need to get further answers from the agency with regard to literally the scope of and the content of the big data project that's underway to collect credit card information. i just want to clarify one fact in these questions. that is it's my understanding that the agency's goal is to

collect the credit card transaction information on 90% of the credit card accounts in the united states. is that correct? >> i believe that's correct. although i wouldn't put it that way. we're not trying to collect information on individual credit card accounts. we're trying to collect information that will give us the pattern of credit card activity in the marketplace so that we can protect consumers against the kind of abuses that led to the card act. and have been reined in under the card act. we're also trying to collect information so that we can accomplish our task that the congress set for us, reporting to you every year and how it's affecting the marketplace. do you want us to go further and reconsider what is done? we cannot do that if we do not information?

>> i understand that but we are talking about approximately 900 million attacks. proximately 900 million accounts. you are collecting data. i understand the purpose, you stated the purpose for your collection of this data. i have concerns about the potential abuse and misuse of that data and the loss of privacy that comes from it. i want to move to the more recent development, which we learned about in april, which is that the cfpb is joining with regard -- joining with the fhfa for the national mortgage database and what we learned then, just last april, is that these 2 agencies are going to jointly work to expand the national mortgage database, and the information that came out in the federal register with regard to this proposed expansion is extremely alarming. i am reading from the federal

register right now, the new expanded system may include without limitation borrower and co-borrower information, name and address and zip code, telephone number, date of birth, race ethnicity, gender language , -- gender, language, education records, financial information and account information, including the life events of the last few years, and the list goes on and on. the question that have is, does this mean that the assurances that you have given us recently, and as we have discussed the big data projects, that you will not collect personally identifiable information on americans, is being changed? is the agency's intent changing in regards to collection of data? >> it is not. i believe what you are reading from is a particular statement done for bureaucratic reasons

under the law, for what could be conceivably the case. the national mortgage database will not include personally identifiable information such as name, address and social security number and i also want to make a point to assure you, and your colleagues because the question was raised, there are no plans and we will not be including religion in the national mortgage database. so, what i do want to say is the need for this information is acute. bernanke, chairman bernanke, when he testified here, said one problem with the crisis -- they did not know enough about the mortgage market. reiteratedllen has this sense, we have to know more about the mortgage market to prevent this economy from cratering again the same way it did before. >> this is a similar rationale

to your explanation for the need for information about credit card transactions. but again, i have a concern that the government collecting this phenomenal amount of data about private citizens could be used in an invasive way. and frankly, my time is running out, but i hope that we will have another opportunity for additional rounds. i want to get into the question about whether we can reverse engineer this information, or if abuses of the information could occur. >> i realize this operates in five minute segments and we are quite happy to have our staff continue to brief your staff. and to talk back and forth about your concerns about this. i share those concerns and the gao is having a study on the report that you asked for and it will get into all of these concerns that you had back and forth with him at considerable length. they have a very responsible but comprehensive inquiry, making

sure that things are not happening that we don't comprehend. at the same time recognize the issues of security and privacy that you are raising, i want to be sensitive to those for this agency as well. i'm happy to spend as much time as you like -- personally, myself and our staff on these issues. >> thank you. >> senator menendez? >> director, in your midyear update on student loan complaints you highlight a particularly egregious practice where lenders automatically put a loan into default if the cosigner dies or becomes disabled or declares bankruptcy, even if the borrower has never missed a payment. that practice, to me is extremely unfair to the borrowers who have been making their payments on time and are in good standing. i am in the midst of drafting legislation to fix that problem. my question is what are some steps that can be taken under existing law to protect students

from this practice, students who might otherwise be able to qualify for the existing loan on their own or under a new cosigner, and does the bureau have the authority to remedy this practice to rulemaking or do you need additional legislative authority? >> thank you for raising that issue. it was shocking to me and i want to describe this practice of people understand. there was tremendous work done by the student loan ombudsman in the cfpb, who has been an expanding advocate for students who have student loan debt across the country. the practice was that nowadays, the vast majority, 90% plus of student loans that people take out have a cosigner on them, and often a parent or maybe a grandparent. what will happen is the student then attends school for multiple years and ultimately graduates

and begins to repay student loans may well have a spotless payment history, and yet suddenly something happens to the cosigner. at this point the parent or grandparent is aging, and eventually some of them pass away. at the time where the young person is affected by the death of their parent or grandparent, we saw student loan servicers calling in the account because the cosigner is no longer available, rather than considering the situation and working with the borrower, working out a payment plan or recognizing that they made the spotless payment on time, that is the way they heaped trouble on these poor affected people, and it was not right. i think that the issuance of the report itself has sent people scuttling throughout the industry to avoid a repeat of this. we heard from one of the major servicers the other day. >> i hate to interrupt you because my time is limited. short of the report and public shame, is there any regulatory ability to do something about this or do you need additional

authority? >> i would like to have our folks talk more with your staff, about the additional authority. but i do think the shaming here is a great example. >> i am all for shaming, but i would like a guarantee. many borrowers are having difficulty releasing cosigners, optionough this was an advertised to the borrower upon signing up. what is the feasibility for an automatic cosigner releasing situation when the lender's conditions are met? >> i think this is possible but i am not clear in my mind if we need legislation on that or not. obviously when things are written in legislation they are more secure and lasting, but we would be happy to work with you on that. >> can you make that part of the agenda we will follow up on? >> sure. >> as you said, we are now at 90%. privateto have 67% of

student loans were cosigned by 2008 and then that number jumped to 90%. this whole issue of a cosigner, and a young person passing away or having a disability and then having their parents facing this debt. the whole issue of even if there is forgiveness at the end of the day, getting a big tax liability, these are issues we would like to work with you on. because i have serious concerns about where we are at on those issues. >> i strongly agree with the issues you have raised in the concern you are sharing about them. at a minimum, even if something gets worked out, after four or five or six years of hassle and frustration and struggle, this is not a good situation for people. >> you would think that death in and of itself would have some finality. >> you would think. >> one other quick question. on the prepaid cards, the last time you were here in november we discussed the upcoming rulemaking on prepaid cards,

something i have followed for some time. you can have products that are largely remaining unregulated, and consumers can fall victim to all sorts of abusive fees, being charged to customer service to check your balance, or sometimes if you want to cancel your card because the fee is too high, and fees tocharged more close the account and we have legislation dealing with that. can you give us an update on the cards's work on prepaid and your timeline for a proposed rule? havecan, you and i discussed this a fair amount. this is a market where people don't realize that they are subject to no consumer protections currently, and there are billions of dollars being loaded onto these cards. that is a growing market. we anticipated we would have a rulemaking proposal out in june, which is this month and it will be the end of the summer before that can happen.

it is a very high priority for us. it does not indicate any particular problems about the rulemaking, it is just hard to work through these issues. we are getting there and we will have something very soon. >> thank you, chairman. >> mr. director, as you know i am one of those senators who has taken the position and argued for some time, that there should be greater oversight over your budget process. in fact, there is not much limitation under the law and you can request up to 12% of the federal reserve's operating budget. and the expenses must be reasonably necessary to carry out your functions. so we don't get a lot of oversight here, as you know. and i think that is very problematic. i want to focus on just a small piece of what you have been doing with your spending.

this relates to the building that you are in. a leased building, it is a building that is not even owned by your agency. renovation costs started at 55, the washington examiner thinks this is up to 95 now. now your own i think your own , acknowledgment is that this is probably $145 million. there are some documents, from skidmore, owens and merrill, they are the architects of this building and here are some of the things you are spending money on. i am quoting from the document. at the western terminus of the skim fountain, a raised water table spills over and down into a sunken garden below. the water cascade creates an atmosphere of white noise as the visitors peer over the glass

railing into the sunken garden pool, and the plantings below. at the western side of the plaza calmer,m her -- is a informal seating area under shady trees and the soft contrast of the stone floor further implies a removed space of rest and contemplation. additional seating is provided along the building edge at a slightly elevated, timber paived porch, covered by dark bronze colored trellis, with a light bronze color adorned with fines. the southern side of the raise water table over a water wall of naturally split granite. at this southern edge, a new water source creates a cascade of water that flows down into the sunken garden.

terminating in a raised pool, more slabs of granite rest in the bottom of the pool. and then it talks about a four-story interior glass staircase. an all glass and stainless staircase placed in the vertical light wells, connecting level 2 through 6 to allow increased circulation while allowing daylight into the interior. it is nearly embarrassing, as i read through this stuff, and that is about the oversight that we have with you. is to just raise these issues, do you think that kind of spending is really reasonably necessary to carry out your functions on a building that is a leased building? would you make the case to us

today that this is reasonably necessary? >> if i may, several things in your discussion i would like to address. first of all, this has been out there on the public record for some time, this is a fiction of the washington examiner, that this project started out at 55 million dollars and has ballooned to higher proportions. there was never any expectation that this could be completed for $55 million. >> how much? >> what happened was in the first budget that we put anything in as a partial payment on the ultimate project, 55 million dollars was listed in that year's budget but was never considered to be -- the notion this has tripled in cost is a fiction by the washington examiner. that is all that this is. in fact, there was a review for building prior to the cfpb being created, when it was the ots building.

in which they anticipated that even at that point in time, the baseline needs of the building, such as the hvac system and electrical problems would require at least triple figures worth of construction work, and that didn't include a lot of the contingencies that go along with a project like this. as to what you described, i find this embarrassing, this is the kind of flowery statement that someone will make when they are trolling for a bid, trying to get the business and trying to make it sound is wonderful as they can. much of the flowery words do not reflect any particular cost. and you can say this about many of the staircases and outer areas around the capital here, there is nothing special about this with respect to other government buildings and this is not a very special government building, this is a building that needs a great deal of work. i wish that it did not. i would rather not spend a single penny on that. we don't own the building so the notion that we are trying to create some palace that we do

not own does not make any sense to me. >> i don't want to impose upon ce here.rman's patient would you be willing to give us a thorough accounting of what is being spent and on what, on this building? >> absolutely. >> senator? >> welcome back, director. i am always amused, amused is not the right word but when i hear a number of colleagues, especially in the house, question the accountability of your work, i know that you have appeared in front of the house and the senate close to 50 times now, and thank you for being as accountable as you have. the semi annual report states that the cfpb will soon take steps towards providing new protections for consumers in the small dollar credit markets. i appreciate the bureau's

continued interest in providing oversight for this high-cost market, but i am concerned that tailoring regulations of traditional payday loan market may leave some consumers product's.to harmful as we both saw with ohio's experience attempting the legislature to prohibit high-cost and small dollar loans, targeting traditional payday loans, allows lenders to move into other products to attract consumers to the debt -- as we have seen in ohio. lenders organized under the thrift lending law moved into this as you know. has the bureau considered new oversight for the high-cost loan market, how do you think new rules will protect the consumers through a wide range of products, including traditional payday loans but also one line payday loans and auto loans and other payment loans? >> the issue is extremely

important to the bureau in addressing this market because as you say, i have seen the experience in ohio where rules that were meant to address concerns about debt traps and payday lending were circumvented, through migrations in the market. and this is happening across the country in a number of states. we have also seen this because the military lending act gave rise to similar problems. the first set of rules that was adopted in the military lending act about seven or eight years ago was narrow, and allowed those rules to be circumvented, by high-cost lenders who continue to operate right outside of military bases or online with lots of patriotic-looking flags and they are peddling terrible products to our servicemembers. we have been working with the department of defense for the past year to revise those rules, congress reopened that. it is exactly the same type of

problem we will be dealing with in the small lending market. this has taken a somewhat longer to address this but i think it is well worth the additional time in order to make sure that what we do will not be made a mockery of by people circumventing this through transforming their products slightly. >> thank you. i want to expand a little bit on senator menendez's questions about student loan servicing. i chaired a subcommittee hearing a week or so ago about this issue and i'm concerned that the problems we saw in mortgage servicing are being repeated in student loan servicing. including flawed incentives, confusing loan transfers, the nondisclosure of those violations of service members inadequate and inconsistent modifications and refinancing options, three or four witnesses agreed that we need comprehensive and consistent standards for servicers of federal and private student loans.

will you move forward with comprehensive student loan servicer standards and how can we better align service incentives with borrowers needs as we move forward on this? >> i would agree that we see a lot of the same problems that absolutely bedeviled mortgage servicing and continue to do so, frankly, arising with student loan servicing as well. there are some different markets and different characteristics of the product but poor customer service problems and problems with transfers, lack of information and harm to consumers because there is an eerie consistency there. what we have done in this past period, we finalized the rule that was necessary for us to begin supervising student loan services, non-paying student loan servicers on the spot and going out to see what they're are doing to comply with the law. that insight is helping us

identify things like the auto default problem that was not well known before we called attention to it. whether this will lead to specific standards, we do a lot of work with the department of education on these issues, i do not know yet. but we now have the ability to go in and actually correct problems on the spot, which we did not have before and it is going to make a significant difference in this market thomas t i believe, and where we will all lead -- we will keep you posted as we go. >> senator coburn? >> welcome. i have been watching on television and i wanted to follow-up a little bit with the line of questioning that senator johanns had. when you were here last time i asked you about the building and i believe that the quote was that the estimated cost to renovate was 95 million dollars at that time, that is your

testimony back then. and now, the estimated total cost for the cfpb headquarters renovation is 180 $5 million. the first thing -- how many square feet? >> i can't give you an exact number for the square footage but i know that the building is problematic. we are having to move out of it. so it can be renovated. >> i understand that, but you don't know how many square feet? you don't know whether what hundred $85 million is a good number for the american taxpayer. based on a per square foot calculation of the renovation costs? >> i know that we have been through these numbers and it is i believe an appropriate value, this is taken into account in the lease that we negotiated so that our lease payments were less over 30 years to take effect and we, not the landlord would be making improvements on the building. this is a building that would be a white elephant if this work is not done. it is a government asset owned by the treasury and the occ.

it is also a building that will be populated more densely than before. >> that is a great sell job, administrator, but the point is that we are $17 trillion in debt and when you hear, regardless of what the flowery nature is that he has read to you, this will be opulent. >> it will not be opulent. >> if you have any of those waterfalls, that is what we can't afford right now in this country. we are running a 600 billion dollar a year deficit, the very thing you are trying to help people with in terms of the consumer being treated fairly, we will take back from them in terms of excess costs because we don't run things on a tight ship. my point being to you, the structural renovation is 139 million, the temporary lease is $22 million, securities and

utilities and other expenses are $13.6 million, the cost of architectural and engineering and design contracts was $9.2 million, and this does not include the shuttle service that will run back and forth. there is a lot of cost into this and i'm not saying that what you did was wrong, i am saying that we are buying top dollar design and construction, at a time when we don't have the money to pay for it. you have an unlimited budget, and as senator johanns made the point, we don't get any oversight. the fact is, who with you has the experience outside of washington of doing a rehab on a building? who has private world experience in rehabbing buildings? >> first of all, i would like to invite you and your staff to come take a tour of the building. >> i am not saying -- >> it is not opulent and will not be opulent when it is finished.

>> i don't say that this does not need to be done. it probably does need to be done. the question is can this be done for less and under the realization that this country is in trouble, financially. are we spending money we have to spend or could we spend less money? >> that is fair enough. this is meaningful oversight that you have with me and we have the appropriations subcommittee on these types of issues both in the house and senate and this is something that i agreed to when i was confirmed by the senate. we also do not have an unlimited budget. we have a budget cap each year. our spending has to come out of that. we have no capital budget. every dollar we spend on something like this is taken from other work that we are doing, i am feeling that and i want to spend as little as possible. i will be happy to continue to keep you and your staff closely apprised. i know you care about these issues. >> i have a few seconds left.

who is the expert on your side and on your staff that has the knowledge to make the decisions about a construction project like this, what is their experience outside of doing this for the government? >> we have people in the agency working on this in charge of the facilities, we also brought in gsa. they are the expert in the federal government on these projects. >> but you don't have anyone on staff with outside knowledge or outside experience to raise a $180 million construction project. >> i don't know if i would agree with that but that is part of the reason we brought them in. >> can you answer for the record who on your staff and what the experience is about this project? >> i will be happy to have you or your staff meet with our facilities groups, and also the folks from gsa who are working with us about this. we brought them and specifically because i share your concerns about this and every dollar spent on this is a dollar -- >> i am not satisfied with the

work that gsa does on this. we're getting ready to build a 190,000 square-foot v.a. facility in muskogee that we could own. the gsa is negotiating a four percent rider on the lease, plus an $8 million construction budget for a facility that will be three times the size of this -- with a five percent increase in veterans over the next 20 years in tulsa. the point is, gsa is not really great at this either. >> i don't really know about that. >> but you are relying on the expert. >> if you have other suggestions for us i am all ears. , >> the deal is done, isn't it? >> if you have further suggestions -- >> my suggestion is go to the outside of washington, in the middle of the country, and find

people like manhattan construction that knows how to do this for less money, that will design and build this in an office that is adequate and build well, and do this in a way that says that we don't have a next or penny to spend, so how can we get what we need for the least amount of money. that does not happen at the gsa, that does not happen in most government agencies. you ought to set the example given the position that you are in. >> i am happy to talk with you further about that and i know that this is a concern for you. we have talked about it before. >> senator? >> thank you very much, mr. chair, and thank you for your testimony. i will start and ask you to say little bit more about the

casl issues. i believe that this is where steering payments occurred, to employees who were steering customers into high interest loans, and then getting bonuses for it. these payments were banned under dodd frank and now under your supervision you have taken action against their appearance. can you summarize where this action ended up? >> sure, and it is quite frankly the same as you described it. you have steering that was going on that we believe is in violation of the law and we were surprised the company did not recognize what they were doing was in violation of the law. we thought it was -- there are many areas were you say that this is debatable, but this was absolutely clear-cut. it took a while for that to sink in. ultimately, the matter was resolved with significant payment and penalty and it is indicative of the need to oversee the actual enforcement of the rules and laws, and not just to assume that when they are on the books, everyone understands them, and abides by them, particularly if there are

financial incentives not to do so. it is a great example of why you bulldog lawsy to and rules, and make sure that they are happening in the marketplace is that they should. >> $9 million on a return of 9000 to mortgage holders, do they also get a permanent discount on their interest rates since they have been steered into higher interest loans? >> i don't recall. i would be happy to fill you in on that. i know there was injunctive relief: forward to make sure this would not happen again. i think this signals the market as a public enforcement action does, that if either people are engaging in this and somehow thinking this is appropriate or that people won't pay attention, we will. i think it is quite important. >> you anticipated my next

question. the deterrence effect. this kind of steering in which the mortgage originator poses as a financial counselor and steers people into high interest loans when they qualify for low interest loans is just a huge predatory practice. i am delighted that you are patrolling against this predatory practice and i hope and anticipate that there is a substantial deterrent effect for what you have done. >> what is surprising to me is there is so much visibility on this issue, and it was so remarked upon, and explicitly dealt with by the congress, and by us, in the wake of the mortgage market meltdown, that i was just surprised to see a company engaged in these practices and even upon engaging with them, did not seem to be aware that these practices were legal. eventually this got through. >> millions of american homeowners and mortgage holders will benefit from that action. so thank you. i want to turn to the issue of medical debt.

thank you for this report that you have put out, medical debt and credit scores. this is something i have been very concerned about, because essentially, when you get a bill on health care activity, you get these papers that say that this is not a bill, and then you get something from the laboratory and the x-ray technician and meanwhile your insurance sends you something, this is what we think that you will pay that we are not sure. and it creates this whole confusing matrix that often takes quite a while to sort out, whether the payments have been made by the insurance company. in the course of that, medical debt is reported to a credit agency, putting a permanent scar on your credit record that has nothing to do with this. it is just the fact that this kind of debt takes a while to figure out. i felt when those medical debts are paid off, they should be

cleared from the credit record because of the logic behind the fact that they probably bear little resemblance to the role of other debts in anticipating whether or not you will make payments. about a 20 indicates point margin, and this is the first solid evidence i have seen that this is a miscalculation of the ability to pay. do you want to comment on this at all? >> i would like to reinforce what you said. medical debt is something that we can all appreciate. we have all been to the doctor's office. and then either not been billed or later we are billed and we are not sure if the insurance company is paying for. it is very confusing for people and is often small amounts but this is often reported on people's credit reports, and it affects their credit and may keep them from getting a mortgage or a car loan, something significant. this was $20 or $50 and they honestly thought it was paid by the insurance company. this is a great example, the first time we have had enough data and information to really

dig into this and point out to the credit reporting companies that they are not scoring medical debt in the credit scoring companies appropriately compared to other debt. if we did not have that information we could not do that analysis, we could not show that . and i think we are beginning to see the credit score companies are responding to this and understanding that they have to up their game and think differently about medical debt from the rest of debt for all the reasons i think you laid out so well. >> my time is running out. so i will say i appreciate the letter that i have received in regard to payday loan practices and the statement that if they engage in abusive acts they will hold these institutions accountable, no matter how their products are structured. this is certainly a big concern to states like oregon that have tried to comprehensively protect against predatory triple digit 500% interest in payday loans,

and lenders using online practices, and remotely generated checks. violating theally law in a straightforward way but able to get away with that because of the distance and they are able to pull money out of checking accounts. a lot has to be done on this and thank you for taking a look at this and we will continue to work with you on this. eitkamp?or high ca >> you and i share common experience, and that is running our own local consumer protection bureau, when we were both attorneys general. and when i look at this, i kind of look at the broad scope of possibilities for protection of consumers, not just laying it at your shoulders. one concern i have is the need to do coordination with what is happening on the state level, understand what is happening on a state level or a local level,

and then probably understanding -- and broadly understanding what is happening with all of your sister or brother agencies that also have overlapping jurisdiction. one of the frustrations i hear is here it comes again. another agency to be talking to without any coordination. i would just ask that as you look at each one of these issues, that you look at coordinating with the state and understanding better what state agencies are doing, a good example was already today, with prepaid cards you said there is no regulation. there is in the state of north dakota. i made sure that there was regulation. you can say with certainty that there is none when i know that there is a number of activities going on in states and it is important for us to understand those. i would also say that we have

referred north dakota to your consumer complaint website, and have gotten really very favorable reviews back. it is yet another avenue for people to raise concerns. with that said i would also say that one issue i worked on when i was attorney general, was the issue of bank privacy. i share senator crapo's concern about the amount of data being collected. i understand the need to have enough to do the analysis, but we need to be very mindful, of the sensitivity of consumers today about their information. i think there is a growing insecurity. and if they look at federal government -- we had not exactly given them reason to believe that we will be confidential with it, or that we will be straightforward. i look forward to the gao report, i look forward to other enhanced discussions and i want to mention something on payday lending.

i was probably one of the first full of people to -- i was one of the first foolish people to weigh in to that area back in the day. i will tell you a quick little story. the payday lending that was going on was just as egregious as it is today, it has just taken different forms. but why i was unsuccessful in getting appropriate regulations is that 900 consumers signed a petition telling me to mind my own business. and so we need to be aware that in that lane, there is a desperate need, that is not being fulfilled for short-term credit. whether this is to buy cars or diapers or whatever that this is. we need to be mindful of that as we look at this that we don't close off the avenue for that kind of credit. i listened to those 900 consumers. where i think that this was done incorrectly and i have a lot of concern about what is happening with payday lending, until we have a country that has maybe

more economic justice, we are going to need to give people access to that kind of credit. i just wanted to talk a little bit about student loans, and ask you your opinion. the administration says that they will be cap repayment at 10%. all that this is going to do for a lot of consumers in my state, a lot of student borrowers in my state is expand the time. , that they are going to have. so they will never be out of consumer debt. senator warren and i have a bill to restructure consumer debt. how do you see the restructuring of consumer debt benefiting long-term the credit worthiness of americans who currently have that level of debt? >> this is obviously a complicated subject that depends on individual circumstances and the individual borrower. but it is certainly the case

that what upsets someone's credit most of all is ending up in default. and if the payment levels are unrealistic, particularly a lot of young people coming out of school today are not finding the jobs that they hoped to find particularly in the wake of this financial crisis. and so the income-based repayment was an attempt to maintain some sort of balance, whether this is the exact right balance of what it should be, is hard to say and i am not an expert on it. >> if we did an analysis of student debt, and we started restructuring at the way that we set up the ability to restructure this, how -- could we be at the 10% and shorten the time period of repayment? >> maybe, it depends on the level of rates. and i know that this is something your authority is trying to address. if we look at a mortgage, it is not the same but there are a lot

of parallels. this is sensible loan restructuring, sometimes you have loan modifications that end up with higher payments, this is not a formula for success but this has been the winning and the most optimal way of addressing some of the mortgage problems that people are still digging out from. and it could be that in student loans the same type of approach that could be beneficial to people. >> one quick comment, we have a state owned bank in north dakota. >> you are the only one. >> we have recently announced a program at the bank for restructuring student debt. in one month there have been over 1000 applications. it tells you the absolute essential need for assisting people in restructuring this. thank you. >> senator warren? >> thank you, and thank you tickets are -- thank you. and thank you director cordray for being with us again.

iat i taught contract law, covered arbitration clauses near the end of the term and students came in thinking arbitration sounded so friendly and inexpensive. but after studying the law they discovered that arbitration stacks the deck against customers in favor of large corporations. arbitrators often have a financial interest in remaining in the good graces of the corporation that places lots of business with them, corporations usually hold all of the key evidence in the dispute, but are under no obligation to turn it over, and the arbitrator's ruling cannot be overturned even if it contains clear legal mistakes or factual errors. the bottom line is that when a customer thinks he has been cheated or that bill is wrong or , an arbitration clause in his contract makes it impossible for him to get any real help, it is no surprise that many big banks and other big corporations help

-- force customers to agree to arbitration clauses knowing that this means the customer is going to have no real remedy if things go wrong. so, director cordray, as you know, dodd frank requires the bureau to conduct a study on these clauses and authorizes the bureau to prohibit or limit the use of such clauses based on this study. the bureau released a preliminary report last december, and they were damning. forced arbitration clauses are everywhere, particularly with the largest banks and they dramatically restrict the legal options available to consumers. i know that there are additional issues the bureau wants to examine in the final study. when do you think the bureau will have that study? >> i would say a number of things. this is an interesting area, where, if you look at what the industry says, and then you look at what consumer groups say, sometimes there is some relation

between the two, but here there is almost none. as i understand, congress waded dodd frankarea in in a way that is more interventionist than congress has been in other areas, where the arbitration act has been viewed by the courts as being a favorable policy in view of arbitration. here, under dodd frank this has been barred by mortgage contracts by the congress and in terms of other consumer finance contract's, what congress has said very specifically and carefully to us, is that there seemed to be very different views of this. we are going to direct you, not suggest but mandate, that you , perform an appropriate study, a comprehensive study, and make your best judgments about pros

and cons of arbitration clauses, and based on the results of that study consider what policy interventions may be appropriate. the bureau has been trying to carefully adhere to that. and quite frankly we have erred on the side of this process but ultimately i think this is the right thing to do here. as you noted, we put out essentially an interim progress report where we covered certain subjects, and we have more to come. i believe we have indicated that the -- that further work on that is ongoing, this is very active and i think it will be completed this year. and then we will be in position to make policy judgments based on that. i understand that some people think that we should take forever on that, other people think we should have finished it yesterday. i have my own views but we are pushing along and trying to the work that congress set out, in that framework with 2 steps. >> but you do anticipate it will be this year?

>> i do. >> good i am very glad to hear , that. i have a second question. i am sure that you will tell me that you need to see the final study before deciding whether to issue rules restricting or prohibit forced arbitration clauses. so let me ask the question this way. what kind of evidence would lead you to believe that the bureau should issue rules on forced arbitration? >> it feels very much to me like a case under advisement in a court. clearly i should clearly not prejudge the issue of policy intervention before we finish the study. we are well along but not yet complete. certainly, in the end it is going to depend in part on things like, how does arbitration work? does it provide a meaningful avenue for resolution for

consumers? does it not? why does it? why doesn't it? does it matter how the arbitration proceeding is procedurally set up, there are a variety of things that we are considering. the other is how it compares to alternatives in court. i think that we can all look at that and come to the same conclusion about what kind of evidence that we think matters, but i would really like to today, here if i can, stay away from trying to prejudge that. >> i want to be clear that if the evidence supports that, the bureau is willing to review rules on forced arbitration? >> congress gave us a clear task, look at this closely and study this, give us your results and based on those results you have an obligation to engage in policymaking that reflects the conclusions that you have reached. >> excellent. i realize arbitration can play a

very important role it can play -- i realize arbitration can play a very important role in our legal system as long as parties choose arbitration freely after the dispute by . but if banks force consumers, this is just another way to tilt the playing field against consumers. the cfpb can limit this and i look forward to the final report. >> senator crapo? >> before i go back to data issues i had one more question about operation chokepoint. news reports tell us that the department of justice and several federal banking regulators are pressuring banks to end relationships with legally operating payday lenders gun retailers. this is known as operation chokepoint. are you familiar with this? >> i have certainly read

numerous press accounts of this. and therefore i would say i am familiar with this. inis the cfpb participating operation chokepoint? >> i think the cfpb has a job to do as a law enforcement agency, to police illegal lending, whether this is online or in person. much of what we are talking about here is online. there is the further issue that has been raised, what about the illegal lending that operates by piggybacking on the existing banking payment system? this is not something that the banks like or risk they want to be exposed to. some of this gets into areas of prudential regulation, safety and soundness, operational risk that i am not an expert on. >> does this mean you are participating with operation chokepoint? >> i am not sure what you mean by by participating.

i think that the agencies involved are trying to discuss the appropriate approach to knowing your customer. this is more about the prudential regulator term, at our concern at the consumer bureau is that we are supposed to be policing the non-bank lenders as well as the banks and many of the non-bank lenders on the payment system if they are operating illegally. this is one of the enforcement actions i talked about in my opening remarks that needs to be addressed. what i would say is, it is about whether the activity is legal or illegal to me. it should not be about whether it is disfavored or favored. >> what i understand again, we just got this in the news reports but what i understand is there is a conscious effort to force legally operating payday lenders and gun store retailers to stop their business. >> i do not know -- that is in the report and i don't know if that is accurate or not. i don't know if that is what people intend or if that is what is happening. >> the focus of the bureau is on

clearing out illegal activity and it is hard enough to do. >> what advice have you given, if any, to the department of justice? >> i have not given advice to the department of justice. >> because of time, let me switch back to the data issues, and mr. chairman, i have a lot of questions on this and others that i'm just going to have to submit for the record. i hope that we can do that. i want to talk quickly about this new project on the national mortgage database you are engaged with. with the fhfa. when i lead to you that long list of personal identifiers that the federal record said would be collected. you indicated that that was just a list -- what you call -- >> this is a term of art that only bureaucrats can love. s-o-r-n.lled a sorn,

i don't even know what acronym is but it is sort of a statement of operational risk, something like that. >> this is also a statement in the federal record or register, that says that this data will be collected. >> but here is the difference. i believe that in order to access data, we have to secure this from somewhere, procure it, whatever. for us in order to create the database that i have pledged to you, will meet the kind of criteria i have laid out, identifying personal information. if it comes to somebody in a different form, it needs to be de-identified before becomes part of the database. >> you are actually collecting all of this information? >> i do not want to jump to that conclusion. they are collecting information

and identifying what may be, depending on what the original data set is, which is out there in the marketplace, eing freely passed around. if it contains information, then that would be deidentified before it becomes part of the database. >> what the fhaa notice says as it will include that information, and also in this notice, says they're going to de-identify it for some purposes. the question then comes back to, is this an unnecessary invasion of the privacy of the citizens? when you lock at the list, it's scary. but here's the question. but at a 2013 urban institute conference, prior to the issuance of this notice in the federal registry, the fhfa said that the information in this

would be easy to reverse engineer. and i have been told that by many other experts who we have talked to. is this not correct? >> i would like to address that. my understanding is that quote that's being quoted is a turn quited quote, a cut-off quote. there's more to the quote. i believe that the individual went on to say that's the risk, it's very important that we handle this properly, that we de-identify information, etc. this quote was part of a longer passage and the full passage needs to be quoted in order to put that in context. taken out of context it sounds worse. >> i actually watched that on youtube -- they can do that if they want to. isn't it possible to reverse engineer? every expert i have talked to about this says that you can reverse engineer. every engineer has said yes, you can reverse engineer and obtain the de-identified data. are you telling me that's not possible?

>> this is a fair question, and particularly in the real estate market with the data that has been on the books for, you know, decades, there's a lot of information available in the real estate market and the mortgage market. i recall that when i taught at law school back in the 1990's, my students coming to me and saying, this is the kind of information that was out there, i was kind of pooh poohing this at the time. they had my mortgage, my purchase price, all kinds of things about me. that's out there. that has nothing to do with whether this exists or doesn't exist. this is a robust market. >> my time is up and let me say i understand this. it is concerning to me that this information is still available in the public and private sector. i do have concerns about that but the concern i express today is concerned that the government is collecting this. i think that the rationale for the government to collect this information does not

necessarily justify the level of potential invasion of privacy that is involved ere. this is a much longer discussion. >> let me again state my attitude towards this. i think it's important. i know you said it, but i'll say it again. this is an area that is a classic area, where congressional oversight is very important. you are very concerned about this and the public should be concerned about this and your work is making us be on our toes to make sure that we are doing things as right as we can. the gao inquiry has been insignificant and exhaustive and it will result in a report. we are working with them and whatever concerns that they raise we will take to heart. i am happy to have our staff spend as much time with you and your staff as you would like on this because it is not just something you're interested in. i am interested in this, too. it is important for the agency to get this right if we can.

but we have to have information to do our work, rather than just throwing darts against a wall. which is not something you or anyone else would like. the enrichment of the credit card market or the mortgage market, it is critical for you to engage in the policymaking and for us to engage in good policymaking. you can't even criticize this very well unless you have information into whether or not what we have done is good or bad. >> i am sure there will be much more discussions about this as we look forward to the gao report and we will continue to engage on this until we get it right. > thank you. >> director, i thank you for your testimony today, and your leadership at this important agency. this hearing is adjourned. [captioning performed by national captioning institute] [captions copyright national

cable satellite corp. 2014] >> friday, hillary clinton recounts her tenure as secretary of state from a recently published memoir, "hard choices." the former first lady and new york new york senator will be interviewed at george washington university in washington, d.c. you can see it live starting at :00 p.m. eastern on c-span2. this saturday, live coverage from the iowa state republican party convention happening in des moines. speakers include louisiana governor bobby jindal, kentucky

senator rand paul, and 2012 presidential candidate rick santorum. that's live at 11:00 a.m. eastern on c-span. >> c-span's new book "sundays at eak" includes kenneth feinberg, who oversought 9/11 victim compensation fund. >> from the perspective of the victims, i don't see any distinction. if you try and justify my program on the basis of the victims' loss, i can't nvincingly explain why 9/11, yes, 1993 world trade center no. i think the only way you justify this program as a special carve out is from the perspective of the nation, a recognition that 9/11 was, along with the american civil r, pearl harbor, maybe the

assassination of president on edy and 9/11, its impact the american people was such that this was really a response from america to demonstrate the solidarity and cohesiveness of the american people towards these victims. >> read more of our conversation with kenneth f.b.i.berg and other featured interviews from our book notes c-span's grams in "sundays at eight," now available for a father's day gift at your favorite book seller. >> now a federal land policy in the west. this is part of a heritage foundation discussion is about 45 minutes. >> good morning and welcome to

the heritage foundation. we, of course, welcome those who join us on our heritage.org website on all of these occasions. i would ask everyone in house if you would double check that cell phones have been turned off, especially with the rain in the area and all of the magical warnings about flash foods going off, it might be a little more distracting than usual. we will, of course, post this program on the heritage home page following the presentation for everyone's future reference and our internet viewers are always welcome to send comments or questions. simply emailing speaker @heritage.org. hosting our program today is rob gordon, who serves as senior advisor for strategic outreach in our external relations department. he establishes and builds working relationships with new audiences and potential allies, championing ideas and policy solutions. before joining us here in 2008, he directed several conservation organizations from 2003 to 2006.

he served on committee staff for the house committee on resources. in 1989, he founded the national wilderness institute, a nonprofit conservation organization. and from 1997 to 2002, he served two terms as a member of the commonwealth of virginia's board of conservation and recreation. please join me in welcoming rob gordon. rob? >> thank you, john. and welcome again to the heritage foundation. we have a great panel today. judging from many of the faces i see in the audience, we have a great audience, too, so i think we'll get some excellent questions. let me start by acknowledging rachel, the coalition's coordinator at the state policy network who worked with us to promote this event and is working with one of the speakers who's engaged with educating state officials on aspects of federal landownership. in a few minutes, i will introduce our speakers, and

after they made remarks, we'll take questions. but first i'd like to offer a little bit of context for our panel. states of dependence, reducing washington's control of the western u.s.. i think some comparisons regarding land areas are needed because the areas we're discussing are so vast that they're difficult to comprehend. when rural lands not under federal control -- when rural land's not under federal control and when those are considered together, they're greater than the nation of india. that shouldn't be really too ranking g, as based on the u.s., we're the third after russia and canada, and according to the natural resources conservation service, as of 2003, only 5.6% of the

united states was urban. so we have a huge area that is rural. now, i raise this because most americans live in urban and suburban areas, partially or predominantly developed areas are the rule, not the exception as to what most of us see on a day-to-day basis. and this certainly affects your outlook, and further development close to or within one's already little developed day-to-day world can make it seem as if everything is disappearing. i think this is a very inaccurate perception, and it is something that advocates of expanding government land holdings and imposing barriers and regulations to inhibit productive private land use seize upon. so let me offer a little bit more perspective. nonfederal rural lands total more than 1.3 billion acres, with more than half of that being range or pasture. while these lands aren't owned by the federal government, they

are subject to federal laws and regulations that have the effect of land use control in many instances, most commonly carried out through the endangered species act or the we hadlands provision of the clean water act. in addition to seeking more stringent controls on private land, the environmental establishment has historically sought to expand the federal state, often arguing that doing so is the only means of preventing land from being somehow wrecked. but consider this. while alabama, connecticut, georgia, maine, mississippi, new hampshire, new york, pennsylvania, south carolina and west virginia are not among the states with the largest percentage of federal landownership in all of them, significantly more than 50% of the land is forested. suffice it to say, there's a vast amount of land, range and forest not under federal control that has not disappeared. as some in the environmental

community would like you to believe. further, i would argue that providing food, fiber, minerals, and energy, improving the well-being of real people is hardly something that should be calculate as a loss. but on to the federal estate, which is vast. u.s. army corps of engineers, for example, manages 12 million acres of public lands and waters nationwide. this would be equivalent to an area bigger than taiwan or israel. now, while that may seem large to some of you, for those who understand a bit more about the federal estate, the corps of engineers is a relatively small player. there are four large land holdings agencies, the national park service controls 84 million acres of land, and that's roughly equivalent to the nation of finland, and requires some 28,000 employees. that sounds pretty big. but what may surprise you is the national park service is actually the smallest of the four major land holding federal

agencies. the u.s. fish and wildlife service is substantially larger, with 551 national wildlife refuges and additional other units constituting an area of 150 million acres, which is larger than the nation of the ukraine. and u.s. fish and wildlife service employs some 9,000 people at facilities across the u.s. the forest service again is larger. it has 155 national forests, 20 national grasslands, and seven national monuments, totalling 193 million acres. that's larger than the area of chile. the united states forest service employs some 35,000 people. and then finally comes the bureau of land management. the bureau of land management has 254 million acres, and according to the c.i.a.'s world fact book, that puts it in position 31 compared to the 252

other nations on earth. it would come in just after egypt, and it has some 10,000 employees who administer this land. all together we're talking over 260 million acres, which, one last comparison, is larger than france, spain, germany, poland, italy, england, austria, switzerland, netherlands, and the belgians combined. to do so, if wikipedia is correct, the four major land holding agencies have employees that are greater than the military forces of australia. the federal estate is too large, and it's time we began exploring how at least a substantial portion of these lands can be returned to the states. our first speaker today chairs the subcommittee charged with overseeing all those lands and federal employees, which, based on the numbers, would seem a formidable task. rob bishop is currently serving his sixth term as a member of

the united states house of representatives, representing utah's first congressional district. he serves on the house rules committee, armed services committee, natural resources committee, and is chairman of the house natural resources public lands and environmental regulation subcommittee. representative bishop served 16 years in the utah state legislature, including as majority leader and the unanimously elected speaker of the house. he served two terms as state chairman of the republican party. representative bishop was co-founder of the western states coalition and past chair of the congressional western caucus. he was also co-founder of the 10th amendment task force in the united states house of representatives. prior to engaging in politics, representative bishop spent 28 years as a high school teacher in utah, focusing on american history and government. he's married, and they have five children and six grandchildren and reside in

brigham city. following rob will be carl graham. carl is director of the sutherland's institute's center for self-government in the west. he came there following nearly six years as c.e.o. of the montana policy institute, montana's premier free market think tank and policy research center. carl completed aviation officer candidate school in pensacola, florida, and flew the a-6e intruder. following a tour in japan as strike operations officer for the commander carrier group five, carl transitioned to the f-14 tomcat. he served as squadron operations officer, flying and directing missions over bosnia and the persian gulf and acting as the carrier air wing liaison officer to the joint task force southwest asia. carl then served as special assistant and legislative liaison for the commander of the u.s. strategic command in omaha, nebraska, advancing his

interest in public policy. his final naval tour was with commander pacific fleet at pearl harbor. carl graduated from montana state university in 1984, earning his master's in national security affairs from the naval post and then from the naval post graduate school in california and is a naval war college graduate. carl was born and raised in glasgow in the northeast corner of montana. after a 20-year naval career, and he his wife cindy decided to settle near bozeman, montana, where he was a flight instructor and served on the u.s. commission of civil rights montana state advisory committee. he currently resides in salt lake city. please welcome congressman ishop. >> thank you. i appreciate that introduction. it's always good to be here. is that with or without crimea?

i want to tell you, words have meanings, and those meanings become significant. i was walking to work one day wearing a tan three-piece suit, and out of the one of the apartments came a teenager. i know he was because he wasn't wearing shoes and had a cell phone in his ear. as i passed him, he looked up and said that suit is so fly. and as i walked past him, i went, i was not sure whether i had been complimented or insulted. first i checked my zipper. that was not an issue. and it was not until i got to the office and talked to my 20-year-old staffers, they said in modern slang, i had indeed been complimented on that particular suit. we have the words, but unless we have a common understanding of the meaning of those, we don't -- we're not really communicating, and that's the problem we have with public lands in the united states. i think there are two factors that go along with it. the first is simply the size. i've got medium sized clusters and small ones.

enjoy. everything that's red is owned by the federal government. it is true, the federal government owns one out of every three acres in the united states, but it is concentrated with us in the west. we get the joy of having over half of the west being controlled by the federal government. that means that those of our friends who live in the east have some land, but they don't necessarily have the same kind of content. let me get the small one, for example. i picked three states at random. this is obviously the state of my speaker, my majority leader and me. in ohio and virginia and utah, everything that is blue is private property. our good friends in the east, really, they have some public lands and they have very little access, very little interaction. the idea of actually working with the department of interior is not really coming in concept. now, in the 1960's, the head of the park service at that time came one this plan that if i can get more parks in more congressional districts, i can get more money.

ironically, congress was dumb enough to fall for it. years later, we find there are national parks in 49 out of the 50 states in delaware still frantically trying to find something worthy of the park. they got a monument now, but they sold out cheap. but it's only 13% of the land. the bulk of the land, 44%, is land, but unfortunately b.l.m. is only found here in the west, a few bases are now in the east, but there is no concept of what the b.l.m. does. consequently, when you talk about public lands, my good friends in the east, the only contact they have is the national park nearby. you say public lands to them, and they think of a pretty tree by a pretty lake. these of us who live in the west, we deal with the b.l.m. when we say public lands, we think of sagebrush. we're talking the same language, we don't mean the same thing, which unfortunately means most people in pennsylvania and new jersey and new england, when they say public lands, they think public

lands are yellowstone. they are not. in fact, sometimes i want to remind them that yellowstone was established in 1872 in the territory of wyoming, and it took them six years give them any money. the second national park was in michigan and we gave it back to michigan because they could better manage the land. they are still managing mackinaw island and still doing a far better job than we are. it was 18 years before the federal government actually came up with the idea of another national park. so we have those concepts that simply are different. what it shows us, though, is that, first of all, states can manage land just as well, if not better than federal government n. testimony we had dealing with forest lands and idaho and washington, even though idaho and washington have the tribes in those two states, they have fewer forest lands. they get much more production than the federal government over a bigger quality of land, and they have healthier

forests, fewer fires, better managed land, less infestation than the federal government has, which simple means you don't have to have everything managed by washington in order to have it done well. states and tribes are showing that they can do just as good a job, if not a better job. and i also want to point out that in all due respect, sometimes the federal government just hurts people because they have the ability of having decisions made by local officials who sometimes are good and sometimes aren't. i'll give you a couple of examples n. fort vancouver in washington, there is a national historic site which was established in 1948, then they had a property that was added. they have a pavilion there, areas that people can go and re-create. the land manager at the site thought the noise that came from the public access area was too loud for the artifacts in her site, so she cancelled such things as a church picnic, a

youth soccer fair, a concert that was there for the benefit of veterans, because the noise the church picnic would generate would disturb her artifacts in the site, and there was nothing you could do about it except come to congress and try to put pressure on them. lake mead in las vegas. a taxi driver was murdered, his body was dumped out there. they did a search for it, called off the search. the family wanted to hire a company to go in and find the body t. took them 15 months to raise the money so they could buy the liability insurance to get the special use permit that the federal government insist the family did, and once they actually raised the money the year after the death, they found the guy's body in two hours. we had an air force staff sergeant also drowned in that area, they called off the search. it took the family another 10 months getting an attorney, going to court to have the right to have a search and rescue company who volunteered to help find the body to allow them to come in on federal land

and actually, once they were allowed to come in, they quickly found the body. i mean, we have examples all over this country of federal land managers who actually end up hurting people. in the tetons, they established the paddling , canoeing would bother the fish habitats up in that area. they found out later, doesn't have anything to do with it, but it took too much time and effort to change the rule. they had an area that was designed for river recreation. i don't know what you do if you're not there. i mean, whatever it is, they banned everything because simple it will took them too much time to try and do that. we also have the simple example of federal government in this land process harms kids in the west. look, up in the first picture, everything that's in red are the states that have the hardest time funding their education system.

they raise the least amount of increase in their funds for public education. the bottom is obviously the area that you have public lands, and i hate to say this, but there is a 1-1 relationship between those who have a problem in raising funds for recreation and public lands, simply because we have less availability to raise taxes. we also have less access to the resources that are there. the west gets screwed over compared to what happens in the east. over a 20-year period of time, it is simply a matter that the east can raise twice the amount of money as the west can for its own public education. we in the west are taxed at a higher rate than those in the east. we put a higher percentage of our local effort and our local budget into education. i'm an old teacher. my kids are harmed by it. my salary was depressed by it. my retirement is still coming through the state education system. you're putting my retirement in jeopardy. that ticks me off. but it's only because we have a different way of looking at the

land, and as i said earlier, one of the problems we have is that people just don't understand what we're talking about when we deal with public lands. all of the west and public lands are not yellowstone. one last statistic we found out, and this hits people who actually have been in the east, you add up all the revenue that comes from these lands and all the expenses we have from the lands, they're put up $8 billion to $9 billion for the wonderful opportunity of controlling the west. so one of the things we'd like to see, there are three false narratives i'd like to dispel, and that's my effort here in congress. number one is that only somebody in washington has the view of what is good for the entire country, false their active number one. false narrative number two, if there's ever a difference of opinion on what should be done between public lands, obviously washington has to win. false narrative. and narrative number three, the west has to be protected from itself. i am tired of that.

my education funding is tired of that. it's time to look at things in a new way of doing it, and that's what we're trying to do in congress today. thank you for the time. i'm sorry to have spent so much time boring you with all that. [applause] >> i'm not sure why i'm here anymore. you guys pretty much got it. by the way, of a much shorter bioif you're interested for the next time we do something like this. >> you don't often get to introduce an f-14 pilot. app all right. i'm going to try to put this into a context of why you folks should care. representative bishop did a great job of laying out some of the false promises out there, the misunderstanding and it is language that we use, but in the west we're looking at trying to restore a balance, a balance between individual and state rights and responsers have the federal, state, and federal government. i think that's one of the reasons you should care, because it has a broader context. we're seeing growth in federal power right now. the growth of the regulatory

state, obamacare, dodd-frank, the endangered species act was everything else, and most of this is being done under an umbrella of cooperative the apa regulations with the federal government buys the rope and the state uses it to hang themselves. that comes back to federal land and federal funding. western states are particularly vulnerable to this because of a representative bishop talked about. we have a very specific question, why not govern ourselves? why aren't the states independent and why not govern ourselves? you can make the government more accountable by bringing it closer to home. a government that work for us instead of against us and being able to decide our futures.

being able to decide the best way to educate our kids, to steward the land, providing public safety and services using local solutions and resources and needs, and solutions reflective of those things not based on one-size-fits-all solutions. from experts that are not experts at the local level. we can see who is most at risk at this. and if you have had some stuff laid out, if you missed those numbers or comparisons i have more. you can see who is mostly hurt by this, by looking at who is manning -- managing the barricades, for the often counterproductive federal policies we are saying. the west is the canary in the coal mine. so you can see ranchers in nevada getting on their horses protesting loss of access, or

grazing restrictions on land they have been on for generations. atv riders in utah are protesting trails -- rail closures, trails they have been with their families on for years. in new mexico they're breaking down barricades put up by federal officials to stop access to water that the ranchers have used responsibly for generations. the account cpas calling on the utah legislature to be more responsible with federal funds and the costs and risks that come with those funds, looking at the level of dependence that we have there, on federal money to perform basic state functions. the primary vulnerability in the west is we don't control our own resources and the biggest reason , i have to show you the same thing, is that we don't own the land. 50% of all the land. 600 million acres of land, western colorado, nebraska line

is owned by the federal government and that is enough to cover the eastern seaboard plus kansas, plus taxes, plus france. this is a lot of land. 91% of all federal land is in the west and federal land makes up 50% of western states. that is just unfair. that is 50% of land we are locked out of. base, 50% of the economic potential. owned federal government half of the casinos in las vegas and started shutting down chairs and blackjack tables, can you imagine the impact? off access to half of those beaches in florida, can you imagine the impact? down 50% of the trading houses on wall street, the impact might not be so bad. but we have the same rights as

everyone else but we are not allowed to exercise those rights because we settled those lands later, after somebody or a group of people decided to shut those things off from other uses, from productive uses. nationalthey are treasures that belong to all of us and some of them are, but not a lot of them. if you look at the national parks and the wilderness area, but a lot of people talk about shutting down the national parks and national monuments. make up a small fraction of the federal estate. generally less than 15% of the federal lands in any given western state are those kinds of special land. most of them are decimated multiple use as noted lands, some fish and wildlife service thing like that and this is about 20 or 30 million acres per state out in the west. they fall under that multiple use designation, the sagebrush

-- this is 20-30,000,000 acres. this is the area the size of virginia within the western state, plus or minus new jersey in the western state, that we are increasingly losing access to. we need more control over those multiple use lands, we are talking mostly about service -- lan service for economic uses. law, thepassed a transfer of public land, not national parks but those multiple use lands to state control. 4 other states, wyoming and idaho and nevada are studying can help with this we will see legislation close to utah, and we are working with new mexico to get a study done at a first step. at the congressional level representative bishop and others are doing great work and i'm not here to critique these sources.

each parcel of land will have its own unique road in some ways. i am welcoming all comers to this fight. we want to lay the groundwork to establish the information -- the information for folks like you, to give each state its own approach. these are lands with trillions of dollars in resources and tax revenue, and hundreds of thousands of jobs that are being locked up by people who really don't understand what is at stake here. one of the things that is really ironic is that people who claim to worry so much about diversity are choking off an entire way of life, imposing their values on the production economy in ways that they don't understand. our goal is to stop that and to managenservation, those lands long into the future, and in short just be proper stewards of those lands.

other means of control is funding. showed withtative that great slide, the federal government is taking up an increasing portion of the budget for states on average, about one third of state budgets are provided by federal funds. this is dangerous and this is one reason that western states become dependent on federal funds. again, we don't have access to our revenue base, but these are federal funds that are telling us how to educate our kids and provide for public safety, and run our businesses and charities. this comes with strings that tell us how to do all these things and we have no control over what we do with those funds. this is not just a western problem, this is across the nation. these are discretionary funds so they are under increasing stress, getting squeezed between entitlement spending, and as interest rates return to historical norms, we will see them between spending of the

national debt -- and we need to work to create a plan for when those funds come under way, when those funds come under more pressure. we are states develop legislation and policies, we see the strings that are attached to them to measure the risks of accepting them, and the risk of potentially losing them, creating plans to be responsible to do what we do in our everyday lives, to plan for that day when the funding source to disappear, so we got the right programs and buttain the right programs before i do there is another thing i want to point out to you. we are trying to create a movement in the west and get support for that movement across the country, one state, leading the way on most of these things. 2 states is kind of interesting. that is what i am trying to do -- we are trying to do to create activist leaders -- and get the

right things done out there so we have more control over our destiny. and we provide the tools and you we some of the handouts -- are trying to reclaim our states rights and recover that balance a yen to plan for the future. this goes beyond just wanting to do the right things. this also advances conservatism. this is near and dear to a lot of people in this room and a great place where we are in heritage, conservative principles are at stake here and these are winning issues for a center-right country to show the cost of going down the wrong path, and providing an alternative, not just showing the cost of providing a way forward. the left is trying to change the electoral map, to create a permanent majority by scaring or criticizing a stronger bureaucracy or federal the increased

dependence by increasing benefits. obama cap creates more dependence and raises the cost of health care, and subsidizes the increase. we are having more people and businesses beholden to special interests out there. i don't believe in crony capitalists, i think it is an oxymoron. if you are a capitalist you want your goods and services out there so you can be a crony. subsidiese targeted for someone who wants regulations and others in competition with you. that is a government powerful enough to pick winners and losers and decide it's it to stand and who doesn't based on connections, or standing with a correct agenda or policies. that is not the american way and that is not what made us great and that is not the direction we

can go very much longer. i also try to create the permanent majority by threatening and silencing opponents and you have political leaders publicly berating individuals and private citizens, calling on the agencies to honor or target private citizens who are engaging in illegal speech, you have people threatening their opponents for their religious beliefs, calling for the loss of their jobs. they are able to do that because the independence that we have agreed to, we have to cut those apron strings and restore our ability to self govern and our independence. we have to find ideals we can unite behind as a center-right country. a longbeen right for time and i am tired of being right, i want to win. we have to have this idea that we can win, these are winning issues in the west. these are winning issues across the country. tom, in montana -- a

small town in northeast montana, he should not be forced off of the land that his grandfather homesteaded, because george wolves"w "dances with and he wants to put wild bison out there. i saw him a few months ago, he that hist lose land family has grazed and improved the 1600s because a sample cisco billionaire at a fundraiser for the prairie chicken. a caregiver in boise should not lose her job over a sequester or a shutdown while we are continuing to run vegetable psa's because it comes from different money. it is a philosophical war for the west, the freedoms that we cherish and the proper balance between individual fulfillment, and government power.

these western issues provide opportunity for all of us to move forward and if we can do it together we can show working-class families, the old reagan democrats, there is someone fighting for them, there is a path forward to them that enhances their traditional values of hard work and families and communities. we can be there champions and move these issues forward. we need the resources under these lands. a lot of those folks who want to make those resources available ave a habit -- are having very difficult time because they are being disenfranchised. there are more orbit -- urban voters than rural voters. this is not a code word or anything, this is a demographic term, population density. that is part of it. this is also a connectedness or ess with thatdn

economy. there are things that are important in that economy that make it work but the further you get from the land, the less understanding that you have, and the less likely you are to move those aside. west, if you go to billings, montana or albuquerque, new mexico, most of the people there will be 1 or 2 generations removed from someone who actually worked the land or the law of the land and develop resources of the land and they understand what is important for that economy. to washington, people don't understand that. they will sometimes unintentionally harm the people and values and economy that we need to put gas in our cars, and when rural america goes to work in the morning, they are not just going to work, they are preserving traditional values

and ideals that made this country great. there are people who want to prevent them from doing that, powering the most powerful economy in the world and thumbing their nose at him pot dictators. there are some people who don't even want to, but our. are. this world production economy values hard work and community, but in the meantime in doing that they are feeding and powering the world. there are those who don't value that, and they are trying to stop that. self-determination and self-government, that is what is at stake for this war in the west. it is not about dollars and cents. this is not a dollar and cents issue. this is not about those with the most to lose, this is about basic fairness and understanding the values of this world production economy. i'm starting in the west because this is in my backyard and where

i to live, quite frankly, and this is where the risks and great opportunities are as well. great risks have great opportunity and i hope you create your own revolt in your own backyard and if you did that i would be honored to help you. thank you. [applause] >> great. we have plenty of time for questions and plenty of material to work with. question, if you could just raise your hand and then state your name and affiliation. >> national center for public policy research, in the late 1990's, the department of interior carried out an theytory of the land, and found some 3.3 million acres, if memory serves me correctly, that it cost more money to manage

that land -- than was really worth their time. nothing ever came of their recommendation to do that, including the years of the george w. bush administration that did nothing on this issue. councilman, i believe that you --e introduced legislation correct me if i'm wrong on this to sell off those 2.3 million acres, i believe i saw an article not long ago that says that the obama administration opposes that because they want to expand government tendency, and not reduce it. is, why arefor you there these different alternatives that carl outlined, -- which avenues would you asport, to openly convey

much of the federal estate as possible, from washington to the states? thank you. >> it is not my bill, i am the cosponsor. the bill has passed the house and is one of the few bills, a handful of bills sitting in that -- sitting in the senate. it actually needs to go forward and the administration can testify against that particular bill. it is justr reason, mind-boggling, i don't know. that bill should go forward. that is the low hanging fruit. we should have to have a standard for our policy, to transfer as much land and responsibility for that land to the state as possible. this can either be done with the administration or to the courts with litigation, or with legislation. utah is doing differently than has been done in the past is there has always been a problem, but what is the remedy?

the east does not care if the west is being treated unfairly, what is your remedy. the state of utah says, if we have the land, this is how we would manage it. this is how we would maintain it. when you go to congress you can say, this is our remedy, give us the land. save your money and give us the land and everyone will be happy. >> thank you. >> thanks a lot. >> terry camp with senator hatch's office. i know that you have had some experiences with wilderness land along the southern border and i wonder if you could talk about the impact federal land has on for security? >> thank you for opening a new avenue of discussion. but in very quick terms, as chairman of the public lands subcommittee, we have looked at problems on the border.

almost all illegal drugs and human trafficking are coming through one section along the border so you have to ask yourself, why do people want to come here illegally, through tucson and not through maine. this is owned almost 40% by the federal government and is protected with over half of this inwardness category, or some other land preservation category that prohibits the bureau and the border patrol from doing anything except foot reconnaissance. they are prohibited from going in with anything that is mechanized unless this is a life-and-death situation. that means the border control does not have the ability to control the border. what we need to do is change those laws and we did that, in california so they could finish building the wall. you need to change that across the entire border to simply allow border patrol to do what they need to do to control the border. this is a statutory prohibition they cannot overcome. you have to change the law.

one reason we can't say the southern border is secure is because the loss for those land designation prevent the border patrol from doing the law and we won't have a secure border until we change that statute. book" at 8:00new as kenneth feinberg, who oversaw the 9/11 victims fund. >> i don't see any distinction. if you try to justify my program on the basis of the victims law, i can't convincingly explain why trade centerworld no. i think the only way use -- identified as program as a special car about it from the perspective of the nation. , recognition that 9/11 was along with the american civil

harbor, maybe the assassination of president kennedy, and 9/11 -- the impact on the american people was such that this was really a response from america, to demonstrate the solidarity and the cohesiveness of the american people towards these victims. >> read more of our conversation with kenneth feinberg and other featured interviews from our programs, and "q & a" -- now available -- as a father's day book at your favorite bookseller. >> house majority leader erik cantor has lost his primary challenge to tea party candidate david bratt. cantor spoke to supporters for five minutes.

>> first of all, i want to thank my wife, diana. who has put up with me in elected politics now, for 20 something years. and in the process, raised our kids. one of them is here. the other two are off working. a mother-in-law and mother, brothers, it all starts with family. we know that. i want to thank them. [applause] and then to all of you, so many of you who not only today spent endless hours in the heat with your undying loyalty and effort, i want to thank you for that as

well. i tell you, absolutely. [applause] it is not only the hundreds of volunteers. it is also my team. my team has served the constituents of the seventh district in the district office have continued to serve, but also my political team. they have put in so much extraordinary work to try and win this campaign. they have done so for the last decade or more. i want to thank them. [applause] now, serving as the seventh district congressman and then having the privilege to be majority leader has been one of

the highest honors of my life. what i set out to do and what the agenda that i have always said we are about is we want to create a virginia and america that works for everybody. we need to focus our efforts as conservatives, as republicans, on putting forth our conservative solutions so that they can help solve the problems for so many working middle-class families. that may not have the opportunities that we have. we can also put our solutions to work for the most vulnerable. i spent a lot of time of education opportunity make sure that everyone in america can have access to that american dream, starting with quality education. we talk about resources a lot in campaign and in congress. i'm really proud of the gabriella miller kids first research act.

[applause] it says as conservatives that we do not believe you ought to spend taxpayer dollars on political conventions. that in fact it is probably better to help cure disease because not only do you save lives and help people, you can ultimately solve the federal deficit problem by bringing down health care costs. [applause] these are the kinds of things that i know will continue to work on. i know there is a lot of long faces here tonight. it is disappointing, sure. but i believe in this country. i believe there is opportunity around the next corner for all of us. i will look forward to continuing to fight with all of you for the things that we believe in for the conservative

cause, because those solutions are the answer to the problems that so many people are facing today. thank you all very, very much. [applause] [applause] >> today, the house armed services committee investigates the u.s. taliban reasoner exchange involving sergeant bowe bergdahl. this live at 10 a.m. eastern on c-span three. and join the conversation on facebook and twitter. today, hud secretary shaun

donovan is before the senate budget committee, he is president obama's choice for the white house budget office. you can hear his testimony live at 2:30 eastern on c-span three. -- at 2:00 eastern on c-span 3. >> we will need to have to learn again how to work together, how to compromise, how to make pragmatic decisions. in the upcoming midterm elections americans will have choices to make about which path they want to go down and whether we will make the investments that we need in our people. i will leave that discussion to others. but for a lot of us, in the private and non-private sectors we have a lot to do. the government does not have a monopoly on good ideas, obviously. and even if they wanted they should not try to solve all the problems by themselves.

we have a responsibility to do what we can. >> hillary clinton's latest book is called "hard choices," about her time as secretary at -- secretary of state and how this influenced their decisions. watch coverage of hill -- at friday in aon book signing at 11 a.m. eastern on saturday. these will re-air saturday night at 8:30. book tv, television for serious readers, every weekend on c-span 2. >> coming up on c-span, "washington journal" is next. then the house meets to cover the spending bill for the fda and food and drug him and his -- for the food and drug administration. kosar -- hour, paul gosar to fix issues with the

veterans health care program. at a: 30, joe courtney talks about student loan financing policy. "washington journal" is next. ♪ host: good morning. it is june 11, 2014. in a surprising outcome, eric was defeated last line in the gop primary by the tea party candidate. the loss is sending shockwaves throughout washington. it was his support for immigration reform -- that proposal is now dead. we want to go outside of washington.