the cfpb doesn't have the bank profitability mission. it's not tasked with maximizing bank profitability. therefore it's an agency that is incentivized to make sure there's good consumer protection >> wasn't that, quote come a good consumer protection, didn't exist in these other agencies? their missions were not to have bank profitability. >> sure they work, safety and soundness and a bank that's not profitable is not safe and sound. it isn't about profit -- >> so you're saying their focus was bank profitability. there was nothing, no protections, no consumer issue with respect to the consumer to get >> virtually none and i can give you some examples. the federal reserve had the power and the equity protection act to the homeowners to pass regulations that would curb the worst abuses of the sub prime lending. it didn't act. >> what fannie and freddie fall into the category? >> fannie and freddie are complicated and a sad story to this. the problem in the lending market was from the private label securitization. that is then spilled over

it was something that was comparable to the cfpb. it provided a baseline for the imposition of credit to the economy. that particular study showed that another regulatory bill, as a result of state restrictions on banking and credit and so forth, led to an 80 basis point increase in interest rates. that is what you typically get with regulation. we did a comparison and made the point that cfpb would allow a greater set of regulatory restrictions on lending than that. we took that as a basis -- >> i have to give a professor chance to respond. >> what to to multiplied it by? some number yenta out of the air? that is not scholarship. you said this was 80 basis points and the interest would be 160. you can't do that barry would have to give a chance before we find out. >> my time has expired. >> i recognize mr. ginter for 5 minutes. >did you pull a number out of the air? >> no, if you look at the paper, we used that as a baseline of 80 basis points and we couched in very careful language. we said this is inaccurate and this is the best we

out, the cfpb will be and the fed but not under the fed. it is in the financial stability oversight council but not under the board of governors. its budget is set by congress as a transfer from the fed of 10/11 or 12% in the last year of the budget but it is not under. the fed has other important consumer protection responsibilities that it will need to carry out. travis and lisa have mentioned the most important. i will tell at least one more story. i came to washington in 89. i came with the savings-and-loan bailout cleanup and as part of that, i worked on a number of issues related to the law passed in 1989 and the federal deposit insurance corporation improvement act in 1991 and after it that i was invited -- invited to come over and have coffee with a senior fed official and it turned out to be a little job interview. not to work for the fed but to see if i would be invited to be on the so-called consumer advisory council. so i did a three year term, let off for good behavior on this so-called consumer advisory council. i bring this u

let's let the cfpb do it's job. >> thank you. mr. pincus, you are recognized for five minutes. >> thank you, mr. chairman, members of the subcommittee, thank you for the opportunity to testify for the subcommittee today on behalf of the chamber of commerce and with hundreds and thousands of businesses at the chamber that the chamber represents. let me at the outset protect mr. levitin's misperception about what the chamber's long help position has been. through the debate over dodd-frank, the chamber made clear it strongly supported sound consumers protection and enhanced consumers protection at the federal level. the chamber businesses just like consumers have a strong interest in a marketplace that's free of fraud and free of other deceptive and exploitive practices so that businesses can compete. businesses just like consumers don't like predator practices that hurt consumers. at the same time, what is essential is to ensure that regulation does not impose duplicative and unjustified burdens. they unjustifiably convert resources to

into directorships at the cfpb. we have reviewed the intellectual foundations of the cfpb based on the writings of the people behind its creation. the view that people do not know what they are doing when they borrow money in that you need to protect consumers from themselves has really become part of the genetic code of the cfpb. unfortunately, at least from the ridings that provided the foundation for the new agency, there is little recognition of the fact that consumer lending has really improved the lives of millions of people and spur job growth in this country. the cfpb has the tools the but the highly interventionist agenda described in this foundational papers into effect. that is as it reason i'm concerned. few agencies can ban abusive lending products. pretty much what those are are left up to the cfpb. bacon also steer financial- services companies toward offering develop products designed by the cfpb, by banning products that do not conform to their view or by making it legally risky for lenders to deviat

i read the cfpb mission statement yesterday. out of 764 words there's no talk about save your soundness in their mission. >> they don't feel it is the best bang for customers. similarly consumer abuses can have profound safety and soundness applications. there needs to be a lot of cross communication. >> in regard to the orderly liquidation of the already there have been a number of examples. i have continental illinois's bank, 14 statements, took seven years to resolve at cost of $1 billion. washington, four forty million assets and fifty bank employees. citigroup, $1.9 trillion in assets. the time and energy, the staff needed. i know i am running out of time but maybe i can catch you on the second round. i want to find out how you believe that our time will take to wind down simple institutions and how you will be able to exercise authority over much larger institutions. i will yield. >> we will give you lots of time to think about that. mr. baca from california for five minutes. >> thank you. i at this than the fdic has regula

so the cfpb has to share with the other regulators.ts examination of the large banks, and the other regulators have to share their data and paperwork under examination to the small banks. if they don't enforce the law properly thus efp de connect and notify the provincial regulator that they have reason to believe that a smaller bank or credit union has engaged in a violation of the law and must provide a written response. ultimately the bottom line, they can't enforce it but with a candor is to call attention publicly to the lack of enforcement and we think that will be a significant factor getting the regulators to do the right thing. it goes the other way, too. if they fail to act, then any of their regulator has authority under the statute can recommend that the cfpb initiate an enforcement proceeding if they don't do so within 120 days, in this case the agency can act and they can go out and enforce and then there's a number of consultation requirements under the statute so if you see a picture emerging. these are not -- we are go

how will that work in relation to the cfpb? do you envision a consumer protection within the fdic that takes the regulations that come from the cfpb and modify them for the other institutions? what kind of -- are we creating a two-tier system here? >> i think under the statute the supervision enforcement remains with the primary banking regulators. the institutions will stay with us in terms of the examination. we have never had authority for the consumer role. >we had never had the ability to write the rules. the fed rice the rules. we have coordinated with them. i think the cfpb director will be on the fdic board. that will help assure coordination. i am i hope that this will help increase the understanding about broader regulatory issues. in terms of creating a new division, i want to emphasize the examination staff reported structures in the region that this was an organizational change. there was additional administrative staff to support the organization that -- or his racial separation. it -- organizational separation. th

supports the cfpb. you have republican senators saying that they will not confirm anyone unless you do exactly what we want. using it, taking hostage the entire legislative process to get what they want. they have forced the president really with no other choice since he supports it and the overwhelming majority, they would like someone to look at their loans, their credit cards, their student loans and making sure that they are fair. making sure there is a fair playing field that consumers can understand what the terms are. that they are printing for everyone out there to understand. we have a basic disagreement between the parties. i do want to address my questions to our distinguished guest in the areas in which she has played such a fundamental role. i want to go back to the too big to fail, which is a big issue. i know it is the closest of the hearings we will be having. some have argued repeatedly that the financial reform law, particularly the orderly backwardation authority, perpetuates rather th

how will that work in relation to the cfpb? do you envision a consumer protection within the fdic that takes the regulations that come from the cfpb and modify them for the other institutions? what kind of - are we creating a two-tier system here? >> i think under the statute the supervision enforcement remains with the primary banking regulators. the institutions will stay with us in terms of the examination. we have never had authority for the consumerole. >we had never had the ability to write the rules. the fed rice the rules. we have coordinated with them. i think the cfpb dictor will be on the fdic board. that will help assure coordination. i am i hope that this will help increase the understanding about broader regulatory issues. in terms of creating a new division, i want to emphasize the examination staff reported structures in the region that this was an organizational change. there was additional administrative staff to support the organization that -- or his racial separatn. it -- organizational separation. the foc i

this new agency, and we've sent a letter to the president saying some changes need to be made in the cfpb, the consumer financial protection board, because as it's currently constituted, it answers to no one, and i think could be a serious threat to our financial system. >> and what about politics? you've said that the big goal of the republicans is to make this president a one-term president. >> of course. >> yet, 22% of those polled indicate they've got no preference for any republican running. is not having a clear nominee a good thing, a bad thing or a normal thing? >> you know what i'm reminded of in how the white house was thinking in '79 and '80, they were pulling for ronald reagan. they thought he was too extreme and too old, and surely, if he were the nominee, they'd be just fine. somebody's going to get on waning streak here on our side, and when you start winning, people start paying attention. this is going to be an extremely competitive contest for president next year. >> and what impact will sarah palin have if she becomes the nominee? >> she'll go out there and compete like

you're with the new cfpb, traveling around, talking to different military members about their financesat are you hearing from the bases and new recruits? >> from the bases, from the folks who deal with the financial issues i am hearing debt is an issue. service members are entering the military with debt. when i was at lackland air force base they said their trainees who arrive have an average of $10,000 in debt when they walk into basic training. >> there are protections for people in the military. they should not be foreclosed on. their obligations can be postponed. i want to talk about this. the service members civil relief act, let's talk about some of these things that's very important for people to know about in terms of housing. you know, if they're in active duty they can't be foreclosed upon and they have to have a 6% interest rate. no more than 6%. a lot of people don't know that. >> that's true. there are some details to that. it has to be an obligation that they -- a debt they assumed before they entered active duty. if you have a service member who's been on active duty fo

. -- supports the cfpb. you have republican senators saying that they will not confirm anyone unless you do exactly what we want. using it, taking hostage the entire legislative process to get what they want. they have forced the president really with no other choice since he supports it and the overwhelming majority, they would like someone to look at their loans, their credit cards, their student loans and making sure that they are fair. making sure there is a fair playing field that consumers can understand what the terms are. that they are printing for everyone out there to understand. we have a basic disagreement between the parties. i do want to address my questions to our distinguished guest in the areas in which she has played such a fundamental role. i want to go back to the too big to fail, which is a big issue. i know it is the closest of the hearings we will be having. some have argued repeatedly that the financial reform law, particularly the orderly backwardation authority, perpetuates rather th

. -- supports the cfpb. you have republican senators saying that they will not confirm anyone unless you do exactly what we want. using it, taking hostage the entire legislative process to get what they want. they have forced the president really with no other choice since he supports it and the overwhelming majority, they would like someone to look at their loans, their credit cards, their student loans and making sure that they are fair. making sure there is a fair playing field that consumers can understand what the terms are. that they are printing for everyone out there to understand. we have a basic disagreement between the parties. i do want to address my questions to our distinguished guest in the areas in which she has played such a fundamental role. i want to go back to the too big to fail, which is a big issue. i know it is the closest of the hearings we will be having. some have argued repeatedly that the financial reform law, particularly the orderly backwardation authority, perpetuates rather th

. -- supports the cfpb. you have republican senators saying that they will not confirm anyone unless you do exactly what we want. using it, taking hostage the entire legislative process to get what they want. they have forced the president really with no other choice since he supports it and the overwhelming majority, they would like someone to look at their loans, their credit cards, their student loans and making sure that they are fair. making sure there is a fair playing fieldhat consumers can understand what the terms are. that they are printing for everyone out there to understand. we have a basic disagreement between the parties. i do want to address my questions to our distinguished guest in the areas in which she has played such a fundamental ro. i want to go back to the too big to fail, which is a big issue. i know it is the closest of the hearings we will be having. some have argued repeatedly that the fincial reform law, particularly the orderly backwardion authority, perpetuates rather than elimi

whether the president should use a recess appointment to appoint elizabeth warren to the head of the cfpb, or has she become so polarizing at this point that she's a distraction to the dodd-frank implementation process and he should go ahead and move on and -- >> i didn't watch the hearing, but i read about it. i was told about it. i thought what happened yesterday was deeply unfair to her personally. i think she's done an compleptionally good job of -- exceptionally good job of not just heading up this agency, helping to run this consumer protection. and you saw her just recently lay out very important reforms to simplify disclosure of a mortgage application so people know what they're getting, can make better choices and can protect themselves from people who take advantage of them. and that is a very important objective. and, you know, i would just say that, um, you know, the oversight process is a very important thing to preserve and make strong and credible. and i think what you saw yesterday will leave everyone -- will lead everyone to question whether the oversight process is on th