mr. hensarling: just a simple yes or no. were you aware or not aware of the pending application prior to the consumers. mr. cordray: we pursued this for well over a year before ally themselves -- mr. hensarling: were you aware or were now not aware. mr. cordray: we pursued this for more than a year before they brought it to our attention. mr. hensarling: so you were aware. isn't it true they were in discussions with both the federal reserve and the fdic on how to -- thousand the determination of an ecoa violation could adversely impact their application, is that true? mr. cordray: we had no decision making authority over those matters. we were attempting to conclude our investigation. mr. hensarling: but were they in discussion? was senior staff with the fair lending of the cfb in discussion with the federal reserve and the fdic regarding this application? mr. cordray: i believe there were consultations about them. mr. hensarling: you say consultation, we say discussion. pull up slide number six, please. i believe on october

mr. hensarling: without objection. mr. huizenga: it also noted the precedent of dispute resolution which exists in streamlining the american judicial system. one of the complaints i hear all the time is we're bogged down in court. arbitration was a tool introduced to streamline that. not to eliminate anybody's rights. not to eliminate a fair hearing. but purely to start to break the log jam. i'm very curious, do you really believe that's just -- that report reflects accurately how these consumers use these tools? mr. cordray: if i may. our report has been widely recognized as the single most comprehensive and informative report on this issue ever done. had access to new data from the american arbitration association and others and it is an outstanding report. i have seen and we have tended closely to criticism of that report. the been mostly incident. we sat down with the authors of the one critical study, one of them agreed to sit down with us and talk it through. the other did not. but we have looked at all of that. mr.

mr. hensarling: the gentleman's time has expired. the chair now recognizes the gentleman from texas, mr. hinojosa. mr. hinojosa: thank you very much, chairman hensarling, and ranking member waters. for holding this important hearing. on the cfpb's semiannual report. director cordray, i want to thank you for your appearance here today and for your exemplary leadership at the consumer financial protection bureau. before i proceed with my questions, i wish to voice my strong support for cfpb and its mission of protecting american consumers. mr. chairman, hensarling, i ask unanimous consent to enter my opening statement into today's record. mr. hensarling: without objection. mr. hinojosa: with that i'll be able to move right into my questions. director cordray, many argue that the bureau issues a payday lending rule in line with the released outline, that if you do that, it will eliminate a crucial source of lending for many low-income people that have no other options. why does the bureau see the need to regulate payday lenders and why d

mr. hensarling: the time of the gentleman has expired. the chair now recognizes the gentleman from georgia, mr. scott. mr. scott: thank you very much, mr. chairman, over here, ror dray. -- cordray. first of all, mr. cordray, it's very important, for the cfpb, for this nation to know that there are democrats on this side of the aisle that have serious, serious concerns and issues about how you're dealing going forward with this racial situation at the cfpb. we have legitimate concerns. and i have expressed those. but here is the most dramatic fact with the auto dealers, and that is this. your methodology. now fair is fair. and when you start talking about discrimination and you start talking about giving people checks because they've been discriminated against, but then you use a methodology that is flawed, totally, based upon the last names of people, so now what we have, and you know this for a fact, you have many white people out here whose last names are johnson or williams or robertson or smith or scott or whatever. who are getting che

mr. hensarling: without objection. mr. huizenga: it also noted the precedent of dispute resolution which exists in streamlining the american judicial system. one of the complaints i hear all the time is we're bogged down in court. arbitration was a tool introduced to streamline that. arbitration is a tool introduced to streamline, not to eliminate anybody's rights. not to eliminate a fair hearing. the purely to start to break the logjam. i'm very curious. do you think this report reflects accurately a consumers use these tools? >> our report has been widely recognized as the most conference of report on this issue ever done. new data from the american arbitration association and others. it is an outstanding report. we have tended closely to criticism of that report. it is an mostly incidental. we sat down with the authors of the one critical study. one of them agreed to sit down and talk it through, the other did not. >> i have got a question. where did the study estimate the --nsaction costs associated >> what we look tha

mr. hensarling: the time of the gentleman has expired. the chair recognizes the gentleman from california, mr. sherman. mr. sherman: i think the gentleman from south carolina is using -- misusing the word preempt. it means prevent the state law from being effective. to supplement means you have to bey the state law and you have to obey the federal law. mr. hensarling: will the gentleman yield -- if the chair will yield the additional time i'll yield. mr. hensarling: the chair yields an additional 30 seconds. mr. mulvaney: my state has a law with two-day waiting period. they're proposing a 60-day waiting period. doesn't thus the federal regulation preempt state law. you would agree it would? mr. sherman: no. if the federal law requires me to wear a belt and the federal law requires me to wear suspenders, i will comply with both laws. f you take the position that the state legislators are in best position to provide this, you should repeal dodd hch frank. when we passed the law establishing this cfpb, we decided that in addition to following

mr. hensarling: the gentleman mr. pittenger. mr. pittenger: you have touted the transparency of your agency, is that correct? you and 12 of our directors emails for official business, is that not correct? mr. cordray: that is very limited. how does the american public have any confidence in the records, the information that's captured recorded if you are using private email. mr. cordray, do you approve of what secretary clinton did? mr. cordray: i'm not familiar with that. r. pittenger: you are not? is this proper accountability? do you feel the public is getting the information they deserve to have. mr. cordray: there are policies to make sure government work is being captured. mr. pittenger: will you turn over to the committee all these private emails. mr. cordray: i don't know what you are talking. mr. pittenger: we would like to ave a full undering. regarding your structure in the fpb you are the single director, do you believe it would be more prudent and more acceptable to have perhaps a five-member bipartisan commission? mr.

mr. hensarling: the gentlelady yields back. the chair recognizes the gentleman from texas, mr. neugebauer, for two minutes. mr. neugebauer: thank you, mr. chairman. i want to use this opening statement to address an issue that director cordray raised himself in speaking before the consumer bankers association conference a couple of weeks ago. in speaking before the group of bankers he highlighted the virtues of bringing market changing enforcement actions instead of going through a transparent and formalized rule making process. some call this practice regulation by enforcement. further he critiqued his critics saying their concerns were misguided. after hearing these comments i feel it necessary to respond. businesses of all sizes deserve certainty. from the largest financial institution to the three-office title lender, regulatory risk drives up cost and stunts economic growth. federal agencies that are authorized to even force federal law take appropriate action when they hold unlawful actors accountable. however when they routinely bring enforcement actions instead of bring

mr. hensarling asked you those questions you wanted to make sure -- >> i wouldn't agree with that. i wouldn't agree with that characterization. but i'm happy to explain if you want me to. >> well, i'll just -- i won't have you explain it. maybe we'll do it in writing. maybe i'll get some documents from you. i want to pull up another exhibit -- actually, i'm not going to put it up. i'm going to hand you a document. this was provided to us in response to our subpoena number 20 and 22. this was the only document that is in compliance with our subpoena. and this is in regards to records memorializing the final remuneration plan with regard to ally. do you have that document in front of you? >> no, i do not. >> i believe you have it -- your staff has it. this is basically a computer printout. if you'd hand it to the director, please. this is a computer printout. this is the only document you've given us to show us what the remuneration plan is. could you read this document for the committee so we can understand what this document says? and your sunshine and compliance with the committee

mr. hensarling asked you those questions you wanted to make sure -- >> i wouldn't agree with that. i wouldn't agree with that characterization. but i'm happy to explain if you want me to. >> well, i'll just -- i won't have you explain it. maybe we'll do it in writing. maybe i'll get some documents from you. i want to pull up another exhibit -- actually, i'm not going to put it up. i'm going to hand you a document. this was provided to us in response to our subpoena number 20 and 22. this was the only document that is in compliance with our subpoena. and this is in regards to records memorializing the final remuneration plan with regard to ally. do you have that document in front of you? >> no, i do not. >> i believe you have it -- your staff has it. this is basically a computer printout. if you'd hand it to the director, please. this is a computer printout. this is the only document you've given us to show us what the remuneration plan is. could you read this document for the committee so we can understand what this document says? and your sunshine and compliance with the committee

mr. secretary, your written statement will be made part of the record and you are now recognized for five minutes to give an oral presentation of your testimony. thank you. >> thank you, chairman hensarling ranking member waters, members of the committee for the opportunity to testify here today. before i begin, i'd like to say a few words about this morning's events in belgium. the united states condemns in the strongest possible terms today's act of terrorism in brussels. our thoughts and prayers go out to innocent civilians targeted in these horrific attacks. at treasury, we work with foreign governments every day to identify terrorist financing networks in the wake of attacks we work with them even more so. we work especially closely with our counterparts around the world. right now, treasury analysts are reviewing information to try and recover leads on the brussel attacks and we've offered our assistance to belgium authorities. our hearts go out to victims today's events and our commitment to stopping the flow of funds to perpetrators of these kinds of attacks remain steadfast. since my testimony last year, our economy has continued its record breaking streak of private sector job