jpmorg paid the fdic $2 billion.re is $72 billion bid-ask there at i think you've got to recognize. >> no, no i think what you have to recognize the contractual terms f the acisition which were very clear. ey knew that they acquired them. and only a year, year-and-a-half later did they go back and s, those are the fdic's liability. >> the government pushed all mergers and complains about too bigto faile. the gornment phes to acquire troubled banks failinwithout them. jpmorgan doeit and turns around and gets sued by feds and state attorneys general. a height of a lack of appreciation. i don't know why so many guys in finance out there don't like jpmorgrgan because let me tell you, they will go after jpmorgan first. but they'r goi after your firms ne. thanks for being with us tonight. gentlemen, i appreciate the spirited debate. have a gotvening. >>> coming up on "money," the world's most valuable brands are named. they may prove ideal forecaster for a company's stocprice. we'll tell you who is at top. >>> a top wall s

there was substantial privacy for the fdic. and my dean was reviewing my homework and i want to make sure i'm presentable and for minute order or for transfer of calendar. it will be an annual report and we will receive the information and make sure i have descents of

currently reviewing the proposed guidelines. >> i happen to be at right time, right place. >> both fdic and office of comptroller are taking public comment on the proposal until may 30th. we have a link and where you can leave your comments just go to abc 7 news.com. >> thank you. >> coming up next, a very big night for east bay 12-year-old. >> new video of the >>> breaking news in southern california. toon down is being evacuated because of a small explosion in a trash can. security told him it insolved dry ice but they're evacuating while they figure out what happened. disney is the parent company of abc 7. >> silicon valley experts are open new revelations chinese hackers gained access to top u.s. military information. the pentagon report found hackers compromised data innocence tiff systems included vital parts of the missile defenses fighter aircraft and warships. experts say military espionage moved into the digital age. >> in the old days the spy had to be here in the u.s. to do something damaging. now, they can do it from overseas so that presents a different picture. >> it pain

currently reviewing the proposed guidelines. >> i happen to be at right time, right place. >> both fdicice of comptroller are taking public comment on the proposal until may 30th. we have a link and where you can leave your comments just go to abc 7 news.com. >> thank you. >> coming up next, a very big night for east bay 12-year-old. >> new video of the boston bomb >>> breaking news in southern california. toon down is being evacuated because of a small explosion in a trash can. security told him it insolved dry ice but they're evacuating while they figure out what happened. disney is the parent company of abc 7. >> silicon valley experts are open new revelations chinese hackers gained access to top u.s. military information. the pentagon report found hackers compromised data innocence tiff systems included vital parts of the missile defenses fighter aircraft and warships. experts say military espionage moved into the digital age. >> in the old days the spy had to be here in the u.s. to do something damaging. now, they can do it from overseas so that presents a different picture. >> it

we also separate the safety net, if you will,"t fdic federal reserve safety net.ositors have across the country will be restricted to traditional bank activity. sort of the traditional banking that we know of, that we've done for many decades in this country but will no longer put them in these high risk derivatives and credit default activities that the wall did some of the more ricky behavior that wall street suggests. >> and senator, as ari mentioned, this bill has a lot of opposition among bankers. one of the community bankers that you alluded to who supports your bill is john who recently wrote in american banker that wall street executives and their lobbyists don't want higher capital ratios because of safer bank results in less leverage, lower return on equity and yes, lower bonus payouts. it seems to me like the purpose of requiring higher capital requirements is to sort of force them to be more responsible and take less risk. is there a way we can fundamentally shift the incentives that exist in the system so that there isn't such high reward for taking s

the former chair of the the fdic says congress has yet to fully step up and fix the problem of "too big to fail" - big banks believing they can take risks and then expect the government to bail them out. "we need better constraints on the amount of leverage big banks have to have to fund their loans and investments." sheila bair says one answer is a bi-partisan bill from senators sherrod brown and david vitter requiring banks with more than a half-trillion dollars in assets, such as jp morgan chase, citigroup, b of a and others, to hold capital reserves of 15% - a much higher standard than exists today. a hedge fund founder is using tough talk to keep employees in line. cnbc reports sac capital founder steve cohen told investors the hedge fund would impose compensation clawbacks on employees who break rules with stock trades. cohen says it's to "deter conduct that threatens the integrity of the firm." sac has been the subject of insider trading investigations. intel's new leader may switch things up a bit. company veteran brian krzanich takes on the ceo role in two weeks, after paul ote

however, the chair of the fdic says there are a few caveats. bank lending is down after rising for several quarters, and, due to lower interest rates, banks' profits are expected to drop going forward. meanwhile, across the pond, the european central bank is on alert because of new concerns over that region's banks. many borrowers are unable to repay loans, and those losses are weakening the already fragile banking sector. lending to both individuals and businesses has continued to decline, while an assessment by a european think tank details the need for banks to build up capital. the latest evaluations come as the ecb begins to supervise all europe's banks. in a move to appease the united states, swiss banks may become a little less secretive. u.s. authorities have been pushing the swiss government to allow its banks to reveal more information about american customers. those customers often bank in switzerland in order to avoid paying taxes. until now, banks were prohibited from revealing any such information. the swiss parliament will vote t

according to a report issued either fdic, concerns were raised by the office about the banks mortgage banking practices when you are were still chair of the bank's board. others have said that you have the banks audit committee until its failure. could you tell us the world you have played a leading up to the superior bank failure in 2001? >> senator, things were giving me the opportunity to tell the story. so my uncle and a friend of his bottoming in 1989. it was a failed bank. i was never involved in management. i was chairman of the board from 1991 until 1994 when the primary purpose or activity of the bank was to clean up the balance sheet of the bank, which had a lot of problem loans. i stepped down as chairman of the bank and the bank maintained its own separate thing before they fail. regulators concluded with certain assets on the balance sheet, but they were overvalued after a change in accounting rules. with a holding company one looks like the balance sheet and the financial statements. we deal with all the subsidiaries of the holding company. unfortunately, when the proble

according to the fdic, profits rose 16% from a year ago, more than $40 billion. sallie mae announced they will split into two publicly traded companies separating consumer banking from its student loan business. the split expected to be completed in the next year. nasdaq find $10 million for poor systems and decision-making during facebook 2012 ipo during which facebook lost millions of dollars. the bond market falling slightly 2.12%. my next guest says the rally inequities has come too far, too fast. joining us, former chief economist for bear stearns. good to have you with us. too far, too soon, but what a nice ride it has been, is it over? >> i do think this market has to mark sometime because we are up 16% this year even after the decline today. interest rates are so low, beginning to see the investment of interest rate as we have seen in the month of may, 10-year treasury yield has come up about half a percentage point. interest rates will give us a bit of a headwind and the market will have to pause for a while and i think that will be healthy. lou: we're s

. >> i have been for streamline agencies, i i -- occ, and partf the fdic could go together, i like dodd-frankes, but i still think we need to be regulated. i would like to find a better balance. neil: do you worry about the backlash this is yielding we're talk will to miller in alaska it prompted a backlash against government. >> i am concerned i am a pronent of national infrastructure bank. so, you know, on the flip side, i think fema has done a good job. neil: you have got to be kidding? >> wait, wther they came in during that severe storm, it was very nde where the money has gone to date, you can't -- >> i love you darlly but you are out on dearly but you are out to lunch to tha one. >> all right. neil: i kid you, robert, you are a good egg, and a good guy, but you should talk to the president aboutome of these basic issues, give him my best. >> i will everyone from fox. neil: robert, founder and ceo a good guy. faceok might be clien up its act, i want you to meet on-line type that is doubling down on dirty, but the site knows wt dirty, but the site knows wt it is, you ever won before copd

the fdic, here is your headline saying bank income in the first quarter hitting all time high. the analysts say the big banks have a lot to do with it. >> let's go to rick. i think the bond auction this year, we had $99 billion going off the board. yesterday you gave the grade a d. what about today? >> c plus. so we moved up a half a grade. listen, and the range was like a 102, 11 yield. exchanges tomorrow. above the 42%. maybe the best news is 32.5% went to dealers unlike yesterday. dealers got most of it. many will say average is good on a day where volatility and interest rates are center stage. back to you, sue. >> absolutely. perfect segue. stocks are selling off the yield on the ten-year treasury note. >> good to have you both here. mike, do you think there is a great rotation going on? or do you think we are premature with that? >> i think we're a little premature with calling a great rotation out of bonds and into equities. i think we have seen a little bit of a reset in the bond market. i think we are resetting to about the two, two and a half percent treasury yield. >

there has been too much talk from the fdic and others about the -- above closing down regulating lendinglending decreases, but there not going to do that. consequently, this market will go up and up, so you have an opportunity. the market reacted wrong, so yo can go in and buy stocks lower than you might have otherwise 3 and not argue set and how long time. then the question becomes for our viewers, should they fear that tapering of the fed easing that we have seen over the past one year plus? should a warrior not? >> no. investors should not worry abou this talk of easing. we are going to get bernanke a lot of credit. commodity prices have not moved up. he mentioned the fact that if there is some risk is inflation is too low, so the fed will not be tightening, and they will want banks to make loans perry and mortgage lending is to restrain. and sell the fed sees a big upside move in lending our grea economic data there not gone to do anything. liz: to slauson calendar closely . thank you. wayne angell, former federal reserve board goveenor saying reserve board goveenor saying the market

we did have the fdic. here was the headline saying bank income in the first quarter hit an all time high. you can see the banks bucking the trend and in the green here today. mandy, back to you. >> you are absolutely right. rick santelli is over on the beat. we saw the ten-year yield get up to 2.23%. how are we doing now? >> you saved about nine basis points off of that. i almost find it more fascinating that since may 1, which is the second day of the two-day fed meeting we had employment data and at that time it was around 162, 163. going back to april of 2012, which may be a negative sign as we have been talking about for funding of mortgages. it will correlate to the stee n steepening curve. one other issue, when we're all trying to look at interest rates, i keep coming back to this lumber chart. lumber has lost 30% of its value. and i think we need to think about why that is. is it bubbles created by the fed and i will kidliquidity? lumber is soft. >> all good questions you have thrown out there. >> w

the fdic out with the earnings release. hampton pearson has the details for us. hampton? >> hi.e fdi-insured institutions look like this. net income topping $43 billion in the first quarter, that's an all-time high. revenues up 5.5 billion or 15.8% from the first quarter of 2012, loan loss provisions falling to 11.3 bell on. a 23.3% decline from a year ago, the lowest since the first quarter of 2011 pre-dating the financial crisis and only four bank failures in the fourth quarter and that's the lowest since the second quarter of 2008 and down from 651 in the fourth quarter and it's the eighth consecutive quarter of the decline in the total number of problem banks and a far cry from back in 2011 when there were over 888 banks on that problem list. net operating revenue up just $171 billion, essentially flat, 1.6% year over year. the statement from the fdic chairman talks about this is aing future earnings of the industry increasingly will be determined by revenues. he also goes on to say tighter net interest margins create an innocecentive for institutions reach for yield which w

read you what the fdic had to say about this.ailure of superior bank, a bank that they were heavily involved was was attributable to the board of dectors and executive management ignoring sound, risk, diversification principles by excessive concentrations in assets related to sub prime lending. it seems to me we're loading up the cabinet here with people who would take us back to the future, back to the problems that got us into such an economic mess. >> well, now, you know how things go here. it's not been so long since your last visit that you know how things go here. gerri: not well from what i remember. >> not well. gerri: that's what i remember. >> other than in the bureau, we treat you well and hope you come back soon, but those guys, yeah, a little difficulty, and the truth is, if there is -- if there is thee most important political patron for president obama, it's penny. there's a lot of p's, but the truth is that she launched him, made him that fortune, created the possibility of a national political career for presiden

and so then, thereafter, i went to the fdic file interiorly and the family only 50% of the bank, but voluntarily went to the fdic -911, andthis was post i come from a family that is very patriotic, and i said to the head of the fdic, this country has been very good to our family and we need to make the situation right. we would like to negotiate something to make this right for the depositors. suedhat negotiation and and my family voluntarily agreed to pay $450 million. i was not on the audit trinity -- audit committee of the board. that is something that is not right, and it was the right thing for us to do, because both for the depositors and for us as a family. ,> let me follow up if i might mr. chairman, so ultimately there were a number of uninsured depositors who had claims they lost over a hundred thousand dollars of savings, including one who deposited her entire retirement account with superior a month before it failed. my question is, what do you have to say to those depositors who lost it can sums of money, because of this denture, and what lessons did you learn from your

the fdic realizes these organizations are so complex they really cannot orderly liquidation. they have decided you cannot orderly liquidate them. they have come up with a single point of entry. basically you attack that shareholders and creditors rightfully. one of the things we have been pursuing is making sure that there's enough long-term credit held at a holding company. we have not received a response, but i think -- i would love to hear your thoughts on that. obviously with people going to do is not at the holding company level. i just wonder if you address that issue. >> the owner of the liquidation authority that the single point of entry proves our ability to manage any future crises are problems that develop. i totally agree that there has to be adequate capital available in order for that to work. in general, raising capital standards has been a big part of the activity in a last couple of years. it is a combination of things, if you combine looking at capital, what the content of investment activities are, how much leverage there is. but the creation of a single p

there's no economic data, but the fdic releases its quarterly report on u.s.dent eric rosen again is in minnesota to talk about the economy at 1:00 p.m. the only earnings results of note is the retailer michael kors. >>> ten-year u.s. treasury yields have hit their highest levels in more than a year. dealers say selling has come mainly in the wake of questions that the federal reserve will soon taper off its quantitative easing program. conversely, promises by central banks in japan and europe to keep monetary easing on track also aided the treasuries sell-off. let's get to the publisher of "the bush update" and cnbc contributor. andy, we saw some improvements in consumer confidence, housing data, housing numbers improving as well. typically, this would have caused a sell-off in the equity market. we only saw the push-up, though, on the u.s. ten-year treasury yield. this is a market that has a mixed position of how to price in tapering? >> well, i think so, and i think that's the biggest risk, obviously, for the federal reserve, is how to message what they're

before this the securities and exchange commission looking at safeguarding this type of stuff and the fdica new entity that i guess will work along with these? i have no idea. is another the administrative mmx. >> i will give this to mercedes andron if they are willing to join the democrats to get rid of citizens united i will get rid of democrats contributing to the campaign neil: and the ira's targeting? >> that anyway but then i will go with unions. neill that is not a justification? >> absolutely not. neil: wish we had more time but that is a bombshell at the good of flood -- a the end of the discussion. we will continue to monitor the fallout from all of these scandals. we will see you then. . gerri: awaiting a statement from preside obama on any minute for the scandal of the irs just by dezhnev, it's the agency gave the liberal groups a pass and how much scrutiny was given too conservative toarty groups of this when the irs once more pow, emplees and a bigger budget. rich jensehas been following this story all week long and this is an extraordinary scandal that involves a white house

so expenses cannot be deducted from federal taxes and fdic-backed banks won't take their money. >> there'sit's a struggle trying to operate without a bank account, trying to run a business without being able to take deductions. >> at his dispensary, he operates in a highly competitive marketplace. about 500 medical marijuana dispensaries in colorado compete for the business of the 108,000 people on the medical marijuana registry. have they become more connoisseurs about their medical marijuana? >> definitely. you don't ever see "swag." it's all chronic, hydroponic. >> competition has driven prices down to half of what they were three years ago creating razor thin margins, but could that change when more people, even pot tourists from out of state are able to legally buy weed? gindy isn't so sure. >> there's arrests that come along with it. that might push the federal government into acting where they were not comfortable acting with medical marijuana. >> right. and i have to make that choice. >> these marijuana pioneers will probably never convince all their critics pot should be legal, bu

befo this the securities and exchange commission looking at safeguardi this type of stuff and the fdiccreated a new entity that i guess will work along with these? i have no idea. is another the administrative mmx. >> i will give this to mercedes andron if they are willing to join the democrats to get rid of citizens united i will get rid of democrats contributing to the campaign neil: and the ira's targeting? >> that anywaybut then i will go with unions. neill that is not a justification? >> absolutely not. neil: wish we had more time but that is a bombshell at the good oflood -- a the end of the discussion. we will continue to monitor the fallout. >> absolutely fantaic we will see you again. >> are you ready colonel? >> does america still have a true grit? space some why is taking a risk becoming illegal? and the that upsets the cowboy liberrian the idea you will retaliate can ban something is crazy. >> should this behavior be banned? it is time to toughen up this is it. >> these perdu engineers offended people because they are all white. is that offensive? at least some americans

i have a letter for you that i would like to summit for the record by the former chairman of the fdic, william isaac, that i think will help you, and say to my republicans -- >> that will be included. >> i will hope that this voice for business becomes our next commerce secretary. >> great. you two distinguished senators have a choice. you can listen to senator rockefeller and senator thune. we appreciate that offer. >> that is the correct answer. >> senator thune and i will give our opening remarks. and then what we will do is what we did yesterday, and that is other colleagues on both sides will not give opening remarks, but all question times will go for seven minutes, so you can do quite a lot with that. all right? >> yes, sir, mr. chairman. >> i would like to call this nomination hearing to order. it is an important one. we are meeting today to consider a distinguished nominee to be the next secretary of commerce. we have not had a strong secretary of commerce in quite a while. ms. pritzker's nomination comes at an important time during our nation's economic recovery. while we ha

three, a hybrid where there would be more limited guarantyaw, specific reinsurance actually like the fdic. have you seen that proposal question mark if you have, what did you think about it? myi have seen it and asked staff to do an analysis of it. we are in an ongoing process working through what the next steps should be, and we welcome the contributions. >> i would love to see your staff analysis of the concerns and issues of -- raised. it is very intriguing to me. i met with mr. milstein and his staff, he was here in front of the committee, and it seems to work out. basically option three, included in the treasury white paper a couple of years ago. >> the challenge as we go forward will be to strike the balance so we maintain access to mortgages, 30 year mortgages, and avoid having -- back in the place where they fell back on an implied guarantee created the financial crisis. ,> that was exactly his advice to be careful about the transition to where we are today. more than 90% of mortgages being federally insured, which is a really had situation. >> indirectly -- .> lastly last congres

hybrid where there would be more limited federal law, specific guaranty reinsurance actually like the fdic. have you seen that proposal? if you have, what did you think about it? >> i have seen it and asked my staff to do an analysis of it. we are in an ongoing process working through what the next steps should be, and we welcome the contributions. >> i would love to see your staff analysis of the concerns and issues raised. it is very intriguing to me. i met with mr. milstein and his staff, he was here in front of the committee, and it seems to work out. basically option three, included in the treasury white paper a couple of years ago. gothe challenge as we forward will be to strike the balance so we maintain access to mortgages, 30 year mortgages, and avoid having -- back in the place where they fell back on an implied guarantee created the financial crisis. >> that was exactly his advice, to be careful about the transition to where we are today. more than 90% of mortgages being federally insured, which is a really had situation. >> indirectly -- >> lastly. last congress, i sent a lette

if you have more than $100,000 in any one bank, the fdic only insures up to $100,000.o i, you know, we're going on a tangent, but i actually think that was a fair jut cooutcome. >> you do, okay. i want to get off of this tangent, but is this going to be a precedent for other economies? >> no, by all means. >> okay, that's important. so in terms of expecting a pullback, what is my mentality? is my mentality, as soon as i see a pullback, i need to get into the market, because i'm thinking the next 10 or 20 years? >> i know it's nice to think that way and i'm guilty of that, but if you're worried about your outcome, if there's a 1% or 2% or 5% pullback, it's not going to mean much to the end result. the key is, we need to change the dynamic thought process about long-term outcomes. the other big issue we have, maria, if you listen and read any behavior economist, they talk about most human beings actually are irrational in their investment decisions. we are so risk adverse. we get more -- we have more fear in losing money than the pleasure of making money. so that is a re

but you're seeing this shift over the last couple of months from the fdic and tom honag, basel's veryn the air. it hasn't been finalized, it's been proposed for a year, and now there's shifting going on about what basel's going to look like. so i think it's making investing in the group that much tougher, because of that regulatory uncertainty. brown/vitter is a sideshow. >> so it's the uncertainty? >> last week, i heard lloyd blankfein speak rather thoroughly about regulation. and he said, among other things, rather surprisingly to me, that regulation has always been here. and maybe he was just speaking because he knows who's listening, but he didn't feel that the level of regulation for specifically his company, goldman sachs, was all that much more onerous, franksly, yet, than it has been. so, paul, is that a legitimate point? >> it's not yet. >> you know, i think right now, it is a legitimate point, but i think what they're worried about is where they take it with the next step. the regulator's under a lot of political pressure from congressmen to tighten up the rules, tighten up

and frank will embrace an amendment to change the formula for fdic payments.n. >> so a billion and a half of money paid for the fdic shifts from small banks to big banks in return for neutrality. >> which is huge for barney. >> they stayed neutral. >> what do you think about that? is that good? is that the way we should be making law in america? >> there's a lot that's not good about the way we make laws in america. this is democracy. we make trades, compromises and pull it together. this is not new. it has been going on for years. >> he didn't tell us about that. >> look, cam did well by his people. he did what he was supposed to do. bob, let me cut to what i think is the overall theme here, which is as you read this book -- and it's very detailed but very readable. it's a great narrative. it's the death of bipartisanship. and it dies in this book. the old ways of the senate doing business dies in this story. but nobody seems to kill it. who are the antagonists in this story in europe? who are the ones who keep this from being a true bipartisan bill? >> it's

the orderly liquidation authority, fdic, the federal reserve is developing. taking the lead.irst time with a set of rules and a framework for safely winding down a distressed systemically important firm which, of course, is the essence him if you want to correct too big to fail you have to make impossible to fail, evidently. this is the first serious attempt to put together a way of really addressing how you would wind down a distressed systemically important firm. a lot to be done there. international coordination, but think progress is being made. and i would finally mention that too big to fail is in part a credibility issue on the part of the government's. the markets believe it notwithstanding what the rules might be that the government will, in fact, go through with its commitment to one down an institution. various laws in dodd-frank which led to some of the authorities that we had in the past. and on top of that the various measures that i strengthening the resilience of the financial system more generally light will -- derivatives rules and so one that would make it

tax, marijuana is still against federal law, so expenses cannot be deducted from federal taxes and fdicd banks won't take their money. >> there is nothing glamorous about this business. it's a struggle trying to operate without a bank account, trying to run a business without being able to take deductions. >> reporter: at his dispensary, he operates in a highly competitive market place. about 500 compete for the business of the 108,000 people on the medical marijuana registry. >> you don't ever see quote/unquote swag anymore. it's all chronic, all high row uponic. >> reporter: competition has driven prices down to half of what they were just three years ago, creating razor thin margins. but could that change when more people are able to legally buy weed? gindi isn't so sure. >> there is a risk that comes along with it. >> reporter: that might push the federal government into acting. >> right. and i have to make that choice. >> reporter: these marijuana pioneers will probably never convince all of their critics that pot should be legal, but they see themselves as the good guys. >> every

tax, marijuana is still against federal law so expenses cannot be deducted from federal taxes and fdic-backedt's a struggle trying to operate without a bank account, trying to run a business without being able to take deductions. >> reporter: gindi operates in a highly competitive marketplace, about 500 medical marijuana dispensaries in colorado compete for business. they become more convinoisseurs about their marijuana? >> definitely. you don't see a quote, unquote shrag. >> reporter: competition has driven prices to half of what they were three years ago creating razor-thin margins. could that change when people, even pot tourists from out of state, can legally buy weed? gindi isn't so sure. >> there's a risk that comes along with it. >> reporter: that might push the government to acting where they weren't willing to do so with medical marijuana. >> that's right. >> reporter: these marijuana pioneers will probably never convince all critics pot should be legal, but they see themselves as the good guys. >> every single person that works for me, when they clock in, they put a finger on a sens

tax, marijuana is still against federal law, so expenses cannot be deducted from federal taxes and fdic-backed >> there is nothing glamorous about this business. it's a struggle trying to operate without a bank account, trying to run a business without being able to take dedukctions. >> reporter: about 500 medical marijuana companies compete for the business. >> they become more connoisseurs about their marijuana? >> definitely. it is all chronic. >> reporter: competition has driven prices down to half of what they were three years ago, creating razor thin margins. could that change when more people, even pot tourists from out of state, are able to legally buy weed? gindy isn't so sure. >> there is a risk that comes along with it. >> that might push the federal government into acting where they were not comfortable acting with medical marijuana. >> right. and i need to make that choice. >> reporter: these pioneers will probably never convince all their critics that pot should be legal, but they see themselves as the good guys. >> every single person that comes here that works for me, when they

. >> and i've had this conversation with your predecessor, with the fdic, other regulators. serve on the banking committee, serve on this subcommittee. the suggestion that we take into account is one that is always offered in return to the dialogue or monologue that we just had, and the complaints continue. and so i'm happy to hear you pursue the certainty. please take into account the lack of systemic risk. i only have less than a half a minute left. i'm going to submit for the record a question to you and to acting commissioner miller, and it deals with this issue of the irs' inadvertent release of tax returns that appear to involve contributions to certain political organizations and the information that is released ends up in the hands of other kind of politically-oriented organizations. and i'm going to outline a number of instances where that has happened and ask you and the commissioner to explain what's going on at the irs, what's happening at the treasury department. how did these releases occur, what actions have you or the commissioner taken to make certain they d

. >> i have had this conversation with her predecessor with the fdic, the regulators on the banking committee the suggestion that we take into account is one that is always offered in return to the dialogue her mom while that we must have. i only have less than a half minute left. evening for the record, the acting commissioner. it deals with this issue of the irs and the inadvertent release of tax returns including the information that is released. i'm going to outline a number of instances where that has happened and asked you and the commissioner to explain what is going on what is happening at the treasury department, how do these releases occur, what actions have you or the commissioner taken to make sure that they don't happen in the future. including if the employees are culpable. this information may be used for political means and political outcomes. i will submit that for the record. but i am very interested in making certain that every american can know that their tax return is nothing that's going to become public. >> thank you very much madam chair. secretary, thank you for joini

you have leverage of 100 to one if the depositors is guaranteed by the fdic.bility to leverage up. they had special purpose vehicles and derivatives. and it's just tempting. that's phau freddie and fannie got in trouble. they were on a different mission. so anything the government is behind particularly, you need someone that can put their foot on the amount of leverage they have. >> the last time we spoke you said you were still buying wells fargo. >> that's right. >> are you continuing to do that? >> we bought wells fargo probably every month this career. >> moody, you're not buying. you have been selling. >> we sold some last week. >> there was a filing on that. are you going to keep selling that? drop down? >> i guess the obvious answer is i don't tell. if we sell we have to announce it as long as we have more than 10%. if we get to 10%, we don't have to announce it after that. >> so there would be an advantage to owning less than 10%. >> yeah. but we have done -- we're selling moody's what we paid for it. >> joe, i know you have a question too. >> more of

. >> we were fighting the change the fdic assessment formula because communities banks were hold ago disproposat share of the premium paid into the fund. >> there was no quid pro quo that you would that you would get for dodd frank if they would have changed the formula? >> there was no quid pro quo for neutrality or not neutrality on what became the dodd-frank act. remember, we're talking september '09. there were a dozen and a half different bills. there was not even a single reform bill at that point. there were a dozen 1/2 different financial bills working there way through the house. >> but you did get them to change that formula and you did not oppose what sthe didn't want you to oppose. >> we did not take a strong position against the inventorial cpfb. but overall on the bill, we did have serious concerns and we did protest on many, many provisions of that act. >> okay. we just -- the guy is trying to give us like this insight into what really goes on wind the scenes and i don't think anyone is that surprised and that's what you're supposed to do and i think lobbying is a righ

the orderly liquid aegz authority at the fdic and the federal reserve are developing.fdic take the leadus for the first time with aest is rules and framework for safely winding down a distressed systemically important firms which is the assetence. you have to make it impossible it fail, evidently ask this is the first serious attempt to addressing how you would wind down a distressed, incredibly important firm. i think progress is being made there, as well, and i would finally mention that too big to fail is partly a credibility issue on the mast of the government, that the government, will, in fact, go through with its commitment to find down an institution and various laws in dodd frank which limit some of the authorities that we had in the past, not -- and on top of that the various measure, like the derivatives rules and so on that would make it more plausible that the winding down of a financially systemic firm could be done without having major impact on the economy. so i just want to say that i do think that whatever you may think about the ultimate outcome that there are some im

you're seeing more discussion from several leaders in the federal reserve system from the fdic, tom andtoo big to fail. it is moving the forward. you had a bill put forward by senator brown, and senate democrat vitter. this is a train in motion to correct and simplify how we deal with too big to fail. so i do think dodd-frank went way too far. it's way too complicated. that's the number of hours it will take to deal with the regulation being put forward. and we're not finished yet. so there will be action on that front. the next step will be in june. we'll see how it goes from there. >> thank you. they're giving us more time. now talk about the subsidies that go to the top dozen banks at the expense of over 5,500 other banks. that subsidy is quantified by other wire houses, somewhere between 70 and $85 billion a year. do you agree with that? >> i don't know what the number is. the there are numbers all over the place. we have them for the bank. the bank of england has good work. the bloomberg number you just mentioned, there is a study now mandated by, again, senator brown and vitter to

effective implementation of basel iii but also in the cooperation that is key to implementing the fdic orderly liquidation authority under title ii of dodd-frank. i just want to talk about the revelations last week that the treasury inspector general's report. particular groups by the irs have grown and the ig report findings show that some employees at the irs exercise poor judgment and used inappropriate methods to determine if groups qualify for tax status are troubling. while these methods are unacceptable and troubling because all individuals and organizations should be treated fairly by the iras the reports stated the conduct was not specifically motivated and i commend president obama india secretary lew for taking swift action to restore public confidence to the irs and i hope while viruses taking these corrective measures it does not shy away from curtailing organizations to abuse their tax-exempt status. i have a specific example of mine when i raise this issue the father wants c-3 requires require states to be tax-exempt under 501(c)(3) of the internal revenue code. organiza

we're working with various partners to provide it such as the sec and the fdic with its money smart curriculum. we're also developing a library of information where we answer frequently-asked questions about issues in the financial market place. but consumers also need to be aware that there are few big moments in their lives where they will confront specific decisions with potentially far-reaching consequences such as paying for school or buying a home. do you go to school here or there? do you buy this house or that one? how much debt do you take on? what kind of debt and how do the alternatives differ? we want people to understand which decisions are the most important ones; not to treat them casually and to know where they can get trusted help when they need it. we've begun to develop modules to address these decision points beginning with our paying for college web tool available at consumerfinance.gov. and we're working with treasury and the department of education on a variety of these tools. today's finra report underscores the importance of these ongoing efforts. for example, it shows

. >> i will tell you i've had the conversation with your predecessor, the fdic and over regulators on the banking committee that serve on this committee of the suggestion that we take into account is one that is always offered and is returned to the dialogue or monologue that we just had come and the complaints continue. so i'm happy to hear you pursue the certainty. please take into account the systemic risks. i only have less than half a minute left. i'm going to submit for though record a question to you and the acting commissioner miller that deals with this issue of the irs inadvertently leaves of the tax returns that appear to involve contributions to certain political organizations and the information that is released and sat in the hands of other political oriented organizations and i'm going to outline a number of instances where that has happened and ask you and the commissioner to explain what's going on at the irs and what's happening at the treasury department and how these occur and what actions have you or the commissioner taken to make sure they don't happen in the fut