commenters are told us a clarification of the fdic's existing policies would be helpful. the second addressed new procedure that's eliminate or reduce the need for applications by institutions wishing to conduct permissible activities through certain subsidiaries subject to some limited documentation standards. this will significantly reduce application filings in the years ahead. the fdic takes a risk based approach which recognizes community banks are different than large banks and should not be treated the same. every fdic examiner is trained as a community bank examiner through a four-year program. each of them gains a thorough understanding. they live and work in the same communities served by the banks they examine ensuring they're knowledgeable and experienced in local issues important though those banks. institutions with lower risk profiles such as most community banks are subject to less supervisory attention than those with elevated risk profiles. for example well managed banks engaged in traditional noncomplex activities received periodic point and time safety

is this what we can expect in the future from the fdic? the question is are you are you going to open a bank today if you have those costs? >> that sounds like a large figure based on my experience. >> let me go to senator warner's comments about costs, and how they're not getting answers from small community banks. i tell you i'm getting answers from the small community banks, and i think you touched on it and that is personnel costs. small banks in nevada are being audited by the fed, no exceptions, clean books but then being required -- required to hire another compliance officer. >> where are we going to come up with the funds to pay another compliance officer even though we have no exceptions? i just want to ask one quick question on agrippa. will you consider the dodd/frank regulations during evaluation. >> given that the egrpra we do not feel it's appropriate to look at those rules at the time. >>> isn't it true we don't have another egrpra study in another ten years, if with you don't include doddself frank. >> we look as an ongoin

instead, though, the fdic stepped back and together you and the fdic asked for resubmissions in july. two questions, couple questions, two-part question, are you prepared to declare living will cemented during the next round of submissions not credible if they aren't and what actions will you take if the living wills are actually deemed insufficient? >> so we have worked as you mentioned closely with the fdic to give guidance to the largest firms on what we want to see, what changes we want to see in their living wills in order to improve their resolvability. there is significance changes that we've asked for. some pertain to their legal structure. the ability of critical operations that support an entire organization to remain available to the firm in the situation of distress, to simply fy and make sure that they have a holding company structure that would be functional to promote an orderly bankruptcy. we agreed with the fdic on what we want to see. we're working with the firms to make sure they understand what we expect. we expect to see resubmissions of these plans by july of 201

if the fdic was preclear about it. i would like to submit a copy of their comments for the record.comments, he said they provide no credible clear path through bankruptcy that does not require unrealistic assumptions or direct or indirect public support. and on and on pair in my time is running out to one simple question. you said earlier, you would give them a third try. we will not know the results of that third try forgive or take a year from now and maybe longer. if they do not meet your requirements on the third try, what you said -- i wrote it down here somewhere something along the lines that you would be upset or you would say, oh my goodness, if my mother or my teacher or might priest told me if you do those terrible things i will be very disappointed i do not need to tell you, it did not much matter. >> constant, i said we would find the plans we will find them to be not credible if we do not see progress. >> what is the practical -- >> if we find them not credible we belong with the fdic and would be in the position to impose additional capital and liquidity and other re

instead, the fdic stepped back and together, you and the fdic asked for re-submissions in july. a few questions -- a two-part question, are you prepared to declare living wills during this round of submissions not credible if in fact they are not? and what actions were you to get living wills are deemed insufficient? >> so, we have worked, as you mention, closely with the fdic to give guidance to the largest firms on what we want to see what changes we want to see in their living wells in order to improve their resolve ability. there are significant changes we have asked for, some pertain to their legal structure, the ability of critical operations that support an entire organization to confirm the situation of the stress to supply and make sure and hold the company structure that would be functional to promote early bankruptcy. we agreed with the fdic on what we want to see and we are working with the firms to make sure they understand what we expect. we expect to see we submissions of his plans by july 2015, july of this year. >> let me interrupt. are you willing -- are you un

created the fdic. >> i didn't think that was one of the choices. >> you've offended her. >> presidentxon was idolized by a teenager in what tv show? life goes on, wonder years, c -- >> she didn't have her hand behind her back. >> chris, one point. alisyn, two. 20 points for you. go back to your team. nicely done. [ cheers and applause ] >> all right. coming up next, don versus john. guys, come on down. john, don, come on down. >> can i just not do this? hi, everybody. [ cheers and applause ] >> all your questions will be about deaths. presidential deaths. hands behind the backs. make sure this is in the middle. 20 points. number one, a few days before his death, president lincoln was reportedly overheard reciting passages from his favorite, mcbeth, the merchant of venice, a fellow, the taming of the shrew. >> b. >> incorrect. >> a. >> that is correct. macbeth. president garfield's a sass tin reportedly chose his gun, .44 bulldog, because it spoke to him, he thought it would look good in a museum one day? >> i have no idea. >> b. >> that is incorrect. >> a, it fit in his pocket. >> a.

not sufficient, instead though the fdic step back and together you and the fdic ask for resubmissions in july. a couple of questions, two-part question. are you prepared to declare living wills submitted during the next round of submissions notyr credible, if in fact, they aren't. and what actions will you take if the living wills are actually deemed insufficient. >> so, we have worked, as you mentioned, closely with the fdic, to give guidance to the largest firms on what we want to see, what changes we want to see in their living wills in order to improve their resolve ability. there are significant changes that we've asked for. some pertain to their legal structure, the ability of crit ral operations -- critical operations that support an entire organization to remain available to the firm in a situation of distress, to simplify and make sure that they have a holding company structure that would be functional to promote an orderly bankruptcy. we agreed with the fdic on what we want to see. we are working with the firms to make sure that they understand what we expect. we expect to s

and it would be a much more stable currency if it were backed the same way as the banks with the fdicr hand, that is the way it is created outside of the autonomy of the banks and the currency. and so we will have to see if the lawmakers and the banks can be appeased. but on a broader view, what is the future of the bitcoin look like. meet the world's newest energy superpower. surprised? in fact, america is now the world's number one natural gas producer... and we could soon become number one in oil. because hydraulic fracturing technology is safely recovering lots more oil and natural gas. supporting millions of new jobs. billions in tax revenue... and a new century of american energy security. the new energy superpower? it's red, white and blue. log on to learn more. hi, this is jennifer, i will be out of the office until monday, and won't be checking voicemail during this time. i'll reply just as soon as i get back to work. sail with princess cruises, the number one cruise line in alaska. save up to $500 during our 50th anniversary sale. call your travel consultant or 1-800-princes

regulation would make it a much more stable currency if it was backed the by the fdic.ther hand, that's why it was created. we'll have to wait and see if lawmakers and bitcoin holders can be apieced. hey, i heard you guys can help me with frog protection? sure, we help with fraud protection. if there are unauthorized purchases on your discover card, you're never held responsible. you are saying "frog protection"? fraud. fro-g. frau-d. i think we're on the same page. at discover, we treat you like you'd treat you. fraud protection. get it at discover.com is it crazy that your soccer trophy hey, girl. is talking to you right now? it kinda is. it's as crazy as you not rolling over your old 401k. cue the horns... just harness the confidence it took you to win me and call td ameritrade's rollover consultants. they'll help with the hassle by guiding you through the whole process step by step. and they'll even call your old provider. it's easy. even she could do it. whatever, janet. for all the confidence you need td ameritrade. you got this. i'd like to put in my 15-years not

speakers include author francis fukuyama and former fdic banking regulator sheila bair. this is about an hour. [inaudible conversations] >> well, hello and welcome back. i'm michael rich, i'm president and ceo of the rand corporation. the focus of the last session of course, was the middle east foreign policy more generally there also. the middle east, of course, is a region several hundred million people hardly any democracies in that region. in fact authoritarian states, teetering states vanishing states an increasing amount of ungoverned territories. in this hour we're going to shift our focus to places that on the surface seem stable, secure, even prosperous, but the question is are they? and will they be up to the challenges of the new century? it's an appropriate time, of course, to take a up questions like this. it's the 25th anniversary i think, this month or this week of the opening of the berlin wall. this year, 25th anniversary of the proit'ses the democracy protests in tiananmen square. in fact, 1989 there was a wave of democratic transitions beginning in eas

speakers include former fdic banking regulator sheila bear. this is about an hour. >> well, hello and welcome back. i'm michael rich. i'm president and c.e.o. of the rand corporation. the focus of the last session, of course, was the middle east foreign policy more generally there also. the middle east, of course, is a region several hundred million people, hardly any democracies in that region. in fact, authoritarian states, teetering states, vanishing states, an increasing amount of ungoverned territories, in this hour we'll shift our focus to places on the surface that seems stable secure, and even prosperous, but the question is are they and will they be up to the challenges of the new century. it's an appropriate time of course, to take up questions like this. it's the 25th anniversary this month or this week of the opening of the berlin wall, this year, 25th anniversary of the protests or democracy protests in tiananmen square. in 1989 there was a wave of democratic transitions beginning in eastern europe obviously, asia and even africa.

and explain to people what you are doing, that helps with staff morale and we have people that the fdic, i don't think anybody in crisis the folks that identify with the service we are providing and want to be part of that but again you need to have -- you are never going to be in the financial service, you never see that compensation. but i didn't want people like that looking for multimillion-dollar salaries for the fdic because to make money going for right way, that is not what you want to drive the folks in the agency, you want some paid fairly but hopefully serve a higher purpose, they are joining in and do good job for you. >> i was just going to make a comment. 25 years ago when the wall fell in berlin, as you say the end of history and other important things, 25 years ago who would have predicted that today you would have more countries that have become autocracies as opposed to democracy is in essence. >> that is not true. >> in terms of a large country is becoming -- russia turkey, india. >> germany was a military dictatorship back then. >> in terms of governance they have be

many members of the public wrote to the fdic and the federal reserve expressing frustration that theng wills have been disappointing. specifically, the lack of public information makes it difficult for members of the public to assess the progress that firms and regulators have made on achieving the goals of dodd/frank, which is to reduce the complexity of the world's most significant financial institutions and allow them to be resolved under ordinary bankruptcy proceedings without endangering the broader economy. in an august 2014 press release, the fed noted that both they and the fdic will be working with large banks to explore ways to enhance public transparency of future planned submissions. i wonder if you can, to elaborate on this commitment. what additional information does the fed plan on releasing to the public so that we can know whether or not you are doing what we intended in wall street reform and each -- if each living will is thousands of pages long, does the punblic have any transparency if the fed is releasing 30 or so pages of the plan. >> what i'm concerned about,

we had, it was incredible the people at the fdic. folks did identify with the service we were providing and wanted to be a part of that. again stature is the only thing you can compete with especially in financial services. you will never be able to compete on a compensation basis. frankly i don't want people looking for multi-million dollar salaries working at the fda. that's fine go make money feud with the right way but that's not what you want to drive the person you have working for a government agency. you want them paid fairly but hopefully a higher purpose and why they are joining in and they will do a good job. >> please nicolas. >> i was listening to the comment and frank may agree with me but 25 years ago when the walls fell in berlin and after the end of history and other important papers and books 25 years ago it would you have predicted that today you would have more countries that have done -- become plutocracy's innocence? i mean in terms of the large countries becoming like russia, turkey india. >> it was a military

>> it moves to the fdic insured account you can have access to any time and with a back to your checkingo earn interest on my savings? >> today they don't pay interest but we will as we continue to grow the member base to have a little more leverage with the banks that we work with. gerri: you want to give me no interest but take my money? that seems like a bad deal. >> so people are now beginning to save to begin with. gerri: so why penalize those who do? >> we're not penalizing them having $100 set aside at the end of the month you might not have had otherwise is more important than the $0.2 you would in the current interest-rate environment. gerri: remaking money off my money? because you were making money on my money. >> it is a completely free service. gerri: but you were making money off my money i a get nothing and has to be happy at all pay for the application? >> i saved but i make money on my many. >> but i don't thank you are the target market for digit. gerri: as with his young people that are not saving the you are going after hoping that there will be happy that you can mak

caller: i wouldn't have an explanation as to why in the budget they put in fdic has to cover everything the banks are doing. they complain about the deficit, but that is going to raise the deficit even more by another bailout. and all they want to do is cut the social security disability by 20% next year? everything for this country is just going to the corporations and not the people. host: thank you, john. guest: i mean, i would say there is a growing sentiment on both the right and the left that the government is doing too much now to help corporations, and i think that actually is an area of agreement where potentially the right and left could get together on ending corporate welfare. host: the book is called "overcoming obamacare," and the opinions of philip klein, who is with the "washington examiner." thank you very much for being with us on this sunday. we appreciate it. >> from the next washington journal, we focus on the 2016 budget west english tomorrow. we will hear from john delaney a member of an angel services and economic committee. congressman tom rice, a member of the

here, the fdic has closed hundreds of banks. that is a key reason the economy bounced back.as this strength of a dis-aggregated system. you have the credit unions and you have these liquid credit markets. the banks here are only 85% of u.s. gdp. there is a reliance in europe. brendan: i will go out now and by you and american flag lapel pin. there has been diverted in the way the stress test was received. david: in previous years -- the exercise that happened last year was -- the asset quality, the stress test and then in october they took over single supervision of the banks. the banks seem to be ok now. if you look at credit standards, they are the easiest terms since 2006. if you look at credit demand, the service is strong there as well. there is a new credit cycle this year. brendan: i realize i'm asking the fox about the henhouse. we have this disaggregated regulatory approach in the u.s. we have the treasury, is that a feature or a bug? jim: i would agree with david that it is the diversification of the industry. the fact that you have competition. that raises all boa

the fdic seeing position to the plant oils as a nation's largest banks not sufficient instead they step back and together you asked for re- submissions of july. i have a couple of questions. i you prepared to declare a living we will submit is not credible, and what actions we will you take if they are deemed insufficient? >> we have worked closely to give guidance in order to there original. they're are significant changes have asked for some pertaining to the legal structure of critical operations that support an entire organization to remain available to the firm in the situation of distress to simplify and make sure that they have a holding company structure that would be functional promote an orderly bankruptcy. we are working with the firms 1st make sure they can you expect. we we expect to see the submissions of these plans by july to july of this year >> are you unwilling to accept any of these? you have given us enough information on what to do to comply. >> and if we don't see the progress we expect we are fully declared to declare living wills to be not credible. >> good to h

under fdic devil in addition, what peril sen percentage of community banks are you should ant 10 billion$10 billion: >> how many under a billion? >> sounds like a consent to me. >>> >> there are a lot of bills out there that have been circumvented. and here's an example. under current law, banks with less than $10 billion in assets are completely exempted. >> would that bill benefit any ooft other ten community banks in also sets? i'll take that as a no. given that the bnks direct li pete with the community banks. wouldn't a bill that raises the don sumger 237b8 protection window fresh holgds to 50 billon dlaurs. >>. >>> i just thrill that six years ago, we suffered through the worse fblg rye sis in jeb rations. >> it is pompblt that our community banks and unions thrive. but raling back important protections to help the bigger banks just helps put community banks at a greater disadd van fang. the roll backs is covered before their special roll backs that. 's what nee eve been doing before the crisis and after the crisis. we should blt fall for that trick. thank you, mr. chairman. >> mr.

they had to hire new back-office staff which is very hard when you are a $100 million bank, but the fdict the way they see the problem. the real problem they think is one slow growth in new loans. two -- low interest rates that makes it hard for low banks to prosper, so this is not just a regulatory story, right? governor keating: the reality is the economy at large ought to move at the same speed. large middle sized banks, small banks, the fact is the qualified mortgage rule says there has to be a 43% debt to income ratio. it is a fence line lending product. when i bought my first house at 27, and by the way, it is 37 today because of student loan debt and also the rigidity of mortgage finance, when i bought that home i was offered various options for stop have your dad cosign the note. have the owner/seller, which he did do collateralized the first $500,000. today that is not a loan therefore the load is not made. that is not good. tom: i'm fascinated how you represent jamie dimon or mr. moynahan over at bank of america and you also represent the bank of oklahoma. have you ever seen ba

your agency, along with treasury, the fed, the fdic, and hud, like most charts it is somewhat difficult to read but on the horizontal access, this is the loan to value ratio. when the vertical axis is default rate and on the far right-hand corner you see a precipitous rise in full rates when you go from 90% loan to value, in particular, an incredible slope of 95% when we reach no downpayment whatsoever. this is information coming from your agency. so doesn't that indicate that again, a 3% down payment, you are once again putting people into homes they cannot afford to keep. you have previously testified when you were on this side of the witness table i have always believed you cannot make a loan to somebody who cannot afford to repay it. this is data from your agency and others. why is this sustainable? >> i have not changed my position on that and i want to a short this committee that i have not changed my position. you should never make a loan to somebody you cannot anticipate would pay it. >> this is data from your agency. >> when you make a payment as saved him which is what we have

chye-ching huang, if you can tell us about the fdic expansion set to expire in 2016 and why we need toay attention to that. >> unless policymakers act at the end of 2173 key provisions of the eitc will expire which means millions of families will face a loss of some or all of there credit and push more than 16 million people, working families into poverty. this is a big deal. again, going back to the story what that means if you think about a single mother with two children working full-time at minimum wage earning $14,500 she would face a loss of her entire child credit losing 1,000 $725. that that is an important amount to people who are struggling to get by. making those critical provisions permanent a critical priority for this congress. news in the house that their is an effort to make some expiring tax breaks permanent, including tax breaks for corporations. without getting into the merits of those they think that if anything gets made permanent these credits for working families must go with them. >> does anyone have anything to add to that? >> that number, 14,500, they must 500

your agency, frankly, along with treasury, the fed, fdic, sec and hud, i know like most charts it is somewhat difficult to read, but on the horizontal axis, this is loan to value ratio, on the vertical axis is default rate. and to the far right-hand corner you see a precipitous rise in default rates when you go from 90% loan to value. and particularly an incredible slope from 95% as we reach no down payment whatsoever. again, this is information that is coming from your agency along with just about every other prudential banking and housing regulator. so doesn't that seem to indicate that, again, a 3% down payment, not only is it not too good for the taxpayer you're putting people into homes that they can't afford to keep. and you have previously testified when you were on this side of the witness table during the dodd frank proceedings, quote, so i've always believed you cannot make a loan to somebody who cannot afford to repay it. that's unsustainable. this is data from your agency and others. so why is it sustainable? >> mr. chairman i haven't changed my position on that. and i wa

>> you don't like to see a bank that size being taken over by the fdic.mstances here. for me as somebody who rates financials, it's a big story. >> what do you think? >> i have been spending a lot of time looking back at 2000 because we're getting close to that 5k on the nasdaq. what's interesting when you look back at the press at that time everyone expected there would be a correction. so what we hear now is well, everyone expects a correction so, therefore, it won't happen. everyone is skeptical, so, therefore, it won't happen. everyone did expect it but there was that sort of euphoria that feels similar now, even with the levels being the same. >> it was true even in the housing crisis. there were plenty of people who never thought housing prices would drop but as soon as it started to happen it was basically watching a slow-motion train wreck. >> absolutely. i think the market saw what it expected to see from the fed this week which is why you saw the market trading sort of sideways through the end of the week. the vice chairman's comments from a few

caller: i wouldn't have an expedition as to why in the budget they put in fdic has to cover everythinghe banks are doing. they complain about the deficit but that is going to raise the deficit even more by another bailout. and all they want to do is cut the social security disability by 20% next year? everything for this country is just going to the corporations and not the people. host: thank you, john. guest: i mean, i would say there is a growing sentiment on both the right and the left that the government is doing too much now to help corporations and i think that actually is an area of agreement where potentially the right and left could get together on ending corporate welfare. host: the book is called "overcoming obamacare," and the opinions of philip klein, who is with the "washington examiner." thank you very much for being with us on this sunday. we appreciate it. we are going to turn our attention to organize labor and the head of the afl-cio, richard trumka, will be here to take your calls and comments. later, a change in leadership for saudi arabia. what is next for u.s.-s