still ahead, we will talk with the former fdic chair sheila bair. banking system navigate the financial crisis in the united states, now president of washington college. she has taken on the issue of student debt. ♪ hey how's it going, hotcakes? hotcakes. this place has hotcakes. so why aren't they selling like hotcakes? with comcast business internet and wifi pro, they could be. just add a customized message to your wifi pro splash page and you'll reach your customers where their eyes are already - on their devices. order up. it's more than just wifi, it can help grow your business. you don't see that every day. introducing wifi pro, wifi that helps grow your business. comcast business. built for business. when it comes to the fithings you love,. you want more. love romance? get lost in every embrace. into sports? follow every pitch, every play and every win. change the way you experience tv with x1 from xfinity. world headquarters in new york, i am vonnie quinn in for betty liu. mark: i am mark arkin. you are watching bloomberg markets. dutch mark

and working jointly, close with the fdic, firms have made a great deal of progress with their living wills. we're in the process of evaluating the most recent submissions. and working with the fdic, i think potential techniques that could be used in the event of a failure of a significant financial institution, we've also made a lot of progress there. i think i was at the meeting of financial regulators with the president when he made those comments, and i understood that what he was trying to tell the american people that they should understand they really has been very substantial progress, and that's something they should be aware of. >> sorry, but do you think that despite all the progress that, why hasn't that message, why haven't these improvements made its way to the public? and perhaps, like do you find that that is an obstacle either among people that you meet, people in the public order the representatives in congress that maybe have this pervasive view that nothing has changed? is that an obstacle? is that a problem? >> i think it's our job as we make these improvements to

hinojosa: according to the fdic, nearly 50 million -- fdic, nearly 50 million americans are unbanked or underbanked. consumers sometimes need access to at least $100 or less to smooth the transition between paychecks when their balance is low, so they can still purchase medicines and groceries and other necessities. q.m.rules affected mortgage -- how have the q.m. rules affected mortgage lending by community financial institutions? mr. cordray: so this is important because i often see facts alleged that are not accurate. in this area. the share of the market of mortgage lending by consumer bank -- community banks and credit unions has grown since dodd-frank was enacted. it is larger now. it is larger now than it was in large banks in particular. this is exactly the point that i think mr. meeks just made, which is that if you have evenhanded, sensible regulation of a market, the more responsible actors should be able to thrive because they're freed from unfair competition by the bottom feeding, law violating actors, many of which came into the mortgage market in the middle part of the

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 7, 2013, a decision memorandum was prepared you saw i'm not sure this but it has the operative phrase, staff is in a dialogue with both the federal reserve board and fdic. it begs the question, what does this have to do with a potential violation of eoca? now i'm also led to believe -- did you receive this memo? do you know? mr. cordray: i do not know. mr. hensarling: go to the next slide, please. what is also interesting is that the last sentence of the previous slide was deleted. instead we have somebody with the initials of p.a.f., perhaps patrice fixland, saying let's refrain from this discussion and instead, quote from the securities filing which seems to me that either senior staff attempted to cover up the discussions or they tried to withhold this information from you. did senior

that organization is suing the fdic, the federal reserve, and the office of the controller of the currency, over their part in operation choke point. >> we're challenging what is an enmass assault, really, on the pay day lending industry itself in an effort to destroy it >>> carl frish who runs allied progress based in washington, says the pay day loan industry fought back against choke point by using biggest weapons at its december possessal, money and access to politicians >> they paid congress thousands of dollars to hinder the government's ability to hold them accountable >>> allied progress says in this report that money from the pay day loan industry almost $650,000 was donated to 12 members of the house financial services committee between 2011 and 2015. the report suggests that the money was given to the congress men in exchange for sponsoring legislation to force the department of justice to shut up operation choke point down. >> congress man from missouri started taking in thousands of dollars from pay day lenders. he sponsored legislation that would end operation choke point. th

and working jointly, closely with the fdic, firms have made a great deal of progress. process ofhe evaluating the most recent submissions. working with the fdic, i think potential techniques that could be used in the event of a failure of a significant financial institution, we also made a lot of progress there. i think i was at the meeting of the financial regulators when the president made those comments. i understood that what he was try to tell the american people is that they need to understand there really has been substantial progress and that's something they should be aware of. the you think, despite all that progress, why haven't these improvements made their way to the public? do you find that is an obstacle either among people that you meet, people in the public, or their representatives in congress, that perhaps have those points of view that nothing has changed? is that an obstacle? is that a problem? think itir yellen: i is our job to explain what we are doing and educate the public about what's happened. they may not understand how much has changed. it

isn't it true that the senior staff were in discussions with both the federal reserve and the fdic on how cfpb's determination of an ecoa violation could adversely impact their application, is that true? >> we had no decision making authority over those other matters. we were simply attempting to conclude our investigation and get -- >> the question is, were they in discussion? was senior staff of the fair lending division in the cfpb in discussion with both the federal reserve and the fdic regarding this application. >> i believe there were some consultations about them wanting to know if we -- >> okay, you say consultation. we say discussion. we pull up slide number 6, please. >> i believe on october 7, 2013, a decision memorandum was prepared for you there was a dialogue with the federal reserve board and the ffdic. what does this have to do with a potential describe lags of ecoa? did you receive this memo, do you know? >> i do not know. >> go to the next slide, please. what's also interesting is that the last sentence of the previous menu -- the previous slide was deleted. and ins

it would provide loss absorption in that event, and working jointly, closely with the fdic, firms have made a great deal of progress with their living wills. we're in the process of evaluating the most recent submissions and working with the fdic, i think potential techniques that could be used in the event of a failure of significant financial institution. we've also made a lot of progress there. and i think i was at the meeting of financial regulators with the president when he made those comments, and i understood that what he was trying to tell the american people that they should understand there really has been very substantial progress, and that's something they should be aware of. >> follow-up really quick. but do you think that despite all that progress, why hasn't that message or why haven't these improvements made its way to the public, and perhaps like, do you find that is an obstacle either among people that you meet, people in the public or the representatives in congress that maybe have the pervasive view that nothing has changed? is that an obstacle? is that a problem?

isn't it true that the senior staff were in discussions with both the federal reserve and the fdic on how cfpb's determination of an ecoa violation could adversely impact their application, is that true? >> we had no decision making authority over those other matters. we were simply attempting to conclude our investigation and get -- >> the question is, were they in discussion? was senior staff of the fair lending division in the cfpb in discussion with both the federal reserve and the fdic regarding this application. >> i believe there were some consultations about them wanting to know if we -- >> okay, you say consultation. we say discussion. we pull up slide number 6, please. >> i believe on october 7, 2013, a decision memorandum was prepared for you there was a dialogue with the federal reserve board and the ffdic. what does this have to do with a potential describe lags of ecoa? did you receive this memo, do you know? >> i do not know. >> go to the next slide, please. what's also interesting is that the last sentence of the previous menu -- the previous slide was deleted. and ins

about the fdic and the justice department reads a very vague law about -- regulation about protecting the reputation of the banking industry. >> host: tell what reputation risk was originally. >> guest: the idea originally was you didn't want banks republicanning their reputation in a way that would harm the system. the whole idea is to protect the stability of the financial system. so part of that might be what if these banks start lending to industries which are very high risk and so people might doubt whether the banks are actually financially stable. that i'm not sure even something the government should be regulating. then the government, through this -- i think interpretation that doesn't really have any grounding in whatever congress wanted to do, says, we can stop banks from regulating to industries which we think have bad reputations, like gun sales, tobacco sales, local coin dealers. >> guest: in other words, the depositor is the bad person and ruining the bank's reputation. >> guest: yes, but borrowing money from them. reputation is the standard, it gives the regulators the

fdic money smart workshops are open to students, parents and community members.re going to take place at 18 public schoolings across the city. they're designed to educate the public about checking and saving accounts obtaining credit and consumer rights. >> dogs of all shapes and sizes are strutting their stuff in wildwood. the boardwalk kennel club all breed dog show is in full swing at the convention center. started today. runs through sunday. so you have plenty of time to see those pups in action. >> all right. back to your fox 29 weather authority now. the spring chill kind of continues. can we look forward to any relief soon, of course. >> chief meteorologist scott williams has got your forecast in just 15 seconds. >>> it was start this morning across the area. temperatures 30s and 20s but get ready for some 70s for high temperatures over the next couple of days. but it's not going to last long because some colder air will be moving in with that seven day forecast. still a little windy right now as you step outdoors but the wind direction is more out of the

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 7, 2013, a decision memorandum was prepared for you, i'm not sure you saw this but it has the operative phrase, staff is in a dialogue with both the federal reserve board and fdic. it begs the question, what does this have to do with a potential violation of eoca? now i'm also led to believe -- did you receive this memo? do you know? mr. cordray: i do not know. mr. hensarling: go to the next slide, please. what is also interesting is that the last sentence of the previous slide was deleted. instead we have somebody with the initials of p.a.f., perhaps patrice fickland, saying let's refrain from this discussion and instead, quote from the securities filing which seems to me that either senior staff attempted to cover up the discussions or they tried to withhold this information from you. d

. >> 11 under arrest in stark county is part of aa drug trafficking ring, fdic's 10 guns 10 guns, cocaine when every 5 pounds of marijuana, math and $1,000 cash six local police departments took part in the six-month investigation . responsible foror vandalizing the house dozens of times, jason kozan of euclid facing felony vandalism charges that he made the house more than a hundred timesmo the owner said the vandalism would wake him up in the middle of the night,d the bond has been set at $2,000. >> surveillance cameras catch a smash and grab c in process at a gas station, as jack shea has the video. >> the two men used a stolen minivan to crash through a door at the gasway carryout on memphis avenue on click the plus 30:00 a.m. wednesday,k kerry showed camera showed the suspect related to the storm they had case before the break-in , the grabbed 18 woodshed which i did not loose by the impact of the outside . cleveland has been hit by a rash of smash and grabs in the past couple yearsra and this >> the owners of the store employees not happy to see the >> river, surprise, it was all mo

true that senior staff in the office of fair lending were in discussion in the federal reserve and fdic on how cfpb's determination of an ecoa violation could adversely impact their application? is that true? >> we had no decision making authority over the other matters. we were attempting to conclude our investigation and get -- >> the question is, were they in discussion? was senior staff of the fair lending division of the cfpb in discussion with both the federal reserve and the c -- and the fdic regarding this application? >> i believe there were some consultations about them wanting to know if we were completing this investigation. >> you say consultation. we saw discussion. can we pull up slide number six, please? i believe on october 7, 2013, a decision memorandum was prepared for you. i'm not sure you saw this. but it has the operative phrase, staff is in a dialogue with both the federal reserve board and the fdic. it begs the question, what does this have to do with a potential violation of eoca? i'm also led to believe -- did you receive this memo, mr. cordray, do you know? >>

but first the list of these bad organizations because let there be any doubt to the of messaging the fdic published a list of high-risk industries. lottery sales, the coin dealers i represented a coin dealer before in the ira's. and the people were so nice they were mom-and-pop it required them to spend $5 worth of paper work to sell the dineley had to get that change but pharmaceutical sales and that paid a loans. >> it is the disturbing about this there is no statute that congress ever passed going after these different businesses they could probably be and that of existence if it wanted but it hasn't. >> that fits dodd/frank perfectly. >> generally the criminal law to extinguish ago whole brand unless it clearly says so what is says to the administrators in cahoots with the other agencies in the justice department with the very vague lot of protecting that regulation. >> originally they did not want the banks to risk their reputations and to harm the financial system so part of that is what is the bakes' start lending to the industries that our high risk so they would doubt if they sho

we are working with the fdic, and there are potential techniques that could be used in the event of a failure of a significant financial institution. we have also made a lot of progress there. i was at the meeting of financial regulators with the president, when he made those comments. i understood what he was trying to tell the american people, that they should understand who really has been -- there really has been very substantial progress, and that is something they should be aware of. >> but do you think that despite all that progress, why hasn't that message, or why haven't these improvements made its way to the public? and perhaps, do you find that is an obstacle, either among people that you meet, people in the public, or their representatives in congress that maybe have a pervasive view that nothing has changed? is that a problem? chair yellen: i think it is our job as we make these improvements, to explain what we are doing, and to try to educate the public about what happened, and they may not understand how much has changed. it is certainly part of my own responsibility to

again if you look at the fdic and i call that living near the edge. >> you make a compelling case tothe planet not trading on their asset value. all you're saying is break it up and the parts are worth a whole. my solution is don't break it up. break up the regulators because what they do is throw barrier after barrier at these companies and that's hurt frankly the market. it's hurt businesses. it's hurt growth. that's the real issue. >> i'm sorry that the facts simply don't surveillance pourt your prejudice about regulation because, in fact, banking is doing better. especially community banking. >> i'm not talking about community banking. first of all, how often are you involved in the markets? are you trying to trade any asset class? if you are you'll find there's no liquidity. and the rail. >> i'm not saying a policy. i'm saying financial markets. ly widty. it's very important to markets because it creates confidence and people and corporation and the speech. >> at first, i like what bart is doing by the way. with regard to and the market to say were in a case of citigroup or bank

two years ago, the department of justice and the fdic fined the company $100 million for breaking the law, and overcharging our active duty military on their student loans. but in the department of education didn't take any action against navion. instead of following up on the lead of the justice department and using the justice department's evidence, no, the department of education announced its own separate review of whether soldiers were harmed. a year later, they released their results, and navion -- notwithstanding the fact that navion was already sending checks to thousands of service members under the d.o.j. and fdic agreement, the department of education student loan bank concluded that everything was just fine. and that the department had no need to impose any additional fines or restrictions on navion. in fact, things were so fine that the department's bank rewarded navient by renewing a a $100 million contract. now, if that sounds stinky to you, it should. the department's inspector general took a good look at what was going on over at the bank, and two weeks ago they relea

a warning from the occ and fdic about leveraged lending and oil and gas is part of the share nationalew. the warning signs are very clear. they put them out there. what's really disconcerting to me is -- and the fed was part of shared national credit review, you have seen no mention in any fed statement since the issue was warranted about the recession going on in the u.s. or the industrial recession. even if we do see a bump in the month of march, where we do expect it to be about 50, it could still just be a dead cat bounce because of seasonal factors. what about the housing market? we do still see some -- support there. that doesn't give you some optimism? jason: the level we are at right now is more equivalent to the trough of the recycle since 1950, chapter 2001. we are still at recession levels for housing starts. this ayou were calling sleepy monday, but not according to jason. seconds -- 10 seconds left, when does this happen? a modest recession, 1.5% for the year. jason, thank you so much. his book is high up on the amazon list, it's called "recession proof." david: a reminde

it would provide loss absorption in that event and working jointly closely with the fdic, firms have made a great deal of progress with their living will wills. we are in the process of evaluating the most recent submissions. and i think potential techniques that could be used in the event of a failure significant financial institution. we have also made a lot of progress there. i think i was at the meeting of financial regulators with the president when he made those comments, and i understood that what he was trying to tell the american people, that they should understand there really has been very substantial progress, and that's something they should be aware of. >>> but do you think that despite all that progress, why hasn't that message or why haven't they improvements made its way to the public? perhaps do you find that that is an obstacle either among people that you meet? people in the public or representatives in congress that maybe have this pervasive view that nothing has changed? is that an obstacle? is that a problem? >> well, i think it's our job as we make these impro

instead what happens is the administrators, fdic infused with other agencies, ultimately the justice department with the very vague law and regulation about protecting the reputation of the banking industry. host hotel at reputation risk was originally. >> guest: and originally was you didn't want to risk and reputation in a way that might harm the stability of the financial system to colitis to protect the stability of the financial system. part of that might be what if the banks start lending to industries which are very high risk and so people might doubt whether the banks are financially stable. that's not something i'm sure they should be regulated. even if it is, the government through this interpretation that doesn't really have any grounding in whatever congress wanted to do since they can not dance to regulating industries which we can't have bad reputations like gun sales, tobacco sales. >> host: and then there was the depositor burning the bank's reputation. >> guest: yes, by borrowing money. you can see reputation as a standard and it gives the regulators the freedom to p

there are those who believe the federal reserve and fdic will grade on a curve, meaning some will failon them to restructure. jonathan: it seems a lot of banks are wanting to sell assets of the same time. who will buy them? rodgin: by definition, if you are selling lots of assets, you need relatively large banks to buy them. small banks cannot by huge amounts of assets. -- cannot by huge amounts of huges -- cannot buy amounts of assets. you cannot make it work economically if the whole institution has to hold more capital for an incremental increase in assets. it is not so easy. will see the emergence of private equity into the financial services sphere to a degree more than we have seen in the past. david: you mentioned another asset that banks have his people. there is a report from citibank suggesting there could be 1.7 million, or more, jobs lost over the next 10 years because of sin tech. on that and view the ramifications for traditional banks. rodgin: there's no question that a competitive issue for the banks. i think that there is a broader issue, which is how can we regulate f

. >> what about the fdic? what kind of insurance?he insurance for deposits that's already there. >> it only helps depositors after the bank failed. we need to get to a point where there is no incentive for anyone to take money out of a bank as they did in 2008. not so much ordinary people in 2008 but big financial institutions like money market funds. >> i want to make sure, governor, i understand your views on the current central bank policies around the world. do you think the european central bank and the federal reserve, should they be raising rates right now? >> no. the problem they've got is that no one central bank, i think, can easily get out of this. most countries in the world could now say, if only the rest of the world were growing normally, we would be fine. but since it isn't, we aren't. so the temptation is to say, what's left? let's push down the exchange rate. we saw it in asia, particularly japan. we're seeing it with the european central bank trying to get the euro down. there is no doubt that through this year the

we got a report from the fdic that over 90% of community banks are now profitable, compared to 78% in the year dodd-frank was passed. a number of things dodd-frank does that i think help community banks, in terms dodd-frank of putting stricter regulations on the large banks, the main competitors of community banks, and also the consumer financial protection bureau extends consumer financial projections the competitors of community banks. at the same time, there are continuing pressures. some of the regulation, there is a role for more technical assistance, especially with a very small community bank. it may not have the resources to devote someone full-time to regulatory compliance. in greaterrole technical assistance from the government to community banks. think dodd-frank does exempt community banks from a wide variety of regulations passed under dodd-frank. and the consumer financial protection's bureau has exempted things under $1 billion or $2 billion from a number of these protections. there is a role for these exemptions when they are used judiciously. problem we have to keep a