mr. cordray: what matter are we talking about? mr. luetkemeyer: encore. mr. cordray: ok. debt collection. mr. luetkemeyer: and this was based on not a rule that was enforced but it was a proposed rule you thought you made down the road, have enforced. so that they had a formula that's noncompliance. is that not regulation by enforcement? mr. cordray: i don't think that's what we did in that matter. we did a careful investigation, thorough investigation of the facts. we found that there were violations of either federal debt collection practices act or of the unfair and deceptive prong that were given by congress. and we enforced against that. the notion that because we may issue a rule on debt collection several years down the road or maybe next year, whenever it will be, that in the meantime we can't stop people from engaging in an unfair and deceptive conduct i just don't think is the right approach for us. mr. luetkemeyer: my time's expired. i yield back the balance of my time. mr. hensarling: the gentleman's time has expired. the chair now recognizes the gentleman from

mr. cordray: it is. mr. garrett: you disparage it by saying 1929. mr. cordray: no. in 2010 congress passed the dodd-frank act which changed arbitration, including outlawing arbitration clauses in -- mr. garrett: it's still the law of the land. mr. cordray: although the been modified by congress in several respects now. mr. garrett: it is now your agency's decision to, what, upend that law through a comprehensive action? mr. cordray: no. congress has now intervened and superseded the federal arbitration act in specifics. mr. garrett: has congress ended the ability for arbitration? that's a yes or no question. mr. cordray: in several respects, yes. they have. mr. garrett: i didn't say in several respects. mr. cordray: under the military lending act, they barred arbitration clauses and lending contracts to service members. under dodd-frank they did for residential mortgage contracts. mr. garrett: we totally eliminated arbitration? mr. cordray: no. but they gave us then authority, congress, congress -- i'm not making it up. mr. garrett: -- [inaudible] -- eliminate arbitr

mr. cordray: i don't know. mr. barr: the reason i ask is the bureau cites a study by a professor that annualizes there is final shal agreements. do you know how the study was funded? because it was funded by the american association for justice, that is a conflict of interest. you are using data from a -- mr. cordray: we took it in from all stakeholders and funded by industry. i don't hear you -- mr. hensarling: time of the gentleman has expired. ms. waters: a study from esponsible -- negotiations african-americans and latinos. mr. hensarling: all members will have and we forwarded to the witness for his response. and i would ask you mr. director to respond promptly. all members will have legislative days to submit extraneous material into the record. this hearing stands adjourned. [captions copyright national cable satellite corp. 2016] [captioning performed by tional captioning institute] book tv has 48 hours of nonfiction books and weekend. here are some programs. saturday night, a book discussion with new york

mr. cordray: thank you, mr. chairman, ranking member waters -- members of the committee, thank you for the opportunity to testify about the semiannual report to congress. i appreciate your continued dialogue as we work together to strengthen our financial system and ensure that it serves consumers, responsible businesses and the long-term foundations of the american economy. as we continue to build this new agency, we made considerable progress on our core responsibilities to exert supervisor oversight over the nation's largest banks and nonbank financial companies and to enforce the consumer financial laws enacted by the congress. our analytical approach to risk-based supervision is leading to more systematic changes at these institutions and we're making progress on leveling the playing field for all participants. it resulted in institutions providing more than $95 million in relief to over 177,000 consumers. our enforcement actions have based on careful and thorough investigations and most have identified dec

mr. cordray: -- mr. pearce: student loans charge 5% where wall street bankers pay less than .5%, state of the union loans pay 5%. do you deal with student loans? mr. cordray: i think there are issues that could be looked at there, that might be for the congress. mr. pearce: there are issues you haven't looked at, you're looking at other shshes. you established a q.m. rule and the q.m. rule was supposed to protect consumers but what it actually did was drive 95% of the loans into the g.s.e.'s, which are exempt according to the legislation that you tried to impact. 95% are driven into the g.s.e.'s and you have no action that you're taking on g.s.e.'s, yourself come do you think here picking on people making loans to people trying to pay their rent on the end of the month. but when you drive them inside of government your answer is, here ewith -- we cannot do anything to back the government off, we don't deal with the i.r.s., don't deal with government loans and what you do is driving people into a market w

mr. cordray: what matter are we talking about? mr. luetkemeyer: encore. mr. cordray: ok. debt collection. mr. luetkemeyer: and this was based on not a rule that was enforced but it was a proposed

mr. cordray: again, our i.t. group could come and give your office a briefing if you want to know the details. mr. westmoreland: i just want to know who ted it you mentioned the information that's available to other people and that you don't have that information. i want to give you -- mr. cordray: i said we have a different kind of information. we don't have information that's identified by you or by me it's anonmiesed. mr. westmoreland: i know you have the information, name, akess, zip code, date of birth, race, ethnicity, gender, language, religion, social security, education, military, employment records, financial account nurbles, financial events in the last few years, life events in the last few years, mortgage information, current balance, current monthly payment, delinquency grid, monthly payment, refinanced amount, bankruptcy information, credit card account numbers, credit amounts, loan balances, past due amounts, minimum payment requirements, high balance amounts, chargeoff amounts, second mortgage, ho

mr. cordray. first of all, mr. cordray, it's very important for you, for the cfpb, for this nation, to know that there are democrats on this side of the aisle that have serious, serious concerns and issues about how you're dealing going forward with this racial situation at the cfpb. we have legitimate concerns and i have expressed those. but here is the most dramatic fact with the auto dealers and that is this. your methodology. now, fair is fair. when you start talking about discrimination and you start talking about giving people checks because they have been discriminated against, but then you use a methodology that is flawed totally, based upon the last names of people. so now what we have and you know this for a fact, you have many white people out here whose last names are johnson or williams or robinson or smith or scott or whatever, who are getting checks and they're standing there at the mailbox wondering wow, where did i get this check from? that is an unintended consequence that needs to be corrected. ye

mr. cordray: i would not know what to say to that. mr. barr: has the fed ever denied a particular transfer request? mr. cordray: all of our requests have been within the bounds of the law. mr. barr: they have never vetoed a particular allocation of an expenditure. systemdray: that is the established by congress and we are carrying it out. mr. barr: the fed is not involved in the implementation of the bureau's budget. that is the point. that is our concern frankly. the fact that the bureau has been able to move forward with a $200 million luxury renovation to its headquarters, pays the average bureau employee more than members of congress which support the conclusion the fed is a rubberstamp to your expenditures and we would hope since you are not accountable to the congress or subject to the appropriations process, a fundamental flaw in the dodd frank law, we would hope it would be accountable to the source of your funding. mr. cordray: several things are inaccurate you just described. [indiscernible] mr. barr: let's talk about the arbitr

mr. cordray. the question concerns the credit card bill of rights which is the second bill that president obama signed into law and rahm emanuel his former chief of staff told me that it's one of the most popular things that he ever did because it touches so many consume consumers. and in that card act we required you, the bureau, to conduct a review every two years of whether the act was having the effects that we intended. first of all, i want to know, what is the response to the card act when you get complaints, are you getting complaints about credit cards? to the extent you were before the card act went into effect. and what about the clear and transparent disclosures? has that worked? and no more hidden fees are expected, interest rate hikes that are hidden. the bill wanted to crack down on unfair and abusive tactics by card companies only consumers. your report found that the card act has dramatically improved the credit card market, making it fair, more transpafrnt and even as the cost and

mr. cordray a dictator. when it comes to the well being and liberty of american consumers, he is not a particularly benevolent one. congress must address this critical problem because congress helped create the problem. it is -- it has outsourced much of its legislative authority to the executive branch in general and cfpb in particular. in doing so, it's compromised our foundational principles of co-equal branches of government, checks and balances, due process and justice for all. congress must reclaim its article 1 authority and reclaim it now. there's no better place to start than the cfpb, an agency that's abused its power that it never should have had in the first place. it is time to uphold our oath to the constitution, it is time to strip the cfpb of its rule making authority and return it to the elected representatives of we the people. i now recognize the ranking member for five minutes. ms. waters: thank you, mr. chairman, and thank you mr. cordray for joining us to discuss the cfpb's semiannual r

mr. cordray. the question concerns the credit card bill of rights which is the second bill that president obama signed into law and rahm emanuel his former chief of staff told me that it's one of the most popular things that he ever did because it touches so many consume consumers. and in that card act we required you, the bureau, to conduct a review every two years of whether the act was having the effects that we intended. first of all, i want to know, what is the response to the card act when you get complaints, are you getting complaints about credit cards? to the extent you were before the card act went into effect. and what about the clear and transparent disclosures? has that worked? and no more hidden fees are expected, interest rate hikes that are hidden. the bill wanted to crack down on unfair and abusive tactics by card companies only consumers. your report found that the card act has dramatically improved the credit card market, making it fair, more transpafrnt and even as the cost and

mr. cordray was here in march testifying in front of this committee, it was the treasury who was in chargeof all bureau operations. and so my question to you is, you have been follow-up letters the date back 288 days asking you specifically, who in fact at the cfp be a treasury, they said it was you folks who are in charge. >> congressman, i responded earlier that we did follow up on this and provide the inspector general findings. i am happy to five 25 when you get back, who is responsible for making the decisions. >> he will get back. >> 288 days. that seems to be an awful lot of time. >> in august 25 treasury informed the committee they found the work authorizations related to the renovation were finalized after cfp. >> here is what i am concerned about. these are simple simple questions i'm asking you, they are not complicated. if you are unwilling or unable to answer a simple question and puts in doubt the american taxpayers. make decisions that affect our capitol markets. >> we provided 200 pages of information. >> okay. >> am happy to look and see what you are looking for. >> thank

mr. chairman, and thank you, director cordray for attending today. just to expand on my friend's inquiry from california, what -- can you give us a sampling of what cfpb rules are expected to be finalized this year? >> this year? >> yeah. >> it's hard for me to hazard a guess on what exactly will be finalized when because the process, it's kind of like a judicial opinion, it's under advisement and it just gets done when it gets done. i think we clearly expect to finalize our prepaid rules this year. i think we clearly expect to finalize further amendments to the mortgage servicing rules this year. i think we are under way on a number of other rule makings and i just couldn't really hazard a productive guess as to when those would be completed. >> thank you for that. and switching subjects, it has recently come to my attention that some of my constituents are offered loans by lenders that are not licensed to operate in missouri. my understanding is that a customer will click on the online ad of a lead generator with the customer doing so under the ass