oversight of nonbanks has previously existed, this is appropriate. but we will continue to calibrate that as we go. we're learning as we go every month, as you can imagine. >> based on the consumer testimony, the cfpb's overdraft protection and payday advance, it's apparent there exists in the marketplace a growing need for short-term needs. i think it's critical we identify and address the small number of lenders who operate illegally whether they're ensured depositories or nonbanks. my concern is overregulation by the cfpb of the vast majority of regulated banks and nonbank lenders will limit innovative products and access consumers need to legitimate short-term credit. can you provide some assurances that that will not be the case? >> so that's a great question. it's an issue that we're thinking a lot about at the bureau. we had our first field hearing on the issue of short-term low-dollar loans. we recognized that that is an area where consumers have a real demand. they need that product. but we're concerned the products in that area need to be p

. >> right, nonbank. >> where we have jurisdiction. and and they were on hold as is typical of our agency. >> so they were -- were they asked specifically by the cfpb folks that if you want to go over and keep working on these issues, you can go? how did that whole thing transpire? >> so, i think we sent over a couple of detailees early on, just to make sure that folks knew what they were doing on things they didn't inherit. so they took rules from the banking industry, and put them away but they hadn't done what we have done. >> for the most part, nay eve been hired away. >> i'm still confused about why that function is leaving you all. because i don't understand what is it they're going to do that is different from what you all are currently doing? >> i realize there's a little bit of bitterness here. healthy competition to me is spreading your resources thinner when you all have expertise in this area, it's just silly. >> it's a really fair question to ask. i guess i would say this. if, over time, we have back filled most of those p

aborderly liquidation authority to resolve the largest and most complex bank holding companies, and nonbank financial institutions, if necessary. and a requirement for resolution plans that will give regulators additional tools with which to manage the failure of large, complex enterprises. before discussing our efforts to carry out these new responsibilities, i would like to try to place these responsibilities within the broader frame work of the way the fdic's resolution activities regularly work together with bank supervision in responding to the financial difficulties of fdic insured institutions. i think this is quite an important point to make. the issue is not just do we have authority to place systemic companies into a public receivership process. the issue is really developing a -- an integrated system of bank supervision, combined with bank resolution that allows us, in effect, a frame work of early intervention with these institutions to avoid failure, as well as the capacity to manage an orderly failure, if necessary. and i wanted to go through that with you, if i may. it's impo

in addition to all the things you have mentioned, we have launched our nonbank supervision program where our teams are going into these financial institutions. they are able to have all the information to assess risks, assess compliance with the laws, to see how consumers are being treated. and our approach to that is different from the historic banking agency approach, which is looking at it from the standpoint of how it affects the institution. we're looking at the consumers' interests first. we have an active enforcement division that is looking carefully at many things. they have investigations ongoing. i'm not permitted to talk about ongoing law enforcement activity. that becomes public when it ripens. but we're active in that area as well. and we have been engaging in our rule-making processes. which, of course, are compulsory requirements for all institutions, bank and non-bank. we issued our first rule on nonremitans transfers. we have a number of rule-making areas underway. i think we're active on all fronts. it is just that we're new. we are only a few months old. so some of th

mortgage companies, mortgage brokers and other nonbanking finance companies, that's this sector that has really had some of the worst actors in the subprime mortgage prices and many of them were guilty of discrimination and illegal steering of minority borrowers predatory is subprime loans. most of those companies have collapsed, thank goodness. but they were replaced by the firms that ufr to rescue the -- communities like, i'll give you an example, in my district in east oakland, they were targeted, entire communities by misleading advertising, unfair and predatory loans and discriminatory lending and these were based on race and ethnicity. now they're falling prey to scams that are promising to save their homes and lower their mortgage payments so there's many scams that are going on. so your agency is as busy as ever. but you have some help along the way, but you have mentioned and we all recognize it's going to take a couple of years for the consumer financial protection bureau to be fully operational. so in the meantime, let me find out what you all are doing on these mortgage r

it may make sense to defer to the cfpb, but they are a new agency, we have jurisdiction over nonbank financial institutions, they have jurisdiction over that plus banks, and so, i think they have their handzs full and as we kno, there's a fair amount of on uncertainty over the agency itself and over the recess appointment and so, while i think over time, it may be that we could not need the resources to bring these types of cases, i think this year, and for now, it's critically important that we do. again, what we are trying to do is shut down a lot of scammers that preying on the most vulnerable consumers. mr. roushe? >> this feeds into one of my principal concerns about the budget that has been submitted to you. first, in addition to 38 retirements, which we had this last year. we lost no fewer than 21 ftes, to the new cfpb. so, there's supposed to be 59 fte open positions at the commission. second, however, each and every one of those empty position s left by the 59 ftes, has either been filled or it will befie fi period under the 2013 budget. third, the 59 slots will be augmented

had that we started in my office when you were the enforcement director, i thinkaed the time, about nonbank payday loan, making short-term lending and, in particular, practices on the online lending environment. appreciate the fact that you've had -- held hearings on this issue in alabama and looking forward to continuing our conversation on that. thanks again for the great work that you're doing. look forward to our conversation today. >> mr. doe. >> thank you, mr. chairman and i am -- >> for one minute. i'm sorry. >> thank you, mr. chairman. and i am one of those on the other side that are concerned about how the appointment was made. and i think that's just -- goes down to the basic structure of the law. we know there's an ongoing discussion about the cfpb's organizational structure. it's also a big concern that i have. should the cfpb destructure be the same structure at the house under democrat control passed in the 111th congress which is also the structure that we've been advocating in this committee during this congress. or should the structure remain as it is today with few checks

some of the nonbank servicers have ever been overseen by anyone. and we need to bring them under the umbrella so everybody is playing by the same rules as quickly as possible. so we're going it move forward on this. we have certain mortgage servicing rules we're required to adopt by january. we're looking at what else should be part of that. and we're consulting closely with our fellow agencies. but we see that as a high priority. for me, i saw mortgage servicing problems in ohio going back to when i was a local treasurer, then state treasurer, then state attorney general and now have found them to be national in scope. >> thank you very much. that -- that's great. i really appreciate that. i've been following very closely the mortgage servicing consent on a process initiated by the occ and federal reserve board for the five biggest, largest mortgage services. this process allows the servicers to hire their own auditors to investigate their foreclosure practices during 2009 and 2010. we have asked the occ and the fed why they didn't include the cfp

and the bureau's resolving consumer complaints, launching bank and nonbank supervision programs, developing simple disclosures for credit cards and other financial products and is targeting specific abuses aimed at older americans and service members. and have created offices just to address these concerns. i think this is a great list of accomplishments for a new agency. and from what i can see in your report, it's just the beginning. i hope that during this hearing we can focus on what the cfpb has laid out in its report rather than constant complaints that there's not enough oversight or accountability. the bureau's structure, the positive gao report, the very fact that director cordray is appearing today before us in his 15th appearance, or of a senior -- or of other senior staff is a testimonial to the number of checks placed on the bureau and i would say it is very accountable given the number of times you've been here. and i congratulate you on your fine record so far. i look forward to your testimony. and hearing about the plans for the future to work for safety and soundness of the

for nonbank. >> nonbank financial. >> where we have jurisdiction. and they were on hold as is typical of our agency very good competent attorneys and economists. >> so they were, were they asked specifically by the cfpb folks or did you say to them if you want to go over and keep working on these issues you can go? how did that whole thing transpire? >> so i think we sent over a couple of detailees early on just to make sure folks knew what they were doing in areas that they didn't inherit. because remember, they took the consumer protection functions from the banking agencies and put them together in a different way. but they hadn't done a lot of what we had done. so we sent over a few detailees. for the most part they've been hired away. >> so i'm still confused why that function technically the function is leaving you all because i don't understand what sit that they are going to do that's different from what you all are currently doing? and i realize there's a little bit of bitterness. >> i wouldn't say bitterness. >> but if you're doing somethi

banks and vendors and nonbanks. and >> -- >> i have a mortgage. i get a loan from someone. i buy that house. what happens in this marketplace, which has gotten more complicated in the last 20 years, is that the person or firm that is actually dealing with my mortgage on an ongoing basis, taking the payments, making sure they are applied correctly, dealing with situations that may come up where i fall behind, working with me to make sure that the mortgages still working, that i'm still making payments, that is a whole industry itself. mortgage service. those rights are often bought and sold in the secondary market. i might get a loan from you, my mortgage lender. by the time i may have a problem three or four years down the road, the entity dealing with meat could be quite different. i have no choice in that. they can be bought and sold without my approval. if i come to you end -- you can say sorry, i'm not dealing with this anymore. everybody who has looked at this has shown this. the way in which some of the vendors performed poorly matters a lot to consumers. it also matt

>> i think a lot of the predatory practices have been on the nonbank side but there's some to go around for example, in the mortgage market and the runup to the crisis, a lot of loans were being made without careful assessment of the ability to repay. we have to be writing a rule and we're going to be writing a rule to try to clarify what that now will mean to improve the mortgage market. we also see areas where people don't have the ability to choose their provider. they can't vote with their feet and, therefore, they're more vulnerable than they would be otherwise. we see areas where institutions are telling investors one thing about the product they're producing and telling consumers quite different. that's always of concern to us as well. >> you're joining us on a heck of a week where we've got some stress test results and a slew of buybacks yesterday, a slew of dividend hikes. at the same time we're seeing the introduction of some new fees to consumers on their checking accounts. at least at a minimum on a pilot program level in certain areas of the country. how do you reconcile th

there are a few sort of nonbanks participating but it's largely banks looking to hedge exposure. they have already closed out and decided they don't want to play this recovery game. >> and if you bought cds last march, how well have you done? if you're just trading. >> entry point is key. you probably made 30 cents on the dollar if you bought as much. so a reasonable -- you bought protection. >> and the good news is that it will be worth buying protection still now if you're worried about portugal now it's still going to be worth buying it, right? >> the market functions efficiently and what's going to be key in the next couple of weeks is the recovery rate that's established matches the losses people have had on bonds so that it functions as a good hedge and that people feel that they've got the payout they wanted. >> good. okay. thank you for joining us. still to come, jackie, shares in the london stock exchange the biggest gainer. they've bought a majority stake in clearnet. >>> good morning and welcome back. it is time for your global markets report. let's start here in the u

finding in their report, what actions should be taken by retailers, credit card companies, banks, and nonbanks, mobile phone service providers and others, to develop mobile payment opportunities that are tailored to customers so the customers use it? they say the technology is out there and people don't want it at this point. or use it. >> the mobile devices are still just starting to reach the consumers' hands through the mobile networks and through the retail stores that offer them. so, we're expecting that there's going to be an increasingly number of options available for consumers to be able to upgrade phones with smart card technology that can support these mobile payments. unfortunately today we have a chicken and egg situation where you have consumers who want to pay with their mobile device and are waiting for the equipment to arrive for them to use it, and that will -- when the equipment is available in consumerrers' hands then the issuers of the payment instruments that work mobile phones -- >> that's one barrier. what other barriers exist to prohibit mobile payment options? securit

we have to rebuild nonbank finance. that's where the conduits are going to be.hris, overall, does between basal, dod frank and the stress test, are the regulators requiring the banks to be overcapitalized right now? >> i think many of them, yes. the thing is, remember, these tests didn't talk about the litigation with bank of america. they didn't really talk about second leans. i could haircut wells fargo that much by themselves. the fed is trying to justify what they've done on dividends and also in terms of allowing banks on their earnings. >> dod frank says they're not co-defined, too big to fail. >> of course we are. if you're regulated by the fed, you are too big to fail. we have to get the fed out of bank regulation. give them a very clear monetary mission. let the comptrollers office and the state regulators handle this. >> look, the small bankers like me, too. i got to speak at the f.d.i.c. i said, look, the big banks aren't more profitable than the small bullnecks. they don't do that in europe. if that was just a transaction trust account, which is what