i'm now a member, as you said, of the fdic board. i have great colleagues on that board. they've been working with me to get up to speed on these issues. i also happen to be fortunate because the deputy director of the bureau rank date who's been up here to testify is a banking expert in both investment banking and commercial banking. and he's working with me on these issues. so, we will -- we will address them as they come. but these are fams naturing and important issues not just for this country, but to the world. and we want to make sure that our banking system is strong. i know you want that. we want that, as well. >> mr. cordray do you know of any financial institutions you recall that have been well capitalized, well managed, well regulated that have failed? >> i think that only happens, senator, when there is some extreme dislocation in the country at large. that may have happened -- >> it would be very unusual, would it not? >> i would say the great depression and the financial melt down we suffered through in '07-'08. that may have happened to some banks that did

that's why we have deposit insurance, the fdic. but it would have been a big lesson to the speculators that you're not going to be propped up and bailed out, you're not going to have the fed as your friend. you're not going to have the treasury with a lifeline. you're going to have to answer to the marketplace. and until we get that discipline back into our financial system, the banks are just going to continue to grow, continue to speculate and find new ways to make easy money at the expense of the system. >> president bush, he was still in office then. >> yes. >> he said, "i have to suspend the rules of the free market in order to save the free market." >> you can't save free enterprise by suspending the rules just at the hour they're needed. the rules are needed when it comes time to take losses. gains are easy for people to realize. they're easy for people to capture. it's the rules of the game are most necessary when the losses have to occur because mistakes have been made, errors have been made, speculation has gone too far. t

as you heard, the occ, fdic implemented the regulation on november 7th, 2011. the legislation as office complex, and its impact and the impact of its implementing rules will have significant consequences for the operations of the nation's banking firms and the financial system as a whole. recognizing these considerations and to enable the common terse to react to the cftc subsequently proposed rules to implement section 619 the occ federal reserve, fdic and sec -- spc submitted deadlines for the proposal by one month, february 13th. we're hopeful that this extension will give the public more time to evaluate the proposal and provide robust comments. as described in my written statement from the agency's proposal implements the provisions restrictions permitted activity exceptions, backstops and rules of construction to 619 this combination a statutory provisions alone is quite complex. the proposed rule also establishes requirements for this to charlie permitted activities and interprets many of the permissible activity conservatively including in particular th

consideration to the safety and soundness to nutritiinstitution your responsibilities at a board member of the fdic where you must consider the safety and soundness of institutions. it looks to me that it should be a balance. safety and soundness is important but so is consumer protection. you cannot have one without another. >> i agree with that, senator. i think it is a balance. what i said their primary responsibility is safety and soundness and ours is consumer protection we are going to be consulting and coordinating with the other banking agencies at all times, that is why i believe congress put us on the financial stability oversight council to work with them. i agree with you it would be irresponsible to think you can protect consumers while you are killing off institutions that are serving consumers. that does not fit together. >> there's got to be a balance, has it not? >> i aagree. >> and you are going to look to find a balance? >> and we will do that by listening to the banking institutions. >> the area of too big to fail, very important to a lot of us and i hope to you. during the cons

>> well, that and even more importantly, or equally importantly, since the fdic came into existence at approximately a similar time where the government was guaranteeing deposits so that people didn't lose if a bank got into trouble -- people didn't lose their lifetime savings. my father lost his lifetime savings during the depression. and it was quite a family event. and if he had ever known i worked in a bank he would have died yet again. but not only did they want to keep the banks from the business for reasons of not risking the money. they didn't want them to use the guarantee that the government provided for those deposits to leverage their position. because, yoknow, if you have a deposit base that's guaranteed by the government, it sure puts you at a great advantage in terms of going into the market and playing around. >> the government's going to pick up your losses, right? >> yeah. and you don't have a funding problem. >> that was what the fdi -- >> because you have guaranteed deposits. >> that was federal deposit insurance corporation was designed to protect my -- >> that's r

every opportunity in which i have had to question witnesses from the otc, the treasury department, the fdic, fave all done the same thing. they have those advisory committees, and yet the -- the growth and regulations continue, and the sense by community bankers that they're not understood still prevails. so don't want to discourage you from doing that, but please at least from my perspective understand that that's probably not sufficient, and will depend upon your attitude and approach. and then in that regard, before you respond, are small lenders, community banks, credit unions, they need clarity, not only for their own sake, but for in my view the ability to grow the economy. i do think that there is a lot of reluctance on the part of many small business men and women to make decisions because they don't know what next is coming from washington, d.c., what the rules are going to be. and in regard to financial institutions, the phrases that have been around for a long time are pretty well understood. unfair, deceptive. but the legislation that created your position has, to bankers, to us

i am a member of the fdic board. iffer great colleagues on that board working with me to get up to speed on these issues. i happen to be fortunate because the deputy director of the board is a banking expert and both investment banking and commercial banking and he's working with me on these issues. so we will address them as they come but these are fascinating and important issues, not just to this country but to the world and we want to make sure that our banking system is strong. i know you want that, we want that as well. >> mr. cord ray, do you know of any -- mr. cordray, do you know of any financial institutions that have been well capitalized, well managed and well regulated that have failed? >> i think that only happens, senator, when there is some extreme dislocation in the country at large. >> it's very unusual, sit not? >> yes, i would say the great depression and the financial meltdown we suffered in 2007 and 2008, that may have happened to some banks that did not deserve it. >> "the washington post" recen

everything that happened through the fed and through the treasury department and everything that the fdicad to do because of the fed and the treasury department was the trillions of dollars that had no vote, that weren't brought up into the public forum until afterwards. and the media had a role in not showing that and not dig iging as deep. bloomberg and this show and so forth aside. i think that's one of the issues. but the fact remains, there's $1.6 trillion of just access reserves doing nothing for the mainstream population. not going into infrastructure or jobs. just literally sitting there gaining interest at the fed, which was created at the bailout. that's one portion of what still remains and what's still a drain on the system of the main street public relative to the risk that was being mentioned before that has been blown up by the banking system. the banking system has more derivatives than before the bailouts begin. it's more risky and bigger. nothing is really standing in its way except here and there, ron paul and different people are looking at what the fed has been doing.

and so, but, you know, we took a tremendous exposure at the fdic, and i still, -- outrage every statement that the bailout created. so i try not to look back but i think going forward we should be working hard to restructure the financial system where it never has to happen again. and i do believe that some of our priorities are fading as time -- >> that's important what is the biggest change that needs to happen so this doesn't occur again? >> i think the banks need to be able to do. the large financial institutes. there is a resolution come a bankruptcy like mechanism. the prom is we didn't have tools for the pieces of the organization outside of the bank and holding company for most of the risk was taking. it was all nonbanks like aig. going forward, dodd-frank does offer ideas for large financial entities come and it is a bankruptcy like process. is there any losses above that, it is on industry, the taxpayer doesn't pay anything in any future you, you think it shouldn't be that it's too big to fail speak with a should not be. i think the market needs to understand that because the ma

>> that's one of the big problems that's occurring right now is the government through the fdic is actuallyelling banks not to loan money. they're picking who gets money. that's wrong. one of the big reasons we found this crisis, is because of the reinvestment act and other rules where the government was telling banks exactly who they could loan money to and who they must loan money to. so the last thing we need is going back to the situation of the government picking who gets loans. there are wonderful positive ways to solve this if you believe in economic freedom and equal opportunity as opposed to equal outcomes, which is what the president clearly believes in. >> let me ask you about the idea that they have of trying to disincentivize, quote, outsourcing, to incentivize companies to, quote, insource, meaning to bring factories, bring some stuff here. >> sure. >> it would mean government of closing some tax loopholes that reward them for shipping some jobs overseas. what about dealing with legislation like that? >> well, we're all for closing loopholes. in fact our budget last spring vir

if people lost confidence with the w fdic we would be in the soup.n the flip side it is not happy job to deal with failing banks. getting out there explaining what we're doing, why we're doing it. it is really key. bank regulators are not as always open as they should be. i think it is positive. once people understand what you're doing they will support you on it. >> i'm going to talk more about instilling confidence but, governor, you know, to get any of your initiatives passed, right you need the public to be on your side. in fact some people say that you, you're kind of governed by youtube because you go right to the people, right? kind of right over the heads of some of the usual suspects at times. how do you get millions of people to follow you? have confidence in you? >> you know, i think it is telling them the truth. and, i think it is just, kind of a sad commentary where our politics is today that, you know, i'm this guy from new jersey getting all this attention and all i'm really doing what i promised what i would do during the campaign and

they send spam e-mails that appear to be from an agency like the federer reserve or fdic, and you were set to fix a link to fix the account but the link to a funny website that downloads malware to steal your banking information. three american airlines crewmembers are hurt after a scary flight from south america. a mass of turbulence hit the flight traveling from brazil to miami yesterday. passengers say an entire food court flew into the air and then smashed a hole in the ceiling. passengers reported thinking the plane was going to crash. the flight landed safely just after 6:30 p.m. last night. it had 135 people on board. " we members were taken to the hospital for treatment. i cannot imagine that. the food court smashing against the ceiling. insane. >> i get scared any time there is a ripple in the air. >> absolutely. turning to the weather. i think we made it through the worst so far? >> we really did. it will warm up later today. looking at just rainout. not freezing rain. one exception, some of the valleys and northwest of town. but really, i think that is a big exception. let's

the intelligence world of course, you know, it's very interesting. so much of what we take for granted today with respect to our economy, whether it's fdic, the securities and exchange commission, there's so much that goes back to the new deal. but what we also need to remember is that the whole national security structure of the united states was built in the second world war. the development of our intelligence capabilities through the oss which eventually would evolve into the cia. the office of the national security adviser, it's a fascinating story, but essentially what many historians have argued is that only franklin roosevelt could keep all of this stuff in his head and when he died they had to institutionalize it and they had to create a national security adviser much like harry hopkins had done. they they had to institutionalize what roosevelt had in place. the former director of the fdr library is very famous for a line he wrote about roosevelt being the sole coordinating link and when he died they realized they had to do something to coordinate that and so we ended up with this national security structure that we have today. now, of course,

we still have the fdic which, i think, is the third piece of glass-steagall that's left. so when this all came to us, we started out, and mr. miller and i had a one-page amendment that was more or less not the volcker rule, but sort of the precursor to the volcker rule. it said, i first said if you're a systemically significant organization -- it could have been an insurance company, it could have been a bank, whatever -- and you're trading places the economy at risk, then you can be ordered to divest it. so there was a danger piece to it. mr. miller said, well, we ought to have that for banks generally, so we added banks, but there was a danger piece to it. we did some carveouts, you know, for the insurance industry for their hedging and their covering and all of that stuff. went to the senate, they said, no, we don't like it. but we'll do a few exceptions. then went to the conference committee and said you can't do this accept, and they go through all of the market making insurance kinds of issues, foreign banks, holding companies, and now we've placed the regulators wi

the chairman of this committee compared this to the sec, the fdic, and the fed, all of which are commissions or boards, therefore they have people who help the executive in prudent rulemaking. so, i am stunned at the untruths that have been stated, and the partisan nature. i'm sorry you are caught up in all of this. you and i talked about the fact that almost all of this would go away if the administration would sit down and put appropriate checks and balances in place. i talked to mrs. warren about this, and i talked with you about this. thosendering how conversations went between you and the administration regarding the conversation we had, and the possibility of just having some degree of check and balance for this new position that you hope to hold. >> senator, i appreciate the opportunity to meet with you and to hear your concerns first hand. i conveyed the substance of those conversations back to the administration. i've not sought to inject myself in legislative discussions that might be between the congress and the president. my job at the bureau has been chief of enforcement, and ou

the chairman of this committee compared this to the sec, the fdic, and the fed, all of which are commissionse people who help the executive imprudent rule making. so, i'm stunned -- in prudent rulemaking. so, i am stunned at the untruths that have been stated, and the partisan nature. i'm sorry you are caught up in all of this. you and i talked about the fact that almost all of this would go away if the administration would sit down and put appropriate checks and balances in place. i talked to mrs. warren about this, and i talked with you about this. i'm wondering how those conversations went between you and the administration regarding the conversation we had, and the possibility of just having some degree of check and balance for this new position that you hope to hold. >> senator, i appreciate the opportunity to meet with you and to hear your concerns first hand. i conveyed the substance of those conversations back to the administration. i've not sought to inject myself in legislative discussions that might be between the congress and the president. my job at the bureau has been chief of

the federal deposit insurance corporation fdic is suing for $250 million for herwoots role. ut herwood who declined our request for an interview has said he is not guilty. >> i think the majority of what is said about mr. herwood is not true. i think the majority of people who are saying bad things have never met mr. herwood, i know mr. herwood. he is very kind, very gentle person. >> a gentle man who drives a hard bargain. >> federal negotiators announced a deal with ancient redwoods just weeks after andy's report aired. john sasaki -- >> state and federal officials announced this morning they have reached an agreement to save the hedge waters grove. it is the largest privately owned region in the world. >> it's a a win for pacific harvesting company, and it is a win for the people of the north coast of california. >> reporter: the plan calls for a head waters preserve that will be owned by the state of california. it will contain 7,500 acres of land. and a new edition of the ancient forest known as springs. in return pacific lumber company could get about $380 million in ca

and the fdic has done certainly a great job in trying to make sure that the reserves and all of the requirements of the law are met for banks to be stable because we're want going to be mailing out banks. however, now we've got another overlay with -- you know, i heard the president of the united states talking at his state of the union message. i heard him say, we are going to go through this government and we're going to cut back on regulations because we know regulations can hamper the ability for our small businesses to get up and go in and get out there and hire people and make a profit. we think profit is good because we think profit makes people able to hire more people and get this economy going. so there is a constitutional issue at stake that the president just decided that congress was out of session and appointed mr. cordray. now, in any other instance, congress would have some say because we would be able to set a budget for this agency and we would be able to curb some of its overreach if we feel that it is there. but not this agency, because there is no congressional oversight of

we still have the fdic which i think is the third piece of glass-steagall that's left.so when this all came to us, we started out and mr. miller and i had a one page amendment that was not the volcker rule but sort of the precursor to the volcker rule that said -- i first said if you're a systematically significant organization -- it could have been an insurance company. it could have been a bank, whatever, and your trading places the economy at risk, then you can be ordered to divest it. so there was a danger piece to it. mr. miller said well, we ought to have that for banks generally so we added banks but there was a danger piece to it. we did some carve-outs, you know, for the insurance industry for their hedges and their covering and all that stuff, went to the senate, they said, no, we're just -- we don't like it. but we'll do a few exceptions and then they went to the conference committee and said you can't do this except and they go through all of the market-making insurance kinds of issues, foreign banks, holding companies and now we've placed the regulators wit

a fishing scheme that uses >> e-mail that appeared to be from government agencies like the federal reserve or fdic. >>mark: police believe a fight between two groups as we 16 party is what caused gun fire and three people to get hurt. there were three shootings, the first on east 15th street, one person shot. sunday morning, there were two more shootings within minutes of each other. so far no arrests have been made in any of the shootings. >> someone came around a curve too fast and landed on my son's car and slid into my house. they jumped out and said they did not have insurance. >>stanley: residents in this neighborhood have been worried every time it rained because cars would crash. >> they wiped out that barricade four-five times. >> this road surface is some sort of rods and. i do not know what it is very it is beautiful and tough. >>stanley: engineers upgraded one side of the road to give drivers more traction and added a new flashing light but drivers are still behaving badly. it recommended speed limit is 15 when the road is dry. most drivers ignore that often doing twice the recommended

he points out his business is regulated by the same agencies that regulate banks from homeland security to fdic insurance. >> my grandmother is in mexico. so it's in spanish and english. >> begins with retailers and atms in the u.s. they are building a social network that want to share currency. >>> he says he was writing to temptation but delivered himself from evil. they found a tattered briefcase on a florida highway. hundreds of hundred dollar bills. $8,000 worth. he didn't deny with what to do. >> it was going through my head, what are the legal ramifications to keep this? my moral obligation and integrity says you are going to have to return it. >> turns out the money belonged to someone who put the briefcase on top of his car after eating in a restaurant and the briefcase blew off. person who lost the money was blessed with a person who found it because not everyone would have done what frank did. >> i want to know what that guy was doing with $8,000 in a briefcase. >> don't look at me? [ laughter ] >> and putting on the car and driving off. that is another thing. >> we have the clouds m

on july 21, 2011, cfpb to go or consumer protection authorities from the federal reserve, fdic, ftc, lcc, ots and hud. but by law, the supervisory authority over non-depository providers mortgage loans, mortgage brokerage services, foreclosure relief services and abusive lending practices could not take affect until a direct or was in place. that is why on december 8 i was so disappointed to see a coach or a senders block mr. cordray's nomination to be direct here. mr. cordray, a former ohio attorney general is eminently qualified for this position. senator scott brown has called him the right person to lead the agent and will protect consumers from fraud and scams. mr. cordray, when please welcome your today's first direct correct cfpb and through president through reform committee we through. you are through cfpb tickler to work with him and his staff to make sure that americans in the fifth district of illinois as well as around the country are protected from financial fraud and abuse. .. counteracted by extraordinary and unprecedented checks and balances. for example, the fragile

argument is going to be made, ali, at least at the surface level the consumer financial protection bureau is a probably structurally. we had fdc, fdicp of government watch dogs that have done a poor job. making this uber agency, it would be with a lot of power you're not going to solve the problem. there is problems at the root. transactions between consumer and bank, consumer and credit card company are voluntary transactions, do not need the government being the arbiter of the transactions. the argument it's too complicated. we all sign credit card agreement, bank card agreements, we know they are 10, 20 pages long. when you skip to the back page without reading it, you know you're doing that bad. by outsourcing that judgment to the government, you're not going to solve your problems. >> i'm not sure if we read the whole thing we would understand it. david, opposition predates the controversy over the recess appointment president obama made. we saw the agency's founder, intellectual heart behind it elizabeth warren get into heated clashes with republicans. both parties say they speak for the middle class. why is protecting consume

i think, in terms of the dodd- frank act is the first time we tried to shine light on the shadow banking system. fdic position with respect to the shadow financial system. i have to say something, this notion of, let's wait before we get a perfect before we appoint somebody, would have delayed, i think, the election of george washington, for many decades. let me just ask one specific question -- you'll already have the authority seven agencies to implement it today -- is that correct? i am sorry. i want to be sensitive to my colleagues. this is opening statement. i wanted to do both. forgive me. [laughter] i am man with a mission. let me just quickly conclude in 20 seconds. i think we've got to move forward. we essentially know what is about. the chairman pointed out. we are waiting for, i think, the sensible proposals to make reform, but it is hard to do that until the agency operates in the field and on the ground and i hope the recall -- quickly we can do that. >> senator corker? >> i did not have an opening statement, but since i don't i sure would like to have a little leeway what the questions

some people think that cash in a safe deposit box is covered under fdic insurance but they only insure deposits in accounts not the contents of a safety deposit box. the things are only accessible during branch operating hours. think about it. if you have your healthcare proxy in there and someone is in the hospital in the middle of the night you can't get it. i'm not a huge fan of safe deposit boxes. >> they are not convenient. you have to go down, put the key in pull everything out. if you want it, you want it right away. so what do you want to leave them at home? how do you keep them safe? >> you buy a fireproof safe for your home an in that safer you're going to put your passports and your original birth certificate, social security cards and copies of those important legal documents like a will or a healthcare proxy. you should also keep insurance policies, not the statements you get from the company that you paid your premium but the actual policies and any important investment or bank log-in information that you don't want lying around. maybe you pop some of your valuables like jewelry, cash, and spare keys