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  Consumer Financial Protection Bureau Report Part 1  CSPAN  April 12, 2018 2:40am-4:29am EDT

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in the case of absence or an ability of the director so i want to be very clear that the democrats participation in this hearing is not an acknowledgment of his legitimacy of the bureau but nevertheless given the many impactful and harmful decision he is making with regard to the consumer bureau it is necessary for us to engage with him in the oversight capacity while the court decide who should actually be in charge. i am concerned about mr. mulvaney actions and have serious questions from his testimony.
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his very presence at the consumer bureau compromised the critical independence of the agency which was specifically designed by congress to be an independent watchdog for american consumers and director of the white house office of management and budget he serves at the pleasure often reports to the president which means this president has an inappropriate level of influence from the consumer bureau of banking regulations. it is very clear that mr. mulvaney is carrying out the president's agenda and is taking a series of actions that weaken the agency's ability to carry out the mission to benefit the predatory actors that he is designed to police for example he has tripped the consumer bureau of their lending
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enforcement and supervisory powers, to the effect to undermine the consumer bureau ability to enforce their lending laws and mr. mulvaney has also demonstrated a pattern of working to help out payday lenders to stop the implementation of the consumer bureau rule and initiate a lawsuit the bureau had initiated against a group of payday lenders who had allegedly deceived consumers about the cost of the lungs. i had interest rates as high as 950% per year. he has also ceased the investigation into a high-cost installment lender which reportedly was engaging in abusive practices and the consumer bureau is a safe haven for payday lenders so
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much though that the former ceo of world acceptance corporation send him her resume asking if she could be the next director of the consumer bureau. those enforcement actions have ground to a halt with zero actions between the time for his first walk through the door of the consumer bureau so mr. chairman democrats would not allow the consumer bureau to mandate that notion to the undermine it is critically important agency must be allowed to continue its work to protect consumers from unfair or abusive practices i thank you and i heal back the balance of my time. >> we now welcome the gentleman from new jersey from the consumer credit subcommittee.
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>> welcome back to the committee we appreciate your willingness to be with this morning. cfpb has a relative mission in practice has been accountable agency for many years there is concern surrounding the bureau with the opportunity to observe from multiple points i have no doubt the insights today are valuable and compelling. now the rules coming out of your predecessor seeking to serve communities they will pair with a desire to regulate enforcement instead of having those comments across the nation and as you know those effects those things in credit union because ultimately they are charged with protecting so to take steps not just talk
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the talk but walk the walk to ensure consumer protection without consulting financial independence to underscore the need for increased transparency to call for an end as the acting director which in your words would frighten most of us to allow for very public input in your rules and call for an end to unlawful legislation of the bureau staff thankfully ura bureaucrat but a great meter and a most welcome change american consumers also afforded the opportunity to control their own decisions and your leadership i do believe cfpb as well as way to finally living up to its name we thank you for your steps you have taken so far and we look forward to your testimony that you -- and i yield back. >> now the gentleman from shigella for one minute.
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>> thank you and madame ranking member and with the pageantry of this committee we had differences when we were here we have maintained a good relationship we still have differences that is part of what works with the committee that the concern that i have is the bureau's original mission with the consumer previously under director cordray $12 was was returned to consumers 30 million americans were covered on -- recover damages to predatory practices by banks or student loan providers. but as pointed out, since the director of euro has not taken any significant enforcement action without delayed delayed implementation like the payday rule is even more concerning to take steps to remove the independence of the bureau and that is the point that's most
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important that bills independence makes the important entity that means it stands up for the american consumer and the administration believes the person who already has a full-time job and director of omb can also be the principal defender of consumers and does not take that role seriously an and. so the concern whether or not you actually hold this position? >> your time has expired the chair has been very generous on that 60 seconds opening statement. >> you get my point. [laughter] and i today we welcome the testimony of the honorable nick mulvaney with the edward port cfpb is required from the dodd frank act obviously no stranger to us as he was a
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colleague before president trump nominated him to serve as director of the office of management and budget also the current acting director of the cfpb appointed novembe november 24 prior to his time in the administration he served the people of south carolina and is a member of congress 2010 in the first republican member to hold that seat in 120 years lifelong carolina resident bachelors degree from georgetown and also from carolina at chapel hill. without objection the written statement will be made part of the record and director mulvaney welcome home you're not recognize for your oral presentation of your testimony. >> thank you mr. chairman and it is good to see everybody
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and the new face is a pleasure to be her before you to talk about the semiannual report cfpb i hope you all got it you should have access to that i also have a statement my experience being on the committee having people read their written statement is a waste of time so i will not do it. i will talk about why am here today i want to be here to answer questions i'm excited to be here today to answer questions. it is important we bring some transparency and accountability to the bureau, the bureau cfpb it is not designed structurally to be accountable by its very dna and nature it is not accountable to you or the public or anybody other than itself to help today we have a chance how to more that and why that is not beneficial but
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it does not have to mean unaccountable to everyone i will give you one example i hope we can talk more during the course of the day. i have to be here the statute requires me to be here and i'm happy to be here but i do not have to answer a single one of your questions. i will and i look forward to it but i don't have to the statute say that i shall appear before congress and i'm doing that today and tomorrow in the senate but i don't have to answer your questions or testify which is interesting because elsewhere in dodd frank other people do have to appear and testify or appear in answer questions but for some reason the director of the bureau does not only have to appear. so i believe it my statute or a right to sit here and twiddle my thumbs for the next four hours with u.s. questions i think that's wrong. i'm not going to do it but that is one of many samples why this is broken in the way
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the statute is written and i hope as a result to answer questions to recognize some of them may be i don't know to both sides but i want to answer as many as i can but i hope the aim is the one end goal to figure out how to work together to make this more accountable senator warren was not happy with the answer she got back from me and i reminded her that it is like the frustrations inside of the aisle had with mr. cordray over the last for five years so i suggested to her maybe isn't the nature of the person sitting in the chair causing the frustration that the nature of the underlying statute and that both sides would be well served by fixing the statute to bring transparency to into your questions and while we may disagree with the policy and
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as we have in the past we will not disagree about the fact that if i'm going to say here to spend $700 million of your money maybe i should have the answers to some questions how and why i do that. that is the reason i'm here to reason that you all are here i will answer as many questions as i can get tired. thank you mr. chairman. >> the chair yields himself five minutes so before i get to the question mr. mulvaney i do wish to complement you because contrary to your predecessor you turned in your testimony in time you're the first acting cfpb. >> i have a really good staff. [laughter] >> we have worked together for many years i have a number of concerns of cfpb and im concern about the extent they
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do indeed protect consumers because a part of consumer protection is to protect the rights to a competitive and transparent market. but i'm also concerned but have we simply have a serrated traditional principles with checks and balances with due process? you told us under dodd frank if you so chose you visit here to put your feet upon the death and take out your iphone and play candy crush and there is nothing we can do about it. i also understand i believe i mentioned that depending on what side of the bed you wake up on, you alone could determine in your solitary capacity to declare any credit card in the nation abusive and outlawed. is that correct. >> that is the case, yes sir. >> i believe also under
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section 1022 you have the power to unconditionally exempt any class of covered persons from any provision of this title or from any rule issued under this titl title? as the bureau deems necessary? so my reading of this part of dodd frank tells me that if he so chose, could you exempt all community banks, scratch that could you exempt all banks located in dallas texas from the jurisdiction of the cfpb enforcement? >> if we vote it is a class, absolutely. >> what is the class? >> great question. >> so on your own cognizance you could exempt all banks
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that started with the c? >> yes sir. >> this doesn't seem to be wise and seems totally devoid of checks and balances. let's talk about the budget. so there is a feeling on how much you could ask but would determine that? >> i do. >> how do you get your money mr. mulvaney? your probation? >> i sent a letter to the federal reserve board and they sent me a check. >> today reviewed your request ? >> i don't think so they have never asked to justify any spending we send the letter please send us last week was 98.5 million. >> what is your personal atm your $700 million? i assume you have to pay payroll but that is roughly
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half of your current budget? >> 60% so the other 40%? what is that? a few hundred million? during 208,000,280,000,000 that you will not get to decide how it is spent? >> yes sir. >> so the dallas cowboys stadium at&t pays roughly i think most to 20 million per year for naming rights. if you wish to advertise the bureau, could you take this money and outbid at&t has naming rights? >> absolutely in fact we have $40 million up to this point in advertising. >> could you take that many to ensure that every man woman and child in america has a cfpb t-shirt and all caps? yes we paid 2-foot advertising
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every single tax return. >> this is borderline insane. borderline insane. so with zero dollars of funding? it was in the second quarter 98.5 is that correct? >> if you chose going forward to ask for zero dollars, isn't it true the other provincial regulators like the fed have their current jurisdiction to enforce all federal consumer protection laws? the mckay think there is one exception. >> with the exception. >> that is one place where it comes to. >> if they have zero funding
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by the state attorney general's? >> yes or. >> i have exceeded my own time i will set a good example and now recognize the ranking member. >> allow me to repeat to mr. mulvaney your words should not be construed as the acting director of the cfpb and look forward to the d.c. circuit court ruling in this matter so i will not stand idly by while president destroys the bureau so before i raise some particular questions with you, you have made quite known this morning that you don't have to be here and you don't have to
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answer questions. i don't know why you think it's so extraordinary to previous director came here 63 times not only answered all my questions but was badgered by the chairman expect you to be here and act that way so given that the president is appointing friends on wall street it is clear is goals are to install you at the consumer bureau. do you support that mention? so i remember some of the things that you said. do you remember having said i don't like the fact that cfpb exist i will be perfectly honest with you have you change your mind? >> i grew up saying that.
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sound like something i would have said. >> that is what the tea mug -- cfpb has said it is a joke some of us would like to get rid of it. >> i don't have a specific recollection but i believe that i did. >> we original cosponsor of the bill introduced the last congress to complete the repeal consumer bureau? >> it would not surprise me but i don't remember. >> those of us who have the responsibility to implement dodd frank and the public policymakers are supposed to be about someone who notices in the position that happens to be sitting in illegally to begin with, why should we
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think that you are not there to destroy cfpb? i would suggest im not responsible for dodd frank you are responsible for the implementation i have not burn the place down despite what you may have heard what i was going to do we have ten fewer people working there now than the day i took over 1627 people. >> so let me just tell you that you cannot implement a thing unless first of all there was legislation passed to do what you are doing and second we have the responsibility for oversight of your implementation. so understand the relationship. third let me just say the
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office of an equal opportunity has something of very concerned about mr. mulvaney the bureau has had many successes including record court settlements for consumers who were against credit card mortgages and recently made changes to undermine the role why have you stopped experts of the lending discrimination bill and stopping them from doing their job? >> we haven't the resilient enforcement function and education function prior to the changes made all of that that with her own supervision all we did was put into two pieces supervision and enforcement education was elevated to the director's office. we put them in a more procedures position that they existed before.
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>> investigated his report revealed suggest there is pervasive redlining going on throughout the country so are those laws are not even a priority? you look absolutely it is important we should be against that we do intend to force the laws at the bureau. >> how do you ensure that is not a practice among lenders? . the same way it has been done since created reduce supervision and oversight and enforcement with. the ground we have 600 people doing supervision. >> i yield back the balance of my time. >> your time has expired. >> director thank you for being here aiming to adopt the policy regulation by enforcement director denies
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that when i asked about that with the simple truth is by taking enforcement action no ruler guidance has been issued in regulation enforcement i could gave you an example on the finding that they were thinking about proposing the rule. not just the days of regulation are coming to an end when it comes to enforcement we will focus on the harm to the consumer so can you tell a your rules for enforcement and what you believe the authority should be used? >> yes sir. i believe very firmly that financial service provider should be allowed to know what the law is before they are accused of breaking. >> that is very sustained. lung -- assisting.
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[laughter] >> in your strategic plan the goal to ensure all consumers have access for products and services how do you accomplish this goal? >> we will do a better job and went to make it very clear we will do things different i don't want to apply the staff is not doing a good job before i got there my experiences been i have been very impressed with the quality of the work that is that has been is to do but the question is what it has been asked to do also to pay attention is the cost-benefit analysis i was quite surprised by the amount of the qualitative cost-benefit analysis my background is in numbers so we do qualitative cost-benefit analysis i thought that was supposed to be quantitative viacom to accept that it can
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be a valuable part that we will do a better job on quantitative analysis to the point to see how consumers would be affected if the services were not available to them or the impact on the market or credit or the flow of capital and do more quantitative analysis in those areas. >> in that same line there is a discussion to stop the implementation of that and i assume trying to go back and look at the cost-benefit of those rules propose my understanding is there were significantly more folks that were supportive to allow them to continue versus those that are very prescriptive.
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>> just to clarify we have not stopped the rule to follow that administrative procedure and that is what the epa requires we have not done any pre-judgment or to give notice of our intention that is exactly what it implies and we will go through all the statutory requirements to do so so is that possible i could come to a different conclusion in my predecessor? absolutely in fact that is the nature of the discretion of the office but we have just been given proper notice. >> looking at that rule are you looking at access to credit for consumers that is a priority to go about those markets to provide an opportunity and also the
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cost-benefit of the rules those are two important points. >> and it is relevant to ordinary rulemaking and absolutely that is part of the data. >> there was a situation the chairman talked about some of the dollars you are using with economic research and they could do some self-directed research? >> we can talk about that a little bit further with another question but yes that is not named toward the mission of the bureau pass something that has caught my eye. >> i yield back the balance we recognize the gentlelady from new york. >> welcome and thanks for
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being here. first i want to be clear just because i'm engaging with you at this hearing that it is not an intelligent you are legally entitled to be the acting director of the bureau. i believe dodd frank was clear and i do believe leander is a lawful acting director but that being said i have question how long have you been at the bureau? >> november 24. five months? >> in your predecessor the bureau was bringing for enforcement actions per month to protect consumers. how many enforcement actions has the bureau initiated since he took over? >> we have initiated not -- zero. >> it has brought absolutely
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zero enforcement action in nearly five months and to have been there? and in your testimony you said our job is to enforce federal consumer laws. but so far there is no evidence you are enforcing any of the laws. you also said you are taking a new approach to the bureau does your new approach involves bringing any actual enforcement action? or are you telling me every single financial institution in america has suddenly snapped a twofold compliance with every single consumer financial loss to took over? because that would be the first time in history that have happened. what is your explanation? no enforcement law that has been violated or no abuse of consumers in the last five months?
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>> nothing could be further from the truth congresswoman. we are actively litigating 25 cases that we are continuing to litigate what was before i was there we only made one dismissal that without mom -- without prejudice. >> please submit these documents to the committee would like to read them. >> what documents would that be? >> does actually -- actions you are continuing if that was done before you or if you initiated those under your leadership. >> i want answers very quickly there are investigation that her ongoing there was 100 of those. >> but my question is what have you initiated not ongoing under your leadership. >> we can do business every day.
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>> can you look into that and get back to us what you have initiated anything under your leadership to help consumers. in your predecessor i would like to make clear that the bureau return over $12 billion to american consumers were ripped off and how much money has the bureau return to american consumers since you took office? 93,000,093,000,000 have returned? >> yes ma'am. >> connect 92-point. >> could you get that paperwork to the chairman? >> yes. that is public record. >> is that initiation that you did or done by your predecessor?
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>> the distribution approve while i was on the job. >> was a project initiated by you to return this money? >> and i can make this in writing i want to know how much you return under your leadership that you initiated not the prior one so can you get that answer in writing? because they feel that basically we have that refuses to take any new action and refuses to punish anyone for violating and insisting rule and refuses to provide tangible help to american consumers the very people that bureau was created to. this is not what congress intended when it created the cfpb and i am deeply disappointed, deeply disappointed to have essentially taken off off the beat in terms of initiating new action to help consumers. not just following on your
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predecessor. i read in the paper on monday that reuters reported that bureau, is my time up? is going after wells fargo went time to ask this question? >> we are 20 seconds over. >> my apologies i yield back i was just warming up and i ran out of time. >> the gentleman from the capital market subcommittee. >> director at is good to have you here. the last director that was here pretty much called and obfuscated and ran out the clock and filibuster the entire time now we are actually getting answers which is refreshing the amount i do want to congratulate you and your staff 0.006% on your
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staff so yes that is a sarcastic note that believe you are gutting so i want to give you an opportunity to address a couple of things that were brought up with those enforcement actions with the former bureau chief for the first six months for the first six months. >> and your sense amen from a person i was in community identification with action that has continued he dealt with you are moving through what was in the pipeline? let me make it clear we are still going after bad actors in fact i am ratifying action to clarify whether or not a constitutional issue has been handled so with other litigation ongoing we are still going after bad actors.
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>> as indicated what practice you are hoping to curb and eliminate is the enforcement regulation by enforcement that something we could talk about a colleague said if everybody snapped into compliance there is always the benefit to be a realist we always know there are bad actors out there but what a lot of us had that concern is the last director of the bureau frankly just made up violation and they would go out requesting information on activities that were perfectly legal but they just didn't like them they would find people and try to curb everyone's action with the fines and threats. >> we are taking specific examples of actions brought of
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a financial service provider doing something they believed to be legally one legal for a long time and are guided by and without notice cfpb pop them for what was considered to be violations i think that is wrong enforcement by regulation by enforcement should be allowed to know what the law is before you are find than a few dozen press releases on that after words but i didn't follow a lot of that. >> i know certainly we are very eager to get those consent decrees to go out and use those to bludgeon. so i do want to allow you to talk about the self-directed researchers in the economics department are what you are dealing with at the bureau. >> of it just made aware the
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last couple weeks the economist will take 50% of their time back half of their time half of their taxpayer sponsored time to do research which on its face is that not objectionable that there is no requirement that it be connected to the actual job of the bureau a could be researching the impact of hot airports and urban growth that we paid for. >> and what does that have to do with the bureau? >> i still struggle with that myself. >> as what i. >> you have the ability to change that requirement? be my guest and know we will follow the rules have a collective bargaining agreement the treasury
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employees union to have rules how we go about changing job descriptions and we will go to the proper process that we are looking very closely at that. >> we we can have half of the economist that do the same work on consumer protection so we could grow that 0.0% up a little bit to get the same amount of research out of half of the number of economist? >> that is not very efficient. >> i yield back now the gentlelady from new york is recognized. >> thank you. >> mr. mulvaney i'm very concerned about your roles at omb and now at the cfpb how you are able to work part of the time and act as an independent director of the
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consumer bureau charged with protecting working americans from deceptive and regulatory business practices? i have a specific question i would like to get a yes or no answer if you need to expand please plan writing. you have offices at both agencies? be my guest ma'am. >> you ever contacted work of cfpb at omb. >> on the weekend i like to be in the omb office. >> yes or no? you may guess. >> have you ever worked in the other office? >> no worked in the other office? >> no cfpb in the oval office with president trump? >> no i don't get to go into any office of president is not there. >> that he is never there?
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>> the first question at the oval office know so by definition i could not do it without president trump. >> so maybe you are asked a question about cfpb and conduct business right there. you ever do work of all of the offices of cfpb? >> maybe i take a phone call that most of my work is done at omb. >> you do. did you receive paychecks from both? >> no ma'am. >> only one paycheck? in the guest ma'am. >> you maintain a government issued e-mail account for both roles? yes ma'am. have you ever contacted cmb business from the omb account? >> no ma'am. >> and don't think i have done either from either account. >> are you sure.
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>> my practices to do my job. >> please go back and check and submit an answer. >> every single one of my e-mails? >> no. if you have to e-mail accounts that belong to your two positions and why do you need to use one for business that is my point see if the bureau work on the bureau phone i have three phones in a do omb work on my omb phone mike have you ever have the one be related expense to the cfpb expense account routing travel? >> no ma'am. >> ever charged cfpb related expense to your omb expense account? no ma'am. >> you have an executive for
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either role? yes ma'am. >> have you ever asked your executive assistant to carry out other business? you know that ares frustration for both assistance. >> that is why you shouldn't be there. >> have you asked them. >> mr. mulvaney the financial crisis and the great recession followed by g5 late american losing their homes to foreclosure and well cfpb exist for families to surrender the harder dollars to the deceptive or unsavory business practices what lessons did you learn from the financial crisis and the great
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recession and how you apply those lessons to the cfpb? . the lessons of the financial crisis and 35 seconds? the answer was it was a system failure of major proportions and major system failed there is no one cause i one single cause it was caused by a variety of things it was abusive to the housing market absolutely. can we do better to enforce the law? absolutely do we look forward to doing that? absolutely. >> that is very encouraging. let's wait for the numbers to show that. thank you. >> your time has expired now the gentleman from wisconsin. >> will come director mulvaney just from the first part of this hearing there seems to be some agitation coming from the
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other side of the aisle and i understand the agitation because democrats don't have a lot of power or control over the cfpb because that was the intent of congress to make sure congress had no power or control over the cfpb so when you are a party and power maybe that is in line with your viewpoint you think they are great but if not empower men it is a great deal of frustration and i would note if by the very structure of the cfpb coming from dodd frank my friend voted for that is causing that very frustration and i would note to the gentlelady from new york talking about five lead individuals losing their homes i would argue a great number of those people were getting loan that were subsidized by the government because of
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government policy putting people in homes they could not afford and that hasn't modified or changed policy in america since the great recession. but i do want to ask the issue was brought up with the economist comedy work at the cfpb? >> i am told 20. so innocent these individuals? >> i have the numbers. >> you could reduce that 20 down to ten and put 100% of their time. >> in theory yes but it is very difficult to reduce the size of the federal staff. >> that on average if you are making $200,000 per year we complained about the salaries
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i believe that for a different time but that is $2 million per year that you could save to reduce the staff to work on cfpb issues. >> maybe we could say 50%. >> that you can't fire or modify any one? >> is not active to say anyone but it is extraordinary difficult to reduce the size of federal bureaucracy and it is harder at the bureau then at the appropriated agency. >> and then reducing the staff by how much? >> ten people out of 1700. >> so so the great conspiracy has reduced the staff by ten out of 1700? my gifts are. >> if you want to redirect the
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work of that economist could yo you? >> we can but we have to jump through some hoops that i think we can at least get them to spend their independent research time on things that mentioned the bureau. >> you are a lawyer? what about congress when it uses language in one of the bill not another they do that intentionally so if congress says people come to congress to testify or appear and answer questions they intend them to come and answer questions before the director they say just appear and don't specify like another questions to answer questions then that was done intentionally young lawyers learn statutory. >> inside dodd frank the director of f stock is to report and testified the
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director financial research is to appear and answer questions and testify i am not required to do that. >> for that is the belief it is the intent you appear but not to answer. >> that is the interpretation the whole effect of dodd frank it is surprising they would have gotten that wrong. my time is almost up. i was chair of the oversight committee and i asked director cordray countless times for information and often times i would be responded with news clipping or press releases from the cfpb they have done no other investigation with the transition from cordray to mulvaney have you seen any evidence of request that have been made by congress or the ig that were not complied with? that you can now comply with? that you can now comply with. we recently come across documents we believe to be
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responsive to the previous ig request not previously produce. >> with a in the basement. >> and the directors file. >> your time has expired now the gentleman from california. >> welcome back to congress mr. mulvaney. on this side we do not like your jewel. however that's better than not liking me. >> however i point out that right now i would assume the trump administration is trying to determine your successor to be a full-time person dedicated to being a handmaiden for the financial services industry. i have seen the full-time appointment that has been made to other position and we may
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lack nostalgia for this and that i'm not sure that trump will appoint a full-time sensor that will do things the democrats support. in the past democrats have been opposed to a commission so it is my understanding that chairman has changed his mind and is now for the director because he anticipates the sole director successor will be the most efficient to rapidly repeal all the good work and by your predecessor. i just say that what consumers and business want is not a lurch to the left or the right but steady and ascertainable regulation so there has been a concern your agency has regulated through force.
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what are you doing to make sure more guidance documents are drafted and release? or regulations are published or defined? so people can no how to live with these rules other than enforcement action for what action you have taken? >> we are focusing on the more formal meeting it is easy to send a letter it is harder to send guided it is hard to do rules but is the right way to regulate to go to those appropriate steps because it allows notice of comment where guidance may not so now you ours something making guidance it is one thing if you don't know what the right policy should be that you meant to say at this but not in the way
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that people understand more guidance documents. >> i do agree that is the appropriate use of guidance. >> that would be helpful. the home mortgage disclosure ac act, will you be using your authority to provide an exemption? >> we have given notice of our intent to look at changes that going to the proper administrative procedures for the scope of the data set that statute requires 11 data points i think the previous leadership asked for 25 also looking at the size and scope of the financial to show that might be covered. >> section ten to two was designed to give the bureau the power to provide exemption for certain rules to community institutions are smaller institutions. will you use your authority to
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grant exemptions to community institutions like the credit union? >> that wouldn't be appropriate for me to say that we are going to proper procedures but with the intent to look at the scope does have occasion to collect information on that point you just raised. >> finally to be required to appear but not testify, i was here when dodd frank was written it was in this room, not mount sinai not every word is perfect or every other statue we require somebody to appear they are expected to respond to questions mr. zuckerberg is across the hall right now there is a statute that requires him to appear except he would be subpoenaed and mr. mulvaney
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you certainly remember sitting on the side and i'm sure if a statute required a government official to appear and they appeared but refuse to ask questions a subpoena would be by the committee with bipartisan support i'm glad you decided to answer your question. >> but your rules find a third party which i am. >> now recognizing the gentleman from kentucky. >> welcome back to rector to committee i appreciate your candid testimony which continues to ask those lack of ability -- accountability of the agency you continue to make a powerful argument that your predecessor unwittingly made that the desperate need
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for the fundamental overhaul of the agency to make it more accountable. dodd frank authorize the bureau to issue to required disclosure of those conversion rates for remittances that was promulgated by your predecessor applies to 100 or more remittances annually but because it turns out created a tremendous amount of paperwork for credit union to slow down the process adding additional expenses one example in my home state of kentucky where the federal credit union was forced to exit the line of services they were offering to their 100,000 members mostly service members and their families because of the additional costs to execute this remittances that made it harder for active duty military personnel especially those served at fort knox and employee on the front lines in
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the middle east to prevent them from hitting those remittances back to their families. i asked her predecessor about this issue i assumed it was an oversight and they would have wanted to correct this because he talked about helping veterans but when i asked the director he would consider exercising his discretion to fix the rule here is what he said. the dodd frank statute constrained him and mandated that 100 remittances limit and actually did not blame of the best flavor from inside but actually democrats for voting for dodd frank for tying his hands not allowing him to exercise any discussion to
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help active duty military personnel so when you disagree with your predecessor that under the statute you have the discretion to provide relief and leave exercises? >> we do not interpret the statute to say we have no discretion, no. >> thank you for the very different answer from your predecessor. would you consider working with our offense and constituents to move that disclosure threshold from 100 up to 1000 so those serving abroad can provide a back to their families. >> there is good news as part of the statute we are required to do look back one of them we already noticed we are doing that and we have requested information as to the point you have raised asking people to participate as we gather
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the data to determine if that will need to be changed. i'm glad we have leadership now actually working for men and women in uniform and not against them. it is not subject to the process i appreciate the fact that in your third quarter budget request that denies the american people their control over how they spend the money and you have all of these accountability issues consistently after year i have determined that tax act.
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to sponsor the stadium what's wrong with putting the appropriations is one of the suggestions we make in the quarterly report. why you would absolutely voluntarily give up the appropriations process for the bureau i don't understand. >> under the rule americans now cannot finance a manufactured home loan. they more or less have dropped significantly. would you consider revisiting the threshold so americans realized the dream of homeownership? the time of the gentleman has expired. the gentleman from new york. >> thank you mr. chairman.
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mr. director. >> you are still the budget director is that but a full-tir part-time job? and the debt numbers and the budget, are you focused on that at all? >> i spent some time on that. i have two full-time jobs. >> i know many people that work full-time jobs an and do both of them in an exemplary manner. you are talking about a budget as big as the united states of america bears an issue that we have i would think the american people would want someone focused on the budget and you were appointed by the president of the united states to run the budget is that correct?
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in my parent's hometown it was whether we disagreed and in your statement you said earlier and i think you indicated to the ranking member of that ma maybet was something you said to be perfectly honest you didn't like the fact that the cfp b. exists. you haven't changed your mind on that, have you? you also said certain things about it being a joke and those are your statements.
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>> it would seem to me the statements are true to get rid of the beer because you were never forget zero. it would be to take it over. he never was in support of it of the bell that it needed to be so now you happen to be in power for the president appointing his budget director and he makes a determination and you see the opportunity now to get rid of the bureau. how do you get rid of the bureau? you stop giving what it does, stop doing the enforcement's and the kind of things the bureau
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was put into creation to give so then it would seem to me what do you do because you are doing your job as a budget director who is morwho's more intent on g the bureau van a former member of congress has stated he did not want the bureau to exist so i don't know what it is that the administration wanted to put people one way or another into leadership plan that does not believe in the europe itself or on institutions, which is what my problem is with this administration. it seems at once to undermine every institution that we have. we have a person that's now who doesn't believe in public education. you have a person now who is the head of environmental protection
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who doesn't believe in environmental protection. so then it seems consistent with the president would like to do is put a person to be the head of the consumer financial protection bureau who doesn't believe by his own admission in the consumer financial protection bureau unlike your predecessor who believed and had a lifelong job of trying to protect consumers. isn't it a fact if yo that you e never in your career protected consumers? >> we are protecting 25 pieces against bad actors. >> i'm talking about even prior there hasn't been anything said that was pro- consumer.
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>> the time of the gentleman has expired. the chairman of the terrorism finance subcommittee. >> it is nice to see you here. thank you for taking questions. we are enforcing the law. to the point i have it within my discretion along the things i could do. today if i wanted to dismiss every single one of those pieces of litigation i could stop all 100 investigations ongoing right now, but we have chosen not to do that because we are still in forcinforcing the ball and givig differently with more restraint than the previous leadership was doing. i had a different view like my predecessor does just like you
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and others on the other side of the aisle. i'm in the executive branch of government and we are doing it differently than other folks might. but to say we are acting illegally i know mr. meeks implied that and that is just not accurate. >> one of the charges of the predecessor was the protection of the consumer consumers and bg almost in his first day we kept pointing out how he was damaging some of the most fragile consumers and those are the ones that lived in my district. it was one of the districts and counties in the nation and they implemented the same wall so i sat yesterday with a banker from that county and he said still
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the rules from that agency or choking up their ability to lend money so most of the banks have just gotten out of the province. under the changes if you look at bad we would be happy to work with you. the manufactured housing are set in place so they can look at them. they don't get them re- amortizeamortized the just abouy five years to continue on as the product.
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several man defense people live their lives. they put a cap had been on three if we could extend it back out. one of the ways we make the economy work in the previous director closed off so many avenues of people trying to get by so those things make common sense. we are in a discussion with the previous director and it is almost as if they couldn't hear or they didn't want to hear we were trying to get consumers
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protected. one of the ways the previous director said he was working on was the data. >> i think i mentioned before the role of qualitative analysis versus quantitative is very different but it's a qualitative analysis that can be somewhat subjected by definition. one complaint i've heard from the financial service providers as a group at large if they felt like there and was always ignored. i'm not saying this is that they
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felt the position had been pre- cooked and they were checking off the box when they reached out to folks in to the extent at anybody felt that way from consumer advocates to industry advocates, we are hoping to do that differently under my leadership. >> likeliness expired. >> the gentleman from massachusetts. >> how are you doing mr. director. >> is it true that you intend to run for the speake speaker of te next year? >> i have two jobs right now and that is enough for me.
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the litany of people believes it proves beyond the shadow of a doubt that they have consequences and i'm not surprised any of those appointments or the philosophy shared by the administration doesn't believe in the government and he won the election. at one point you said it is a poor an apartment. should women be paid for the same work as men? spin absolutely, and i think that is the law. >> do you believe african-americans should be paid the same and hispanics and on and on good peopl, but people se paid the same and they do the same work?
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>> yes, and i agree. >> i thought you did, but i wanted to hear it. when that happened to have not just the law but to fulfill it what happens if we refuse to take information from employers as to how they pay their people? >> i am hard pressed on how this ties to what the bureau is doing. >> its ties to the project direction you took to stop the eeoc from instituting from seven years to try to find out and prove one way or another whether the employers are not fulfilling their legal require meant. some may be doing it intentionally or unintentional
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unintentionally. >> i believe you've are talking about something i did in september and i do recall a little bit about the changes we made. i've not looked back since september. >> is also troubling that you haven't looked at it since september. i think you have an obligation to take a look at it especially when it impacts millions upon millions of women. we are the numbers where women make 80 cents on the dollar. when we take a step towards
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doing it, you proactively stop it and i wonder when yo you will get around to looking at it so you can actually do something about it. >> i am not trying to be evasive, but i haven't been asked that question and i've got 15 press conferences. i'm not saying that it's inaccurate but i look forward to talking with you about it. >> i'm surprised nobody has asked you. this government refuses to do anything about it but i would like to hear from you as to when you plan on taking action to protect the situation.
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>> the gentleman yield to back. in the authority that it has, you mentioned in your op-ed how it was pushing the envelope. it is unfair and deceptive is still unclear what it means and this allowed the predecessor to regulate body enforcement on the case basis and also creates uncertainty for the market participants.
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the way it's written right now it could be abusive and that it interferes in the ability to understand the term or financial product or takes unreasonable advantage in migrate deal of discretion to me. i'm not sure that is th the intended fointentof the congres.
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depending on who is in charge that is not a formula for certainty in the marketplace. iif you published a request regarding the consumer complaint information. this is an important issue and i thought the bureau for taking this up. concerned about the complaints to be misinterpreted or misused this information could be a public resource is presented presented publicly. i understand you may need to be somewhat constrained to get the process going that any insight you can provide would be helpful. >> i do share your concerns and we can talk about the data security. we haven't had that question and i would be happy to talk about
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it. i'm concerned about the privacy of the data and about the use of that data and the unverified nature of some of the data so we are taking a hard look at it in the data. >> what would you expect if they were subject to the appropriations process? you would have to justify things like an economist who might not be spending half of their time on the work? you may decide it's a great use of money but the appropriations process helps to shed light on things and you are choosing not to do that i hope that you would remedy the situation. >> shedding some light on the
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workspace. >> i got 380. it's acknowledged he was not foe last several years because there is a lack of transparency in the bureau that would be prodded to the floor by the appropriations process. >> i want to return back to the use of the term abusive. >> the number was 370 folks, not 381. i apologize. >> with respect to the term abusive, your predecessor didn't answer the question. you gav gave the definition thas absolutely positively no. so, we have the terms of unfair
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and deceptive. there is long case history on what those mean and to find some of the product is abusiv producn a product he abusive without being fraudulent, deceptive or unfair? you consider it to be absolutely redundant? thank you mr. chairman and welcome back. >> he beats me regularly kno no. >> i welcome your discussion this morning, and i would like
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to talk about the semiannual report of the cfp b.. the article published my staff was shared with your staff about a couple wanting to purchase a home in a predominantly african-americaafricanamerican s encouraged by the loan officer of the bank to look in other neighborhoods. so a bank loan officer is virtually steering the borrowers to other neighborhoods and as the article stated i believe it
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is redlining and breaking the law. the anniversary of the fair housing act how would you ensure lending discriminatiofunding tha friendly practice among the lenders. the process has not changed. if it turns out we know some things are in the newspaper they would be perceived as the illegal activities and something we would pay attention to and remedy. >> thank you for that response.
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the bureau's office of fair lending and equal opportunity has had many successes including record court settlements for consumers who were illegally discriminated against indirect auto lending and you made changes to diminish the powers of that critical office is it your view that they are the priority. i mentioned before it has two functionfunctions comes with sun and enforcement which is part of the lending and the education component in the cfp b. those things traditionally have been separated. we have an office of enforceme
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enforcement. the appraisals of the real reale appeared to be a contributor to the discrimination and a housing market and as you are aware african-american family wealth do you think the cfp b. has a role to play in eliminating racial discrimination in the housing market.
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>> thank you mr. chairman and director is good to see you today. it's always a place to testify and we miss having you sit among us and i will miss you at baseball practice. our team has always been better with you on it. you were right when you say the cfp b. is too powerful with precious oversight of its activities. the actions are unfairly targeted and in those big government policies are the
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far-reaching implications ihavee market. your leadership as the acting director is becoming a welcomed change. our friends on the other side are finally recognizing you as the acting director. first question i applaud the work this administration has done to roll back the overreach and authority but also recognize more needs to be done so what can be done to ensure under any new director they cannot reverse course and in the failed policy for the businesses. >> to prevent the pendulum swinging from the right to the left with all for banning administrations you have to change the statute.
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it wouldn't bring very much constancy or certainty to the markets. to take away from the bureau and the director and take back the authority that's why we made specific recommendations. it's why we support a lot of the work the committee has done on a bipartisan reform. >> the next question that i have for you concerns the use of the discretion will makings congress gave the authority under section 1022 to exempt institutions based on science guess it's not exercising that authority.
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the act of strength and 1022 by the credit unions and community banks of the $50 billion will makings so others have costs to include them. should they take advantage to exercise the authority in the future will makings? >> we've already indicated a bus go for the institutions are the size of the financial institution we are going to cover is exactly what we want to gather information on and take a look at and it is pursuant to the authority that you've just referenced. what steps have you taken and what bureaucratic hurdles prevent you from hiring to
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firing or changing the role of the office infrastructure to fulfill the administration's vision? the ability to reverse the size of the force. i yield my time back.
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>> we are reviewing it. i usually don't go into the internal discussions between us and lawyers. >> your time has expired the chair recognizes a gentleman from massachusetts and i thank
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you mr. chairman and director mr. mulvaney thinking for appearing before this committee to help us with our work i want to touch upon a couple things i know there is a contest about the appropriateness of your appointment what my questions on engagement for you to count against those that might challenge the appropriateness of that appointment. >> link you. understood i do want to mention that you are not required to come before this committee that you would sit there and twiddling your thumbs i do want to point out we use saying that in just? i know you are fairly comfortable here about montes i hope i have proven by my responses.
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>> i know you are not standing on that point or if you actually believe that i. >> we are faced with competing language into section mac i just want to ask that because that is the same language in the federal reserve act the chairman of the federal reserve testifies he is just required to appear as well. i was in behalf of congress, we never would allow the chairman of the federal reserve board to just set there and twiddle his thumbs. we have an oversight responsibility and i hope that's not reflective of your role that you could resist or impute -- refused to engage especially with the responsibility over the consumer financial protection bureau maybe that is something for the lawyers later but i want to maintain congress
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ability to have you engage in a meaningful way. you served honorably and stuck to your gun. no question but clearly one of the people was most hostile to the creation and operation of the consumer financial protection bureau. >> i was not here for the creation but yes i was. >> it shouldn't come as a surprise that many have the highest hopes we see the fox penthouse? there is some credence to that. and before you took over we had about one investigation per week we still have 1 million complaints to the cfpb website like wells fargo
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where they are robbing their customers creating false account. so the need for horsemen has not gone away that you only laid off ten people. >> i have not laid off anybody. >> but you are not doing enforcement, what are the enforcement people doing? . that is not fair to not say we are not doing enforcement. >> you have not initiated any action we had one per week before you and now you are hostile to the operation of the cfpb you are not into protecting consumers now all of a sudden the investigation stops? we had some before now you get in there there is zero so
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those that are enforcing before are not enforcing any more and i want to know what the heck are they doing now? >> how this works i will do this very quickly. it is a process. it is a tunnel to make that enforcement initiation bucket is empty you are not doing that anymore. >> it isn't not empty you make it as wet core drain left you but you, you are not doing any initiation of any enforcement you testified that you earlier have filed any lawson filed any lawson and i lossy than you know. but that means you vision or enforcement.
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>> give me one case that you have brought since you got there. >> you said we have not filed any inaccurate time has expired. thank you for the time. just to make sure i understand this, you do not have a directive to answer our questions? and i believe the statute is written in such a way that congress and the people's representatives do not appropriate any menu get your earnings from the fed. i remember when jerry alban was here one year ago she was asked specifically do you oversee the budget at all of the cfpb she cannot answer the question. >> i think the answer is no.
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>> it does not provide by the oversight. >> you don't report to any board? >> no serve nobody. >> you don't report to any board it can be removed for cause from the president or by the president i remember my time at the state chair to deal with the affordable housing space in the state treasurer i was on the board along with others. we had an executive director with a five-year term appointed by the governor that could not be replaced except for cause. it wasn't any board which is including the one that i sat on. and there is no appropriation of state funds. low and behold you have an organization and the problem we had one of which they spent
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$300,000 of taxpayer money for a one bedroom apartment for the average single-family home three bedrooms 1.5 bathroom was 160 grant was 600,000 on waiting list. so you come today to say thank goodness you are there you run the organization with no appropriation of five correct? >> i believe that is the case. >> what if you sent on the office building? >> $242 million. >> remember we asset to the former director hasn't been finished yet? >> no. do you have multiple offices? >> we have two office
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buildings in new york and chicago and san francisco. >> are you under statute to consolidate money? dimmick yes we are exploring that possibility right now. >> so to a mention those numbers and those that were extended. two years later 36000 loans. that is one third of those works tended doesn't have anything to do and then to scan my desk year the daylights out of businesses but instead if we don't like what we see we will threaten enforcement. >> i certainly think we run the risk.
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>> what is the one thing to ask congress to help you fix? >> that me on appropriation. >> taxpayers after appropriate many to you that ask questions why are you spending money? >> we know that can be nasty but that's your job. that is what you are supposed to be doing to be aware of taxpayer dollars i cannot believe i can walk down the street and get 700 million not explained to anybody that is wrong. >> in january release the rulemaking agenda. and with a federal regulatory action by the office of information. and then with those overdraft services will this be included in the spring.
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>> that spring agenda will not include that. >> i implore you to make sure that our voices for everybody. >> now we declare a five minute recess. >> the fact that you had agencies so with that executive management leadership that we have to have you over to clinical agencies that handle and one handles the budget and finances of the federal government? the other protecting the financial