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THE SEMI–ANNUAL REPORT OF 

THE CONSUMER FINANCIAL 

PROTECTION BUREAU 

HEARING 

BEFORE THE

COMMITTEE ON FINANCIAL SERVICES 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

JUNE 18, 2014 

Printed for the use of the Committee on Financial Services 

Serial No. 113–84 

( 

(II) 

HOUSE COMMITTEE ON FINANCIAL SERVICES 

JEB HENSARLING, Texas, Chairman 

GARY G. MILLER, California, Vice Chairman 

SPENCER BACHUS, Alabama, Chairman 

Emeritus 

PETER T. KING, New York 

EDWARD R. ROYCE, California 

FRANK D. LUCAS, Oklahoma 

SHELLEY MOORE CAPITO, West Virginia 

SCOTT GARRETT, New Jersey 

RANDY NEUGEBAUER, Texas 

PATRICK T. MCHENRY, North Carolina 

JOHN CAMPBELL, California 

MICHELE BACHMANN, Minnesota 

KEVIN McCARTHY, California 

STEVAN PEARCE, New Mexico 

BILL POSEY, Florida 

MICHAEL G. FITZPATRICK, Pennsylvania 

LYNN A. WESTMORELAND, Georgia 

BLAINE LUETKEMEYER, Missouri 

BILL HUIZENGA, Michigan 

SEAN P. DUFFY, Wisconsin 

ROBERT HURT, Virginia 

STEVE STIVERS, Ohio 

STEPHEN LEE FINCHER, Tennessee 

MARLIN A. STUTZMAN, Indiana 

MICK MULVANEY, South Carolina 

RANDY HULTGREN, Illinois 

DENNIS A. ROSS, Florida 

ROBERT PITTENGER, North Carolina 

ANN WAGNER, Missouri 

ANDY BARR, Kentucky 

TOM COTTON, Arkansas 

KEITH J. ROTHFUS, Pennsylvania 

LUKE MESSER, Indiana 

MAXINE WATERS, California, Ranking 

Member 

CAROLYN B. MALONEY, New York 

NYDIA M. VELA ́ ZQUEZ, New York 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

MICHAEL E. CAPUANO, Massachusetts 

RUBE ́ N HINOJOSA, Texas 

WM. LACY CLAY, Missouri 

CAROLYN MCCARTHY, New York 

STEPHEN F. LYNCH, Massachusetts 

DAVID SCOTT, Georgia 

AL GREEN, Texas 

EMANUEL CLEAVER, Missouri 

GWEN MOORE, Wisconsin 

KEITH ELLISON, Minnesota 

ED PERLMUTTER, Colorado 

JAMES A. HIMES, Connecticut 

GARY C. PETERS, Michigan 

JOHN C. CARNEY, JR., Delaware 

TERRI A. SEWELL, Alabama 

BILL FOSTER, Illinois 

DANIEL T. KILDEE, Michigan 

PATRICK MURPHY, Florida 

JOHN K. DELANEY, Maryland 

KYRSTEN SINEMA, Arizona 

JOYCE BEATTY, Ohio 

DENNY HECK, Washington 

STEVEN HORSFORD, Nevada 

SHANNON MCGAHN, Staff Director 

JAMES H. CLINGER, Chief Counsel 

(III) 

C O N T E N T S 

Page 

Hearing held on: 

June 18, 2014 .................................................................................................... 1 

Appendix: 

June 18, 2014 .................................................................................................... 67 

WITNESSES 

WEDNESDAY, JUNE 18, 2014 

Cordray, Hon. Richard, Director, Consumer Financial Protection Bureau 

(CFPB) ................................................................................................................... 8 

APPENDIX 

Prepared statements: 

Cordray, Hon. Richard ..................................................................................... 68 

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

Green, Hon. Al: 

‘‘CFPB By The Numbers,’’ dated May 13, 2014 ............................................. 70 

Cordray, Hon. Richard: 

Written responses to questions for the record submitted by Chairman 

Hensarling ..................................................................................................... 73 

Written responses to questions for the record submitted by Representatives Bachus, Barr, Royce, and Pittenger ................................................... 91 

(1) 

THE SEMI–ANNUAL REPORT OF 

THE CONSUMER FINANCIAL 

PROTECTION BUREAU 

Wednesday, June 18, 2014 

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON FINANCIAL SERVICES, 

Washington, D.C. 

The committee met, pursuant to notice, at 10:08 a.m., in room 

2128, Rayburn House Office Building, Hon. Jeb Hensarling [chairman of the committee] presiding. 

Members present: Representatives Hensarling, Bachus, Royce, 

Capito, Garrett, Neugebauer, McHenry, Campbell, Bachmann, 

Pearce, Posey, Fitzpatrick, Luetkemeyer, Huizenga, Duffy, Hurt, 

Stivers, Fincher, Hultgren, Ross, Pittenger, Barr, Cotton, Rothfus, 

Messer; Waters, Maloney, Velazquez, Sherman, Meeks, Capuano, 

Clay, McCarthy of New York, Lynch, Scott, Green, Cleaver, Ellison, 

Himes, Peters, Carney, Foster, Kildee, Murphy, Sinema, and Heck. 

Chairman HENSARLING. The committee will come to order. 

Without objection, the Chair is authorized to declare a recess of 

the committee at any time. 

The Chair now yields himself 61⁄2 minutes for an opening statement. 

This morning, we welcome back Director Cordray to deliver testimony on the fifth semi-annual report of the Consumer Financial 

Protection Bureau (CFPB). 

Protecting consumers within interstate commerce is a vitally important mission of the Federal Government, and, properly designed, the CFPB is capable of great good on behalf of consumers. 

It is also capable of great harm. In just 3 years, the CFPB has 

grown into an unaccountable Federal leviathan of nearly 1,400 employees with an over half-a-billion-dollar budget and the unrestrained power to dictate which Americans can receive credit and 

which Americans cannot. Knowledgeable Americans are rightfully 

alarmed as the threat and the harm begins to mount. 

Since Director Cordray last appeared before our committee in 

January, we have learned much. First, we have learned that in the 

first quarter of this year, we actually had negative economic 

growth of 1 percent. And when you speak to practically any smallbusiness person in our country, any community banker, they will 

tell you that the sheer weight, volume, and complexity of the regulatory red-tape burden is one of the primary reasons that they cannot expand and hire more people. 

2 

We hear, for example, from Barry in Chicago. He says he owns 

a small insurance company, but, ‘‘I spend most of my days on the 

CFPB Web site reading through all the regulations and trying to 

implement them into our system. My loan officers can’t believe all 

the new complicated forms, and our borrowers are all confused. The 

CFPB is adding such cost to the business that only Wells Fargo, 

Chase, and Bank of America will be left for consumers to obtain 

loans.’’ 

Regrettably, this is not a unique piece of correspondence. It is 

one way that the CFPB is regrettably harming consumers and 

helping keep people underemployed and unemployed. 

We have also learned since Director Cordray’s last appearance 

that the CFPB is incurring even more cost on its building renovation. What was then going to cost an estimated $145 million is now 

costing at least $184 million, according to information provided by 

the Bureau itself. That is $30 million more than the building is 

even worth—a building, we must remember, that the CFPB does 

not even own. This is what happens, I believe, when an agency is 

essentially unaccountable to the people. 

Even more troubling, we have learned since Director Cordray 

was last before the committee that the joint database project of the 

CFPB and the FHFA will undeniably collect personally identifiable 

information on millions of Americans in the National Mortgage 

Database. I am not speaking merely of names, addresses, and 

phone numbers, though the database will certainly include those, 

but, shockingly, also people’s Social Security numbers, their race, 

their religion, personal financial information, and even the GPS coordinates to their homes. If this is not considered personally identifiable information by the CFPB, then I don’t know what is. 

A breach of this database could cause untold harm to consumers 

by the very agency that purports to protect them. Without a doubt, 

this National Mortgage Database is an unwarranted and shocking 

intrusion into the privacy of American citizens. It is a database I 

would fully expect to see in either Russia or China, but I am appalled to see it in the United States of America. And I predict, as 

more Americans become aware of this, they, too, will be appalled 

and will demand accountability from this Administration. 

Next, we clearly have the most appalling development that has 

occurred since Director Cordray’s last appearance here: independently corroborated reports of widespread discrimination and abuse 

of employees at the CFPB—not merely virtual discrimination, not 

merely theoretical discrimination or statistical discrimination, but 

appalling acts of actual discrimination. 

Since these allegations first came to light, this committee has 

served as a virtual trauma unit for employees who have come forward to report discrimination, retaliation, and other apparent violations of law at the CFPB. 

And although our committee has publicly invited aggrieved employees from every other Federal agency within our jurisdiction to 

come forward if they have experienced discrimination or retaliation, the only ones who have come forward so far all work or have 

worked for the CFPB. 

Most wish to remain anonymous because they fear retaliation, 

but, as you prepare to give your testimony, Director Cordray, I 

3 

have no doubt that you are aware we will publicly hear from other 

whistleblowers this afternoon, including one Mr. Kevin Williams, 

whose testimony has already been delivered to the committee. He 

will testify later this afternoon about the CFPB, ‘‘The frequency 

and duration of these occurrences,’’ in speaking of discrimination, 

‘‘created a hostile work environment for all Blacks at the Bureau, 

whether they were unwitting manipulated Black managers or mistreated hardworking black employees. It is just that we, the latter, 

suffered the objectively adverse consequences.’’ 

Again, this whistleblower testimony is not unique. 

I have no doubt that all agree, including the Director, that invidious discrimination and retaliation are not only illegal; they are 

also morally repugnant. And until I heard it with my own ears, I 

never would have believed that a Federal office in the 21st Century 

would commonly be referred to as ‘‘the plantation.’’ 

I, for one, am uninterested in hearing how the system is to 

blame, Director Cordray. I am uninterested in hearing about plans 

to conduct listening sessions and hire consultants when the real 

problem is the people you have hired to help run this Bureau. 

These disturbing developments once again demonstrate, I believe 

conclusively, why there must be substantial structural reform at 

the CFPB. Consumers deserve accountability not only from Wall 

Street, but they deserve it from Washington, too. Yet, by design, 

the CFPB remains arguably the least accountable Washington bureaucracy in the history of America, and it shows. This must 

change. 

The Chair now recognizes the ranking member for 5 minutes for 

an opening statement. 

Ms. WATERS. Thank you, Mr. Chairman. 

And welcome back, Director Cordray. 

Today, we once again gather to review the Consumer Financial 

Protection Bureau’s semi-annual report. 

Mr. Director, since you were here last January, Republicans have 

been hard at work drafting and passing burdensome legislation 

that would gut your agency and its ability to stand up for our Nation’s consumers. In the past 6 months, Republicans have advanced 

a number of these harmful measures through this committee and 

this House that would undermine the CFPB’s ability to protect consumers from deceptive marketing, unlawful debt collection, lending 

discrimination, illegal fees, and other prohibited activity. 

I am disappointed that a package to destabilize CFPB’s leadership and its autonomy and tie its funding to the whims of the congressional appropriations process made its way through the House 

of Representatives. If enacted into law, we will be one step closer 

to the Republicans’ goal of ending the CFPB’s ability to protect all 

consumers, including students, seniors, families, and 

servicemembers. 

Just last week, this committee considered and passed a collection 

of measures designed to bog the CFPB down with additional paperwork, increasing its bureaucratic responsibilities, and eliminating 

important tools at their disposal. 

It saddens me that my colleagues on the other side of the aisle 

have aligned themselves with Wall Street predatory lenders and 

other bad actors in our financial system at the expense of proVerDate Nov 24 2008 18:33 Jan 30, 2015 Jkt 091148 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 K:\DOCS\91148.TXT TERRI
4 

tecting customers and consumers. I know in my district, the Bureau has been helpful with all manner of constituent requests, and 

I am confident that the constituents we all serve benefit from the 

Bureau’s expertise despite opponents’ unwillingness to embrace its 

mission. 

Nonetheless, Director Cordray, we welcome you on this, the 

CFPB’s 50th appearance before Congress since its inception in 

2011. That is nearly 1 appearance before Congress every 3 weeks. 

Director Cordray, I would like to thank you for making yourself 

and other senior CFPB officials available to come before this body 

and discuss the important issue of diversity and discrimination. 

While I remain disappointed that my colleagues on the other side 

of the aisle have not granted us the opportunity to speak with you 

on this issue sooner, I hope to hear more from you today about 

your progress in addressing these issues. 

Mr. Director, this is the 5th time you have released a semi-annual report, as called for by law, and each time your agency has 

shown remarkable progress in your investigations and advocacy for 

American consumers. This most recent report shows a continuation 

of your unprecedented record of success protecting consumers and 

servicemembers. 

To date, the Bureau’s enforcement actions have refunded $3.8 

billion directly to 12.6 million consumers. And the American 

public’s trust in the CFPB to fight for them has only increased, as 

the Bureau has received more than 354,000 consumer complaints, 

resolved tens of thousands of individual problems, and provides answers to more than 1,000 frequently asked questions posed through 

its online portal known as, ‘‘Ask CFPB.’’ 

The semi-annual report also indicates the Bureau has continued 

its unprecedented success in enforcement actions against a wide 

range of institutions for unscrupulous actions. In the past year, the 

CFPB was a party to 31 enforcement actions for violations of law, 

including mortgage servicing, kickback schemes, fair lending, unfair billing practices tactics, and deceptive marketing. 

The CFPB has issued a number of important regulations that 

protect consumers from predatory financial practices while having 

significant success on behalf of our Nation’s active duty military. 

In fact, CFPB’s actions and collaboration has led to over $100 million in refunds to our servicemembers. 

So I welcome you, Director Cordray. I commend you for CFPB’s 

impressive track record in these very few short years. 

And I would like to insert into the record the information that 

was alluded to by the chairman on mortgage data collection. It 

seems that the National Mortgage Database was launched by Mr. 

DeMarco, and that the mortgage data collection repository is included in the chairman’s PATH Act bill. There is only one sentence 

devoted to protecting personally identifiable information in that 

Act, so I thought the chairman should be reminded of that. 

And I yield back the balance of my time. 

Chairman HENSARLING. The gentlelady yields back. 

The Chair now recognizes the gentlelady from West Virginia, 

Mrs. Capito, the chairwoman of our Financial Institutions and Consumer Credit Subcommittee, for 21⁄2 minutes. 

Mrs. CAPITO. Thank you, Mr. Chairman. 

5 

And I would like to thank Director Cordray for joining us this 

morning. 

In May of this year, the CFPB released their semi-annual report 

documenting the Bureau’s activities from October of last year 

through March of this year. I am pleased that Mr. Cordray is able 

to join us this morning and talk about that report. 

I do have some questions about the management of the Bureau 

and the effect its rules are having on access to credit for consumers. Earlier this spring, we learned that there were some serious discrimination issues within the Bureau. During an Oversight 

and Investigations Subcommittee hearing in April, a Bureau employee courageously testified about her experiences with discrimination at the Bureau and provided detailed accounts of discrimination and inappropriate conduct by managers at the Bureau. Every 

Member in the hearing was rather surprised as the witness shared 

her experience and those of the other Bureau employees. 

I know that Director Cordray has pledged to set the record 

straight and has promised to make systemic changes, so thank you 

for that. However, changing the system is not enough. We need to 

have some accountability. Failing to do so is a disservice to all Bureau employees. 

I am also interested, as you well know, in the Bureau’s efforts 

to monitor the impact of the mortgage rules that went into place 

in January of this year and the effect they are having on the national mortgage market. 

We have heard repeated concerns from community bankers about 

their ability to navigate the complexities of the rule. In some cases, 

these institutions have decided that, rather than attempting to 

quantify the litigation risks and compliance costs associated with 

these rules, the institutions are simply exiting the mortgage business. 

These rules have been on the books for 6 months, and we need 

to have an honest assessment of their impact on consumers and the 

availability of credit. Consumers are not better off if they are no 

longer able to work with their local bank or credit union to access 

that mortgage. 

It is our job, as members of this committee, to hold the CFPB 

accountable. The agency is charged with protecting consumers; 

however, it is incumbent upon us as policymakers to ensure that 

these consumers are not being harmed in any way by limiting access to credit as a result of the Bureau’s rules. We must also ensure that those who choose to pursue the calling of public service 

are in an environment that is free of discrimination. 

I would like to again thank Director Cordray for appearing. I 

yield back my time, and I thank the chairman for holding this important hearing. 

Chairman HENSARLING. The Chair now recognizes the gentleman 

from Connecticut, Mr. Himes, for 2 minutes. 

Mr. HIMES. Thank you, Mr. Chairman. 

And, Mr. Director, thank you for being with us today. I am glad 

to see you. I am glad that the Consumer Financial Protection Bureau, despite the challenges it has had as it gets started, is here 

and protecting American consumers. 

6 

You have been subjected to years, now, of complaints from the 

Republican Majority around governance, around your structure, 

around accountability. I will swallow hard and accept that they are 

making an argument in good faith as they raise the standard of 

antidiscrimination because they are right. Unfortunately, the information that came out of CFPB is discouraging and concerning. And 

I trust that you will do everything you can to make that right. 

I don’t want it lost, though, as these criticisms are leveled at you, 

what it is that you really do. This is not about Wall Street, this 

is not about derivatives, this is not about insurance companies. 

This is about check cashers, pawn shops, and shadowy lending operations that cluster around our military bases. This is about products that are designed to strip senior citizens of the equity that 

they have in their homes. It happens. It happens big-time. 

Is there a need for you to be here? Since you got started, there 

have been 354,000 complaints to the CFPB about these products, 

which in some cases are predatory. And you have returned, as the 

ranking member said, almost $4 billion to 121⁄2 million American 

consumers. 

That is what this is about. It is not Wall Street. It is about protecting individual Americans and returning ill-gotten gains to 

them. I don’t understand why there is this consistent drumbeat of 

attack on the CFPB when that is your mission, however challenging it may have been to get started. 

So, Director, I will trust that on these issues of discrimination, 

you will be quick and firm in dealing with them. I will trust that 

you will continue to treat the small and community banks that are 

so important in our districts carefully, but I would urge you to continue to do the good work that you have been doing. 

I yield back the balance of my time. 

Chairman HENSARLING. The Chair now recognizes the gentleman 

from Wisconsin, the vice chairman of our Financial Institutions 

and Consumer Credit Subcommittee, Mr. Duffy, for 1 minute. 

Mr. DUFFY. Thank you, Mr. Chairman. 

Without reservation, this committee and Members of Congress 

have continually expressed their concern to the CFPB about its 

data collection efforts. And, continually, Mr. Director, you have 

come to this committee and verbally and to our written questions 

have told us that is not what you are doing, you are not collecting 

personally identifiable information. 

Well, now we have found out that through your efforts with the 

FHFA, you are collecting names, addresses, phone numbers, race, 

ethnicity, religion, education, wealth, assets. You are collecting it 

all. My concern is about the truthfulness and veracity of the Bureau and your testimony before this committee. What you have told 

us, we now find out, isn’t true. 

The NSA came to us and told us they were collecting our phone 

records because they want to protect us from terrorists. You collect 

everything else under the sun. And my question to you is: For what 

purpose? Who are you protecting us from? 

I would say, Mr. Chairman, that we need protection for the consumers from the CFPB and their data collection. 

I yield back. 

7 

Chairman HENSARLING. The Chair now recognizes the gentleman 

from Texas, Mr. Green, the ranking member of our Oversight and 

Investigations Subcommittee, for a minute and a half. 

Mr. GREEN. Thank you, Mr. Chairman. 

Mr. Chairman, I associate myself with the comments of the ranking member and would remind persons that this is but a continuation of the opposition to the CFPB, and, more appropriately, I 

think it is important to say the ‘‘Consumer Financial Protection 

Bureau.’’ Because, as has been stated by my colleague, Mr. Himes, 

this is an agency dedicated—dedicated—to protecting consumers. 

And the great work that has been done at the Consumer Financial Protection Bureau has been done not because of but in spite 

of opposition. In spite of a refusal to allow the Director to testify, 

the Bureau has succeeded. In spite of a refusal to confirm the Director initially, the Bureau has succeeded. In spite of attempts to 

subject the CFPB to the appropriations process, it still succeeds. In 

spite of an attempt to create a commission so as to weaken the 

strength of the entity, it still succeeds. 

The Consumer Financial Protection Bureau has done an outstanding job, as evidenced by a document that I would like to submit, entitled, ‘‘CFPB—which will be the Consumer Financial Protection Bureau—By The Numbers.’’ We will find that these numbers are overwhelmingly positive as they relate to the Consumer 

Financial Protection Bureau. 

And I would like, Mr. Chairman, at this time to ask that this be 

submitted for the record. 

Chairman HENSARLING. Without objection, it is so ordered. 

Mr. GREEN. Thank you. 

I would close with this, Mr. Chairman. The Consumer Financial 

Protection Bureau is here. If we did not have it, we would be trying 

to create it. 

And I am grateful that you are here to testify about the good 

things that the Consumer Financial Protection Bureau has done. 

Chairman HENSARLING. The time of the gentleman has expired. 

The Chair now recognizes the gentleman from Georgia, Mr. 

Scott, for 1/1/2/ minutes. 

Mr. SCOTT. Thank you very much, Mr. Chairman. 

Director Cordray, again, welcome to the committee. And I want 

to start off by commending you and the CFPB for your outstanding 

work, particularly in two areas. 

I think your most demanding area has been in the debt collection 

area, if I am not mistaken. We have a very, very serious growing 

crisis—which I hope we will be able to get into as we get to our 

questions to find out more about what the CFPB is doing—and 

that is student loans. In in my State of Georgia, according to the 

Atlanta Business Chronicle, our students there—the student loan 

amount for over 1.2 million students is nearly $40 billion—$39 billion, to be exact. 

The President, last week, issued a plan to address that. I would 

like to know what you think about that plan. I think it would be 

very interesting for the committee to know, and for the Nation to 

know, is this enough, do we need to do more, and if so, what that 

might be. 

8 

The other area is with our veterans. It is a pathetic shame, the 

way our veterans are being treated. And, certainly, the work that 

you are doing in there, we certainly want to hear about that. 

Thank you, Mr. Chairman. 

Chairman HENSARLING. The time of the gentleman has expired. 

Again, today we welcome back to the committee Director Richard 

Cordray of the Consumer Financial Protection Bureau. I believe, 

since he has appeared here before, he needs no further introduction. 

Without objection, the Director’s written statement will be made 

a part of the record. 

Director Cordray, you are now recognized for a summary of your 

testimony. Thank you. 

STATEMENT OF THE HONORABLE RICHARD CORDRAY, 

DIRECTOR, CONSUMER FINANCIAL PROTECTION BUREAU 

Mr. CORDRAY. Thank you, Mr. Chairman, Ranking Member 

Waters, and members of the committee. Thank you all for inviting 

me to testify today about the semi-annual report of the Consumer 

Financial Protection Bureau. 

As the ranking member mentioned, my testimony today marks 

the 50th time that a senior Bureau official, usually me, has testified before Congress. You would think I would have it down by 

now, but there are always challenges. 

The Consumer Financial Protection Bureau is the Nation’s first 

Federal agency, as you know, with the sole focus of protecting consumers in the financial marketplace. Financial products like mortgages, credit cards, and student loans involve some of the most important financial transactions of people’s lives. Since we opened our 

doors, we have been focused on making consumer financial markets 

work better for the American people, the honest businesses that 

serve them, and the economy as a whole. 

My testimony today focuses on the Bureau’s fifth semi-annual report to Congress, which describes our efforts to achieve its important mission. Through fair rules, consistent oversight, appropriate 

enforcement of the law, and broad-based consumer engagement, 

the Bureau is helping to restore American families’ trust in consumer financial markets, to protect American consumers from improper conduct, and to ensure access to fair, competitive, and transparent markets. 

Through our enforcement actions to date, counting yesterday’s 

enforcement action, we have aided in efforts to refund more than 

$4.3 billion to consumers who fell victim to various violations of 

consumer financial protection laws. In the fall of 2013, for the first 

time we took action, in conjunction with multiple State Attorneys 

General, 49 out of 50, against an online—actually, that is a different matter—a dozen or so Attorneys General against an online 

loan servicer for illegally collecting money that consumers did not 

owe. We took action against a payday lender for overcharging 

servicemembers in violation of the Military Lending Act, and robosigning court documents. We took action against an auto lender for 

discriminatory loan pricing. And we partnered with 49 States in 

bringing an action against the Nation’s largest nonbank mortgage 

loan servicer for misconduct at every stage in the mortgage servVerDate Nov 24 2008 18:33 Jan 30, 2015 Jkt 091148 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 K:\DOCS\91148.TXT TERRI
9 

icing process. Yesterday, we announced a resolution with the Justice Department and 49 of 50 States against another large mortgage loan servicer that will put $500 million in relief back to consumers across this country in all of your districts. 

In January, mortgage rules that the Bureau issued to implement 

provisions of the Dodd-Frank Act took effect, establishing new protections for homebuyers and homeowners, mentioned by a number 

of you in opening statements. During the reporting period, we also 

issued another major mortgage rule mandated by Congress: a final 

rule to consolidate and improve Federal mortgage disclosures 

under the Truth in Lending Act and the Real Estate Settlement 

Procedures Act, which we have called, ‘‘Know Before You Owe.’’ We 

also issued an Advance Notice of Proposed Rulemaking on debt collection, asking the public in-depth questions about a range of 

issues relating to the debt collection market, which is the Bureau’s 

most frequent source of consumer complaints. 

To promote informed financial decision-making, we have continued providing consumers with online resources, including the 

AskCFPB section of our Web site, where we have the answers for 

more than 1,000 frequently asked questions. 

A premise at the heart of our mission is that consumers should 

be treated fairly in the financial marketplace and that they deserve 

a place that will facilitate the resolution of their complaints when 

that does not happen. As of June 1, 2014, the most up-to-date numbers are that we have now received nearly 375,000 consumer complaints on credit reporting, debt collection, money transfers, bank 

accounts and services, credit cards, mortgages, vehicle loans, payday loans, and student loans. 

The progress we have made has been possible thanks to the engagement of hundreds of thousands of Americans who have used 

our consumer education tools, submitted complaints, participated 

in rulemakings, and told us their stories through our Web site and 

at numerous public meetings from coast to coast. We have also benefited from an ongoing dialogue and constructive engagement with 

the institutions we supervise, as well as with community banks 

and credit unions, with whom we regularly meet. 

Our progress is also thanks to the extraordinary work of the Bureau’s own employees—essential, dedicated public servants of the 

highest caliber who are committed to promoting a fair consumer financial marketplace. The Bureau’s employees are our greatest 

asset. 

Their well-being is the reason I was personally troubled and take 

very seriously the concerns that you have raised about the Bureau’s work environment. That is why we took broad and decisive 

action to remedy issues related to our performance rating system. 

After our analysis showed ratings disparities across a wide range 

of employee characteristics, we negotiated with our union to discard the system, announced that we would adjust past compensation, and agreed to a joint working group with our union to design 

a new system. By self-correcting and self-remediating disparities in 

our own performance ratings, we are holding ourselves to the same 

standard we expect from the industries we oversee. 

I have also elevated our Office of Minority and Women Inclusion 

(OMWI) to work directly out of my office and tasked its leader, StuVerDate Nov 24 2008 18:33 Jan 30, 2015 Jkt 091148 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 K:\DOCS\91148.TXT TERRI
10 

art Ishimaru, with conducting Bureau-wide listening sessions to 

hear directly from our employees about their experience with 

equality and fairness. We have also instituted further mandatory 

Equal Employment Opportunity (EEO) training for all managers. 

We will continue to work on creating an organization that consciously embraces diversity. 

Mr. Chairman, Ranking Member Waters, on all these issues, I 

appreciate your active oversight and I believe it improves our agency. I also want to be careful about protecting rights to privacy and 

due process of our employees, and so today I will try to respect 

their rights by avoiding any detailed discussion of pending personnel actions or individual EEO cases that are fundamentally private matters in this public hearing. We are glad to provide the 

committee with closed-door briefings as desired, and as we have 

done. We take all such allegations seriously and will continue to 

seek to resolve any of these issues through the appropriate channels. 

Every day, my colleagues at the Bureau do great work to accomplish the goals of renewing people’s trust in the marketplace and 

ensuring that markets for consumer financial products and services 

are fair, transparent, and competitive. These goals not only protect 

consumers, they also support honest businesses that compete fairly, and they improve the stability of our economy as a whole. 

Thank you. I look forward to your questions. 

[The prepared statement of Director Cordray can be found on 

page 68 of the appendix.] 

Chairman HENSARLING. Thank you, Director Cordray. 

The Chair now yields himself 5 minutes for questions. 

Mr. Director, it is no secret that you and I have had both public 

and private discussions about the accountability of your agency. I 

look again at the cost, the spiraling cost, of the office renovations. 

I look to the national debt clock to my left and my right. I think 

a lot about this issue, and I think a lot about how it impacts my 

children, particularly when I gaze upon them. 

So, the last time you were here, you stated that the cost of this 

building, I believe, was less than the figure I had, but now the 

most recent GSA cost is $139 million-and-change; a $22 million 

cost to temporarily sublease space from the GSA while the renovations take place; $13 million, other costs associated with the temporary 3-year occupancy of your temporary space at One Constitution Square—this is from your documents; $339,000 to move to the 

temporary space; $9,278,000 to pay Skidmore, Owings & Merrill for 

the renovation. 

By my math, this now adds up to $184 million on a building that 

you do not own. Do you agree or disagree with the math? 

Mr. CORDRAY. A couple of things. 

First of all, the government does own that building. And if it is— 

Chairman HENSARLING. I understand that. My time is limited, 

Director Cordray. If you don’t believe the math, if you disagree, 

just please tell me that you disagree. 

Mr. CORDRAY. What I would simply say is that there are numbers about the cost of construction to renovate the building, which 

has been our previous focus. There are also attendant costs now 

11 

that we will have to and have, in fact, moved out of the building 

so the construction can be speeded up and therefore more— 

Chairman HENSARLING. I understand that, Director Cordray. 

Let me ask you about a couple of specific costs. Again, these 

come from public documents that have been filed. So, with taxpayer money—you do agree it is taxpayer money, do you not, that 

you are spending? 

Mr. CORDRAY. I would say that I have children, too, and I care 

about the debt, just as you do, for the same reasons. 

Chairman HENSARLING. I just asked, do you agree it is taxpayer 

money, Mr. Director, that you are spending? 

Mr. CORDRAY. It is Federal— 

Chairman HENSARLING. Okay. 

Mr. CORDRAY. —Government money. We come from the Federal 

Reserve, as you know. 

Chairman HENSARLING. Okay. So it is difficult for you to say— 

Mr. CORDRAY. It is American money. 

Chairman HENSARLING. —it is taxpayer money. 

Mr. CORDRAY. I don’t know whether ‘‘taxpayer’’ is the right term 

or not, but it is the money of Americans. 

Chairman HENSARLING. Oh, I assure you those who pay the 

taxes feel it is the right term. 

And so now, what I see—and I, admittedly, have not visited your 

building. I have visited some Federal buildings. But I don’t know 

how many have ‘‘a shady tree bosque, an elevated timber paved 

porch covered by dark-bronze-color trellis, an illuminated limestone 

seat wall, a raised water table flowing over a waterfall of naturally 

split granite, and a four-story interior glass staircase.’’ 

Now, the last time you were here, Mr. Director, you yourself had 

a lot of angst about this process, and you said, I believe—and I 

don’t have your quote right in front of me—that you were not finishing out an opulent space. I don’t know how many other Federal 

buildings have these features. Clearly, this is something which is 

within your power to say ‘‘no’’ to, to at least symbolically tell the 

American taxpayer you understand that it is their money. 

Mr. CORDRAY. I think every halfway-functioning shopping mall in 

America has the kind of features you describe. That is puffing by— 

Chairman HENSARLING. It is their money, it is not— 

Mr. CORDRAY. —people trying to work through the permit process. 

Chairman HENSARLING. —taxpayer money, Mr. Director, though. 

That is my point. I don’t know, do other Federal buildings—I 

haven’t seen a waterfall. 

Mr. CORDRAY. Come see the building. It is a dump. You want to 

come see it? Congressman McHenry has been there with his staff. 

I would invite— 

Chairman HENSARLING. Well, apparently, it is— 

Mr. CORDRAY. —each of you and your staff to come. 

Chairman HENSARLING. —not going to be a dump after you finish with your granite waterfalls— 

Mr. CORDRAY. Come see the building. 

Chairman HENSARLING. —and your tree bosque. That is really 

the point, isn’t it, Mr. Director? 

12 

Let me move on, then, to a different point. I know you were 

aware, clearly aware, of the testimony that Angela Martin presented before this committee. One of the things she testified to as 

part of her testimony was that on the evening of August 7, 2013, 

you called her and told her to have her attorneys ‘‘back down.’’ 

First question: Did you call her on the evening of August 7, 

2013? 

Mr. CORDRAY. I have had a number of conversations with Ms. 

Martin over the course of her time at the Bureau. We are friends 

and colleagues. I helped hire her. We have talked about, at times, 

her different situations, and I have always been one— 

Chairman HENSARLING. Mr. Director, I will give you a chance to 

give some context, but can you first answer the question? You have 

certainly had an opportunity now to review the matter. Did you 

call her on the evening of August 7, 2013? 

Mr. CORDRAY. I have had a number of conversations with her. I 

don’t dispute any particular conversations. My goal was to productively resolve her matter— 

Chairman HENSARLING. So you don’t dispute— 

Mr. CORDRAY. —and we have been doing so. 

Chairman HENSARLING. —calling her on August 7, 2013? 

Mr. CORDRAY. I don’t know offhand whether I did or not, but I 

certainly believe that I did if she says so. 

Chairman HENSARLING. Do you agree or disagree that at that 

time, you told her to have her attorneys back down? 

Mr. CORDRAY. I simply wanted to have Ms. Martin reach a productive resolution of her complaint, which we did do so within a 

matter of a couple of weeks. That later was reopened. We have now 

resolved it again. 

I want her to have a good position at the Bureau where she can 

do good work for consumers. That is what she testified she wants. 

I was heartened to hear that. That is what I want, as well. 

Chairman HENSARLING. She used the phrase ‘‘back down,’’ Mr. 

Director. Did you tell her to have her attorneys back down? 

Mr. CORDRAY. I don’t recall the conversation. But I wanted her 

to have a productive resolution. I believe that is what she wanted, 

and I think it is what she has wanted. And I am glad to see that 

we are now achieving that. I think she will make a big difference 

for consumers. 

Chairman HENSARLING. The time of the Chair has expired. 

The Chair now recognizes the ranking member for 5 minutes. 

Ms. WATERS. Thank you very much, Mr. Chairman. 

Mr. Cordray, we asked the chairman and the Members on the opposite side of the aisle many times to allow you to come before this 

committee to discuss the allegations of discrimination, et cetera. 

They did not do that. They chose, rather, to go the subpoena process, to somehow try and emerge in this problem with the description or definition of people who really are going to fight for employees who are discriminated against, et cetera. 

We don’t want to see this used as a political football. Take the 

rest of the time that I have and tell us how you have managed this 

problem. 

Mr. CORDRAY. This has been active oversight by this committee 

and the subcommittee. I always appreciate the oversight. SomeVerDate Nov 24 2008 18:33 Jan 30, 2015 Jkt 091148 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 K:\DOCS\91148.TXT TERRI
13 

times it can be painful to point out shortcomings of ours, and that 

has occurred here. It is also an opportunity for us to face those 

frankly and squarely and attempt to do better, and that is what we 

have done and are doing. This oversight has led us, in particular, 

to recognize that a performance management system that we put 

in place that was undoubtedly overly ambitious for an agency that 

was just starting up and was partially staffed, did not work well 

for us and did not work well for employees. I heard complaints 

about it all along on a variety of scales. 

We have determined that it categorized employees differently on 

a disparate-impact basis among different categories of employees. 

That was not appropriate, in my view. We have now discarded that 

system and are working with the union in negotiations. We will 

have a new system for the coming 2 years, and we will work with 

the unions on a long-term solution to this. 

In addition, it felt to me that employees who were harmed by the 

previous system were entitled to be squared up for what should 

have been the treatment of them, and that resulted in remediation. 

Those were big steps to take. Other agencies have had similar 

issues and have resolved them similarly but often after long legal 

processes and drawn-out legal processes. We remediated this quickly because we thought it was the right thing to do and it was important for us to do that. Broader than that are issues of culture 

at the Bureau, and these are things that are very top-of-mind for 

me and personally engaged in going forward. 

Stuart Ishimaru, whom you know, former EEOC Commissioner, 

a very strong figure, is our head of the Office of Minority and 

Women Inclusion. He has been elevated to directly work with me 

on these issues, and he is engaged across the Bureau in understanding how people may be affected by culture, job opportunities, 

promotions, and the like. That is an ongoing investigation. We also 

are retaining a third-party consultant who will help us focus on 

these issues going forward. 

Frankly, as I look back, we were a start-up agency. We still are, 

in many respects. We were ambitious in what we were trying to accomplish. We tried to do too much and put a lot of pressure on our 

employees, and that created various issues and problems. I take responsibility for that. It is important for us to understand and fix 

those things going forward. I am dedicated to doing so. I know you 

will have me back repeatedly to ask about our progress, and I will 

be happy to provide updates on that progress. And I expect you will 

find that we will make significant progress. And that will be good 

for the Bureau and good for its employees, which is ultimately my 

goal. I want everybody at the Bureau to have a working environment in which they can do their best work on behalf of American 

consumers. In spite of all the obstacles, they have done extraordinary work in the first 3 years of the Bureau, and I am confident 

they will continue to do extraordinary work. The people I am proud 

of are the people who work every day at the Bureau and who work 

hard to stand up for American consumers. And it is a necessary 

role, and it is an important role. And I appreciated the chairman, 

in his opening, recognizing that consumer protection is very important for Americans, who, after all, are constituents in each of your 

districts and who need someone standing on their side to see that 

14 

they are treated fairly in the financial marketplace. That is what 

we will continue to do. And the oversight of this committee, painful 

as it has been at times, has been very helpful to us and, I believe, 

will be a benefit to our employees. 

Ms. WATERS. Thank you very much. 

And as I understand it, you have included the employees themselves in getting involved in helping to carry out the kind of rules 

and oversight within the agency. Would you tell us a little bit more 

about that? 

Mr. CORDRAY. Yes, very much so. And this may have been something we neglected, looking backwards. 

We did not have a union until last year. The union has actually 

forged a very productive working relationship with us. They were 

adamant that the performance management system needed a fundamental overhaul. I had come to agree with that, myself. That is 

where we arrived in the bargaining negotiations. And they have 

had a strong voice in resolving some issues that were causing pain 

to our employees, such as issues around office space, issues around 

travel, and other various complaints we have heard. 

I do want to stress, and I think it is important, our annual employee survey, which actually, contrary to some of this scrutiny, indicates a group of employees who have high morale, higher than 

the average government agency, and a strong dedication to the 

mission of the agency. 

The Bureau’s employees are the ones who do the extraordinary 

work every day. I do a limited amount of work; I do as much as 

I can, but I am just one person. They do all this work—putting $4 

billion back in the pockets of consumers, making sure that the 

mortgage market is safe but not overdone, and that access to credit 

is respected, as a number of you have indicated is important to 

you. That is the important work of the agency, and it is done not 

by me but by close to 1,400 people of whom I am very proud. 

Ms. WATERS. Thank you. I yield back. 

Chairman HENSARLING. The Chair now recognizes the gentlelady 

from West Virginia, Mrs. Capito, the chairwoman of our Financial 

Institutions Subcommittee, for 5 minutes. 

Mrs. CAPITO. Thank you, Mr. Chairman. 

And thank you, Mr. Director. 

I would like to go to the issue of the collection of the data, the 

personally identifiable information (PII) data. 

In the Federal Register, on April 16th, I believe, of this year, it 

was noted that certain data was going to be collected in conjunction 

with the CFPB and the FHFA. And last week, we had a hearing 

where Congressman Westmoreland from Georgia read through the 

extensive list, and it was quite extensive. 

I would like to ask you about just a couple of those, although I 

am sure my colleagues will have other questions. 

First of all, religion is mentioned as one of the pieces of data that 

is going to be collected on individuals. What kind of relevance does 

that have to why we are collecting this data? 

Mr. CORDRAY. I would like to say two things. One is a general 

point, and one is specific to that point. 

The general point is: What people are reading from, and it has 

been somewhat misunderstood and misinterpreted, is a bureauVerDate Nov 24 2008 18:33 Jan 30, 2015 Jkt 091148 PO 00000 Frm 00018 Fmt 6633 Sfmt 6633 K:\DOCS\91148.TXT TERRI
15 

cratic item known as a statement of records notice (SORN). It calls 

out what may or may not occur about collections of information and 

the effect on privacy, so it was overstated in terms of what the National Mortgage Database actually will be. 

I am going to assure you today and commit to you, as I did to 

the Senate Banking Committee last week, that we don’t have any 

purpose in collecting religion. That will not be in the National 

Mortgage Database, I can assure you of that. 

Mrs. CAPITO. Okay. So that information will not be collected. 

Mr. CORDRAY. What is happening is— 

Mrs. CAPITO. Well, that is a ‘‘yes’’ or ‘‘no’’ right there. 

Mr. CORDRAY. It will not be in the National Mortgage Database. 

Mrs. CAPITO. So— 

Mr. CORDRAY. What we have to—let me try to explain this, because there is a gap there that I want to make sure you understand. In order to get information, we have to buy it from commercially available sources. Whatever we buy is an off-the-shelf thing 

that has things in it. Then we work with the credit reporting agency, not employees of the Bureau or FHFA, to de-identify that information and take out things like name, address, and Social Security 

number. Religion will be among the things taken out. None of our 

employees who work with the database will have any of that information available. We don’t need it, and it would not be appropriate. 

And that is my commitment to you. 

Mrs. CAPITO. Okay. So that is kind of an in-between answer 

there. 

What about education and employment records? It says, 

‘‘records.’’ Does that mean hiring, firing, transcripts of educational 

achievement? 

Mr. CORDRAY. I don’t believe any of that will be in the National 

Mortgage Database, but I would be happy to have staff get back 

to you on those specific points. Again, the information will be deidentified before it is poured into the National Mortgage Database, 

and our employees will only have access to the de-identified information. 

Mrs. CAPITO. Okay. 

Life events in the last few years and financial events in the last 

few years—how does that get collected if people don’t self-identify 

what a life event would be? Is that— 

Mr. CORDRAY. Again, I don’t believe that is necessarily— 

Mrs. CAPITO. —a thing you can purchase? 

Mr. CORDRAY. —any of that, anything about you or me personally is going to be part of this mortgage database. But I am happy 

to have staff follow up with you to give you very specific answers 

on— 

Mrs. CAPITO. Who makes the determination of what is de-identified? 

Mr. CORDRAY. It is, frankly, a fairly standard thing that is done 

throughout the government. Particular identifiers that would tell 

us that it is my information or your information such as name, address, Social Security number, phone number, and bank account 

numbers are stripped off. That is typically what we do with all of 

our databases, because we are not interested in knowing what Representative Capito was doing for dinner last night or any of that 

16 

spending information. Private companies care a lot about that, and 

that is what they home in on. 

We are interested in knowing, what is the pattern of how consumers are affected in the marketplace? And de-identified information is perfectly sufficient for those purposes. We don’t need and we 

don’t want more. The other stuff potentially gives us problems and 

doesn’t advance our mission. 

Mrs. CAPITO. Okay. 

One last question: How many people would have access to this 

database within the CFPB and the FHFA? I would assume that 

numerous— 

Mr. CORDRAY. It would be a limited number of people. My understanding is that the National Mortgage Database will not be used 

for enforcement or supervision purposes. It is a research tool. 

It is designed to close a gap that Chairman Bernanke described 

several times both publicly and to me, and Chair Yellen has reinforced. We didn’t know enough about the mortgage market before 

the crisis. If we had, we might have headed off some aspects of the 

crisis. 

That blind spot was enormous—enormous cost to the American 

people. I know your constituents and my colleagues and friends 

and neighbors, people lost jobs, people lost homes. If we had known 

more about what was happening in the mortgage market, we might 

have headed that off. 

This information is very crucial for those purposes. 

Mrs. CAPITO. Okay. 

And finally, I am going to make a quick comment, because I just 

have 20 seconds left. I think that you can certainly appreciate the 

data security issues that we are— 

Mr. CORDRAY. I do. 

Mrs. CAPITO. —dealing with here, the most publicized one being 

the Target breach, but— 

Mr. CORDRAY. Yes. 

Mrs. CAPITO. —others, where millions and millions of records 

have been compromised. And that is something that I think—if you 

are going to cast a wide net, which you obviously are, to collect everything and then only take a few things, I still think it doesn’t 

give us a measure of comfort, not just about the security issue but 

the usage of the information once we get it. 

But thank you. 

Mr. CORDRAY. I am happy to try to continue to work with you. 

I know you and some of your colleagues and those in the Senate 

are very concerned about this. 

GAO is looking at our data collection efforts. They will give us 

a thorough account of that, I am sure, and we are glad to learn 

from it. We don’t want to have these problems either. It is not 

going to be helpful to my agency. 

Chairman HENSARLING. The time of the gentlelady has expired. 

The Chair now recognizes the gentlelady from New York, Mrs. 

Maloney, the ranking member of our Capital Markets Subcommittee, for 5 minutes. 

Mrs. MALONEY. Thank you very much, Mr. Chairman, and Ranking Member Waters. 

17 

And welcome, Director Cordray. This is your fifth semi-annual 

report to Congress. And I believe your agency has a remarkable 

success rate in helping consumers and veterans, our servicepeople, 

not only on large policy decisions but on individual problems, processing truly tens of thousands of consumer complaints. So I want 

to recognize that good work. 

And I want to focus on the work that you are doing now on prepaid cards. I read in the paper that you are conducting a review 

and will be issuing a report on prepaid cards. And I went to the 

Internet when you put up two suggested forms on how to disclose 

information. I am a big fan of number one. Model number one, I 

think, is far clearer. 

But I understand it was out for comment. Comment closed in 

April. Could you give us some feedback on what you learned from 

this field testing of better disclosure on prepaid cards so that consumers understand what they are buying and the services they are 

getting? 

Mr. CORDRAY. I feel like we got meaningful additional feedback 

just there. I will put you down as a fan of model number one. We 

will add that to our data. 

What we are doing there is, prepaid cards are a growing, fastgrowing, explosively growing market for a lot of Americans and, 

particularly, a lot of low- and moderate-income Americans, who 

often will have benefits loaded by State and local governments and 

the Federal Government onto these cards. And then they can be 

used, if they are general-purpose reloadable cards, as a kind of a 

bank account for people who don’t necessarily have access to the 

banking system. 

What people don’t understand right now is those cards are not 

protected by any of the consumer financial protection laws currently. They are a new product. That is a hole in the fabric. We 

will be not just doing a report, but we are going to be putting out 

regulations that will provide new protections for those cards. 

One of the things we are trying to figure out, as you noted, is 

when you have a very small package of a prepaid card—like you 

see at CVS and places where you buy them off the rack—how do 

you package the kind of disclosures consumers need? It is a very 

tricky and difficult thing because there is limited real estate available for that. And the rest of the disclosures may be inside the 

packet, so you don’t see them all. 

Mrs. MALONEY. I understand that. It is not helpful to have the 

disclosure inside, the fees inside. I hope you are being—will you address that in your rules and make— 

Mr. CORDRAY. We will be addressing it. 

Mrs. MALONEY. —sure consumers can see that? 

Mr. CORDRAY. It is not as helpful, absolutely. And so that is why 

we are trying to create clear, straightforward, comparable applesto-apples disclosure so that people can look at different prepaid 

cards and get a good sense of the fees, the key fees. And that is 

work we are doing right now. 

Mrs. MALONEY. Another area is that two prepaid companies 

allow for overdraft. And I, for one, feel a prepaid card is money 

management for individuals. Let it be a prepaid card, not get into 

18 

credit and credit cards. So I am a fan of not allowing overdrafts on 

prepaid cards. 

Can you comment on that? Are you doing a study on that in any 

way? 

Mr. CORDRAY. I will note your comments on that. That is one of 

the issues that has come up quite a bit with respect to this rule. 

We are working through that, and I expect we will have a rule toward the end of summer. And that will be out as a proposal for 

public comment. Lots of people will have a say on that. But that 

is certainly one of the main issues that is being considered on these 

cards. 

Mrs. MALONEY. One of the areas that we worked together on was 

credit card reform. And this body passed a strong credit card reform act, which the Pew Foundation said saved consumers $10 billion a year, some economists said that it saved $20 billion—they readdressed their numbers down to $16 billion a year; still, that is 

a lot of money—by ending deceptive practices. 

And my question is, in your review of credit cards, how is it 

working? Are you still getting credit card complaints? Or is this an 

area that is working well for consumers and for the overall economy? 

Mr. CORDRAY. We actually now, under the reform law, are required to report to Congress each year on the effects of the CARD 

Act and what is going on in the credit card market. 

I would definitely give a huge thumbs-up to the work this Congress did on the CARD Act. It has protected consumers, saved 

them money, and made things much more transparent so that they 

can see on the front end what they otherwise got stuck with on the 

back end. 

Many of the things that Congress sought to accomplish have, in 

fact, been accomplished—not always the case with legislation, but, 

in this case, it has been good. And you can see it in the satisfaction 

surveys J.D. Power does of consumers. The respect and trust in the 

credit card market has steadily grown since the CARD Act was 

passed, and I do think that is a significant reason why that has 

happened. 

Mrs. MALONEY. Thank you very much. 

Chairman HENSARLING. The Chair now recognizes the gentleman 

from Alabama, the chairman emeritus of the committee, Mr. Bachus, for 5 minutes. 

Mr. BACHUS. Director Cordray, when you give us assurances that 

you are not going to use this information, like personally identifiable information, all we really have to go on is that in the Federal 

Register, your agency has asked permission to collect all this information. Isn’t that true? 

Mr. CORDRAY. Again, in order to have the information—unless 

we are going to go out and put a lot of burden on institutions by 

having them dig around and recreate new information—what we 

are essentially doing is we are buying off-the-shelf products, and 

then we are arranging to have a credit reporting agency de-identify 

that information before our employees can ever touch it, see it, and 

work with it. That is what is happening with the National Mortgage Database, and it is typically our process. 

19 

Mr. BACHUS. But what I am saying is, you are getting permission, you are asking for permission to collect all this information. 

I am not saying what you intend to do with it. You are collecting 

all this information. 

And the American people, and I think you will agree with me, 

are very concerned about their personally identifiable information. 

Mr. CORDRAY. And I am part of the American people. I am very 

concerned about it, too. 

Mr. BACHUS. At what point will all this come out—you are saying 

their religious affiliation, their languages spoken. At what point 

will it come out? After it gets to the agency or before it is ever— 

Mr. CORDRAY. Before any of our employees have any opportunity 

to access or work with that database. 

Mr. BACHUS. If it is going to be taken out, why not take it out 

and then send it to your agency? Let the people who have it take 

it out? 

Mr. CORDRAY. So— 

Mr. BACHUS. Wouldn’t that be— 

Mr. CORDRAY. —that is possible. We can potentially change some 

of this, but the way we set it up was a third party that deals with 

this kind of information all the time, a credit reporting agency, is 

the one taking it out. 

Mr. BACHUS. I understand that. What I am saying is, you are 

saying, ‘‘Give us this information, and we will take it out.’’ 

Wouldn’t it be a better approach to say, ‘‘Take all that out, and 

then send it to us?’’ 

Mr. CORDRAY. Look, it is simply a matter of cost. By the time it 

comes to us, before our employees can ever work with it or see it, 

it will be de-identified. That is the crucial thing. 

Mr. BACHUS. But the cost— 

Mr. CORDRAY. But I am happy to think further about the point 

you are raising. 

Mr. BACHUS. But removing all that information you promise us 

that you don’t want, you don’t need, you are not going to share, 

why even receive that information? 

Mr. CORDRAY. It is simply a matter— 

Mr. BACHUS. And I will say, if you ask permission, you may not 

take it out, but this regulation is going to be here until it is repealed. There may be another Director. 

And, also, what troubles me is that you have asked this permission. You said, where there is an indication of a violation or potential violation of law, whether civil, criminal or regulatory in nature 

and whether arising by general statute or particular program statute or by regulation, rule, or order issued pursuant thereto. That 

almost seems like any reason. 

The relevant records and the system of records may be referred 

as a routine use to the appropriate agency, whether Federal, State, 

local, tribal, foreign, or a financial regulatory organization, including FinCEN, and other law enforcement government entities, as 

determined by your agency and by FHFA to be appropriate. 

So you can share this information with any other government 

agency. And you may intend to scrub this information, but someone 

else, once it is received, may not. 

20 

And you say only a few people will have the ability to go in and 

see that. If we are talking about scrubbing 227 million mortgages 

alone, not to speak of the credit transactions of credit cards, we are 

talking about thousands of people who will have to be doing that. 

Mr. CORDRAY. Again, that will be done before the information 

comes to our agency, so any potential sharing will be the de-identified information. 

Mr. BACHUS. If it is done before you get it, why ask permission 

to receive it? Do you see my point? 

Mr. CORDRAY. I do. I think that is a fair point. And I would like 

to come back to you on that. 

Mr. BACHUS. Sure. 

Mr. CORDRAY. And there may be some different ways we can capture that. 

Mr. BACHUS. And let me say—I have 41 seconds. 

Mr. CORDRAY. GAO is also looking at this, and— 

Mr. BACHUS. Sure. And I would like to pursue that with you. 

Mr. CORDRAY. Yes. 

Mr. BACHUS. You know, participants in the auto financing industry, auto dealers, they keep asking for clarification on the use of 

disparate impact methodology being applied to vehicle finance. 

They still don’t have that, do they? You are enforcing a rule and 

they really don’t know what your methodology is. 

Mr. CORDRAY. There has actually been a lot of discussion with 

industry around this, and we have presented our methodology. 

There was a webinar with the Federal Reserve, where we and the 

Federal Reserve largely agreed on the methodology and presented 

to industry. We— 

Mr. BACHUS. Would you share that with us? 

Mr. CORDRAY. I believe we have. I know— 

Mr. BACHUS. Okay. 

Mr. CORDRAY. —the chairman has been very vigorous in oversight on this issue, and we have provided a lot of information. 

Mr. BACHUS. If you can just share your information to clarify the 

use of that— 

Mr. CORDRAY. I can say one more thing today— 

Mr. BACHUS. Sure. 

Mr. CORDRAY. —I know is of interest to both you and many others. We are working on a White Paper on the proxy methodology, 

in particular, that we expect to have out later this summer. We are 

continuing to try to respond on this issue to make sure people understand. 

Mr. BACHUS. Thank you. And, finally— 

Mr. CORDRAY. The industry works on this all the time on their 

own. 

Mr. BACHUS. Okay. Thank you— 

Mr. CORDRAY. They know this very well. They are trying to fend 

off private lawsuits. 

Mr. BACHUS. And thank you for the billions of dollars’ worth of 

refunds that you have gotten for the American people. I do appreciate that. 

Mr. CORDRAY. Thank you. 

Chairman HENSARLING. The time of the gentleman has expired. 

21 

The Chair now recognizes the gentlelady from New York, Ms. 

Velazquez, for 5 minutes. 

Ms. VELAZQUEZ. Thank you, Mr. Chairman. 

Mr. Cordray, thank you for your service, and welcome to the 

committee. 

Deceptive debt collection practices are becoming a major issue for 

consumers and servicemembers alike. Nearly one-third of consumer 

and 45 percent of servicemember complaints were associated with 

the debt collection industry. 

What is your agency doing to address this issue? And is there 

any outreach that you are doing today to inform consumers of their 

rights? 

Mr. CORDRAY. It is a great issue. It is an important issue. It is 

one on which we are actually receiving more consumer complaints 

than any other issue, interestingly. And we are trying to address 

it with all of our tools. 

So, just briefly, what we are doing: We have had a number of enforcement actions against debt collectors that we believe and found 

to have been violating the law. We have the ability to supervise 

and examine debt collectors now for the first time at the Federal 

level, and we are engaged in that process, which helps clean up a 

lot of violations and puts people on their toes. 

We have developed some consumer tools, such as sample letters 

that consumers can use if they believe they are being called and 

harassed at the workplace, which is not appropriate after the appropriate hours, other things, and exercise their rights. 

And, perhaps most important of all, we are embarked on a rulemaking process—we are in the early stages of it now—where we 

are going to be overhauling the rules that apply to the debt collection industry broadly, responding to a number of the types of concerns that you are raising. We also have heard from people all over 

the country, both consumer groups and industry, and also just regular folks that we talk to in our public hearings. 

Ms. VELAZQUEZ. Thank you. And the Dodd-Frank Act directed 

HUD to publish new information materials on the importance of 

presale home inspections. I understand that HUD is in the final 

stages of completing that process. With all the work CFPB has 

done to better inform consumers during the home-buying process, 

has there been any discussion about making similar home inspections literature available to new homebuyers? 

Mr. CORDRAY. First of all, I am pleased. HUD has been a great 

partner, and that is a great initiative that they are doing. I actually—I mentioned this before to this committee—worked on that 

issue at the State level years ago when I was in the Ohio Legislature, and it is very important. We are working together with HUD 

on lots of outreach information to consumers. They have some 

great substance and tools, and we are developing some, I think, 

great substance and tools, in particular, I want to say, around 

housing counselors. We have worked together to get information 

out to the public that I think will be very helpful to people, particularly in saving homes and also thinking hard about how to go 

about buying new homes. 

So, it is a good partnership. I have enjoyed working with Secretary Donovan. I believe he is now potentially on his way over to 

22 

OMB, and he will be a great partner there, and I am looking forward to the next HUD Secretary, whom I believe had a hearing 

yesterday, and we will work with him, as well. 

Ms. VELAZQUEZ. Thank you. 

Section 1071 of the Dodd-Frank Act requires banks and lenders 

to collect and report credit application data on small businesses as 

well as minority and women-owned businesses. Can you address 

recent criticism that collecting this information will be too onerous 

for banks and could lead to less small business credit? 

Mr. CORDRAY. Our strategy on this is twofold. First, we have a 

number of things Congress has required us to do, and one is to 

overhaul the Home Mortgage Disclosure Act (HMDA) database information. We have worked with the Federal Reserve. That will be 

moving over to us in the next several years, and we believe we may 

be able to build on that to then complete the requirements of Section 1071, the small business information, which will be potentially 

of great use to small businesses across the country. I also have 

been a little remiss. There is a new SBA Administrator in. I am 

looking forward to reaching out and working with her to see if we 

may be able to work together in scoping this out. 

But that is the sort of approach we are taking. I think it makes 

sense. And in the HMDA rules, we are looking for ways to streamline some of the data collection so it is easier for industry, and I 

think they are enthusiastic about what we are proposing in various 

respects, and we would like to be able to do the same here. We 

want to minimize burden if we can, but still accomplish the purposes of this statute. 

Ms. VELAZQUEZ. Do you have any sense as to when you expect 

to publish rules implementing this section? 

Mr. CORDRAY. The HMDA rules will need to come first. That is 

the sort of cart-and-horse order, I think, that works here, and then 

this will follow in turn. 

Ms. VELAZQUEZ. Thank you, Mr. Chairman. 

Chairman HENSARLING. The gentlelady yields back. 

The Chair now recognizes the gentleman from New Jersey, Mr. 

Garrett, the chairman of our Capital Market Subcommittee. 

Mr. GARRETT. Thank you, Mr. Chairman. 

And thank you, Director. 

The American public asks us in Congress, in Washington, to be 

prudent in our use of their tax dollars, and I believe all the banking regulators and other regulators in D.C. ask the institutions 

that they regulate to be prudent in their management of their operations as well. So let me just spend a minute or two on where the 

chairman initially began his questioning with regard to the lessthan-prudent handling of your operations and the spending of 

money on your headquarters. 

Correct me if I am wrong, but I don’t think I am on any of these 

numbers, the original estimate for the cost of the reconstruction of 

your building was $55 million, then it went up to $95 million. In 

May of this year, your legislative staff confirmed that the cost of 

demolition and reconstruction of your building would be $139 million. Your staff is correct on that, I assume, Director Cordray? 

Mr. CORDRAY. What you just described is a garble that we have 

seen repeated in many places, that this supposedly started off as 

23 

a $55 million project and now has ballooned into something other. 

That is not correct, and I tried to correct the record in the Senate 

Banking Committee last week and I will do it again here. 

Mr. GARRETT. What about— 

Mr. CORDRAY. That was never our estimate for the project. That 

was a placeholder budget number in the first year of what we were 

devoting toward the larger project. 

Mr. GARRETT. What are the numbers right now, then? Your legislative staff gave us in May, the cost of demolition, the construction 

of the building, at $139 million. That is what they told us. Is that 

correct? 

Mr. CORDRAY. I believe that is correct. 

Mr. GARRETT. Okay. 

Mr. CORDRAY. And an audit done of the building before the 

CFPB existed indicated that the work done on it at that point required $107 million worth of work, and there is actually more that 

has deteriorated since. 

Mr. GARRETT. Right. So on top of the $139 million, you have the lease of the temporary space of $22 million; the top of that is a utilities and securities for $13 million, and the combined amount on 

the three task orders already is $9.2 million; some other things for 

about $400,000. So you add it all up, and right now we are at $184 

million, give or take. This is from your staff and from another 

place. That is a ballpark figure? 

Mr. CORDRAY. Again, that is including a lot of things that are not 

cost to construction. They are other things. The reason— 

Mr. GARRETT. This is what it would cost to go from the dump 

that you are in to a building that you just told the Senate, even 

after we spend this money, in your own words, is still not optimal. 

Is that correct? 

Mr. CORDRAY. I would say it will be good, not optimal. That is 

correct, yes. 

Mr. GARRETT. Right. Okay. 

In January, you told the chairman the number that you were looking at was around about $70 million at that point in time. That 

was your testimony here for the cost. Maybe you were just basing 

that off of the $55 million as the placeholder. Be that as it may, 

we are now at— 

Mr. CORDRAY. I don’t recall that. I would be interested in seeing 

that excerpt. 

Mr. GARRETT. Okay. Be that as it may, we are now at $184 million. Depending on how you break down the cost of that on a 

square-footage cost, it is more than double of what any commercial 

luxury property in D.C. is. Do you think that is a prudential way 

of handling this matter? 

Mr. CORDRAY. But now you are into apples and oranges. That is 

not a square-footage cost. The construction is the square-footage 

cost. You are including things—we moved out of the building in 

order to avoid additional costs that would have occurred if we had 

renovated in place. That was going to be more expensive. That was 

what was determined. So we are attempting to be prudent here 

even though— 

Mr. GARRETT. This is a $153 million building. Even if you stave 

off $10 million or $20 million here for your relocation costs, you are 

24 

basically taking a $153 million building and spending around $153 

million to refurbish it and make it into a nothing more than optimal building. 

Mr. CORDRAY. You want me to describe the condition of the 

building? We would be glad to have you come in— 

Mr. GARRETT. No, I— 

Mr. CORDRAY. If you can take an hour, we will have you come 

and take a tour. I would love to have you do that. 

Mr. GARRETT. Yes. So do you think it was a bad decision by either you or your predecessors in 2011 that when they entered into 

a 20-year as-is contract on this building, knowing that this building 

is a dump, why would anybody from your agency enter into such 

a contract? And would any of the agencies that you have oversight 

of be chastised for entering into contracts like this? 

Mr. CORDRAY. The rent that we are paying takes account of the 

fact that we are responsible for the renovations. That is a somewhat unusual arrangement—usually the landlord would renovate, 

and the tenant would not—but our rent was calibrated off of that. 

So over the 30 years of the occupancy agreement, it comes out to 

be appropriate rent for essentially a class B building, which is 

about what we will manage to be. The other thing is it is a government-owned asset. We could just let it deteriorate into a white elephant kind of— 

Mr. GARRETT. If you had this to do all over again, if you were 

just coming in, would you have done the exact same thing, rent a 

building like this and then spend $184 billion to redo it, or would 

you do something different? 

Mr. CORDRAY. I think I probably would. I think it is still the 

right answer. But, there are obviously challenges. And if I could describe— 

Mr. GARRETT. Okay. Thank you. 

Mr. CORDRAY. Do you want me to describe the condition of the 

building? 

Mr. GARRETT. No. My time is up. I think— 

Mr. CORDRAY. Feel free to come see it. We would like that. 

Mr. GARRETT. Mr. Chairman, I think that is probably the wrong 

answer to hear that a bad decision that was made back in 2011 or 

2010 would be replicated today. 

Chairman HENSARLING. The time of the gentleman has expired. 

The Chair now recognizes the gentleman from Massachusetts, 

Mr. Capuano—no, apparently the Chair now recognizes the gentleman from New York, Mr. Meeks, for 5 minutes. 

Mr. MEEKS. Thank you, Mr. Chairman. 

And I want to first thank you, Director Cordray, for the great 

work that you are doing at the CFPB on behalf of, of course, everybody in the Fifth Congressional District, but also I think for working Americans, our veterans, our college students, the elderly, 

women and minorities, and the list can continue. 

I was just informed that, for example, in just 2 years, your en- forcement actions have resulted in almost $4 billion directly refunded to more than 12.6 million consumers and servicemembers. 

That, to me, is really remarkable, and we want to thank you for 

that kind of work, as well as your balanced approach that you have 

taken in various rules that the Bureau has established. 

25 

You have, I believe, listened very carefully and addressed many 

legitimate concerns that were brought to your attention, and I just 

want to encourage you to continue in that spirit with the goal of 

achieving greater small business and nonbank lenders’ participation in advisory councils and greater transparency in how these 

councils work and dissipate information. 

And I also just want to make sure that I mention that I welcome 

your continued resolve and commitment to get to the bottom of the 

internal management issues that had surfaced recently, and I trust 

that you are going to do that. 

My first question is this: I always had some concerns about the 

effect of the QM rules, especially as they deal with minority borrowers and the ability to borrow, et cetera. I would just like to get, 

6 months now, 6 months after the rule had become effective, could 

you give me your thoughts on the effects of the QM rule particularly for— 

Mr. CORDRAY. Sure. We are a few months in now, and we are 

starting to get some data. We are working very closely with groups 

like the National Association of REALTORS® which have been 

eager to provide data and let us see exactly what is happening in 

the marketplace, mortgage bankers. 

There was a great article in the American Banker yesterday that 

I thought encapsulated it well, and what it indicated was that the 

QM rule was having a negligible effect on access to credit. More 

than 95 percent of the mortgages being offered are, in fact, QM. 

And, in fact, they said 6 months later, has this really made a negative difference? They couldn’t tell. There were a lot of people quoted 

around the country, including some who said they make hundreds 

or thousands of mortgages, and maybe only a few dozen have been 

affected. So, look, we tried hard to strike the balance in a way that 

was not going to undermine the mortgage market. I think we have 

done so. 

I think people across the spectrum and industry have recognized 

that we have done so, particularly the patch for Fannie Mae and 

Freddie Mac in conservatorship has made an enormous difference. 

But we are eager to hear more, and if there are unintended consequences or unexpected results, we want to know about them and 

see what we can do to address them. 

Mr. MEEKS. On that line in dealing with the American Banker, 

I think that they made in their assessment that it was largely due 

to FHA and GSEs that can still largely, they said, I think, operate 

under approved exemptions. 

Mr. CORDRAY. It can. 

Mr. MEEKS. I was wondering, how do we prepare for when the 

FHA and GSEs begin to retract in the market participation? 

Mr. CORDRAY. That is a really great question. One of the things 

we had to do when we wrote the mortgage rules was we didn’t 

know exactly what Congress was going to do about the GSEs or 

about the FHA program, and so we tried to create some latitude. 

Congress eventually will settle those issues, not us, and we had to 

write a rule that could be flexible to take account of whatever Congress would do. That is ultimately up to you all, but I think our 

rules have allowed Congress to have the latitude to act, while continuing to operate. And I think people have recognized that was a 

26 

very important step we took, and it has really helped those rules 

be much more successful than they might have been otherwise. 

Mr. MEEKS. Let me go on to another question in the little time 

I have left, because your job is really tough, and I know it is not 

always easy to get it right. On the one hand, we know that close 

to 70 million Americans are underbanked and don’t have access to 

the traditional banking system and therefore sometimes rely on 

less-regulated entities for financial services; and on the other hand, 

they are also more vulnerable and are more easily taken advantage 

of by these less-regulated entities. 

So how do we balance access to credit, which for many equals access to opportunities, versus protecting Americans from predatory 

financial products and services? 

Mr. CORDRAY. That is a central core issue for the Bureau now. 

Our Office of Financial Empowerment is very focused on that issue. 

We are working with the FDIC, who has had a lot of focus on the 

unbanked and underbanked issues. The prepaid card rule that we 

are developing will be very important in that respect. And I think 

some of the other work I see going on around the country—the 

New York attorney general yesterday announced an initiative with 

Capital One with respect to people being barred from the checking 

account system. These are things that are important for us all to 

work on together and make sure that more Americans can have access to the banking system, which is a great way to protect them, 

or if they don’t have access to the banking system, for whatever 

reason, including that they just don’t want to be in a bank, they 

have tools and opportunities available to them that can work for 

them. 

We had a field hearing in New Orleans last week on mobile payments. That is a potential promising technology as well, and we 

want it to be a pro-consumer technology. 

Mr. MEEKS. Thank you. 

Chairman HENSARLING. The time of the gentleman has expired. 

The Chair now recognizes the gentleman from Texas, Mr. Neugebauer, the chairman of our Housing and Insurance Subcommittee. 

Mr. NEUGEBAUER. Thank you, Mr. Chairman. 

Director Cordray, I think we have been talking about this data 

collection, and so, I guess, one of the questions is, where are you 

getting this data from? 

Mr. CORDRAY. We buy it from the same commercial sources that 

everybody else buys it from. 

Mr. NEUGEBAUER. What are the names of those vendors? 

Mr. CORDRAY. I don’t recall offhand, but I would be happy to get 

those to you and to your staff. 

If you are talking about different types of information, there are 

times when we go directly to institutions and make efforts to do 

voluntary collections from them, and work with them to try to 

make sure those are not unduly burdensome. There are also times 

where we collect information through the supervisory process. So, 

there are lots of places where we can get information, and we try 

to be careful about handling it carefully. 

Mr. NEUGEBAUER. When you testified before, one of the things I 

pointed out is that I am not sure who is going to win the race on 

who is collecting the most data, NSA or your agency. Now that we 

27 

have restricted the amount of data, NSA, I think, is going to win 

that contest. 

I think the question that comes to my mind is, you are tracking 

millions of mortgages, 990 million credit card accounts, and the 

question begs: Why are you collecting this much data when, if you 

say it is just for research purposes, most researchers take 

samplings, and it looks like to me it would make it more cost-effective to take a sampling of data that you are going to have to redact. 

But when you talk about the number of records that you are 

talking about collecting, and redacting those kind of records, and 

making sure that the personal identifiers are not there, it appears 

to me there is going to be a huge cost for something. And so the 

research answer doesn’t really seem to resonate here, or you 

wouldn’t be collecting that amount of data. 

Mr. CORDRAY. Yes, and you raised this point with me in a private 

conversation we had some months ago, and it was a good point. We 

went back and thought further about it, and I think we made more 

progress on it. The National Mortgage Database that we are talking about, we are only going to collect data on 5 percent of mortgages. We are going to do a sampling, just as you said, for the reasons you said, and we can collect a limited amount of information 

for that purpose. 

On credit cards, there are times where when we go to institutions, and they tell us, look, it would just be easier for you to tell 

us to give it all to you rather than making us bear the cost of making some sort of slice of it, and it may or may not be objectively, 

statistically unbiased, et cetera. Sometimes they tell us it is easier 

for them just to give us what we are asking for rather than do a 

lot of work to sort through it. On the National Mortgage Database, 

we are just doing a sampling, and limiting ourselves to 5 percent. 

If it is a reasonable sample, that will do the job, just as you had 

indicated to me when we had this discussion. We will continue to 

try to do that where that is sufficient. 

Mr. NEUGEBAUER. The other issue which continues to be, I think, 

of great concern in some of this collecting of huge amounts of data 

is the security of that data. And at a presentation, I think on June 

11, 2003, Bob Avery, the FHA’s Project Director for the National 

Mortgage Database stated the following: ‘‘We believe that we created a public data set, as wide a set of users as possible, so that 

there are major challenges in keeping this data secure. He says 

that it is easy to reverse-engineer and identify the people in their 

database. 

And I know you keep hanging your hat on, hey, we are redacting 

the personal identifiers, but here is the guy who is overseeing the 

project, and he says it is very easy to reverse-engineer, so that 

doesn’t give me a lot of confidence. 

Mr. CORDRAY. But that is a quote. There is a longer passage 

there in which he says it could be easy, but there are things we 

are doing to be more productive. They had the same quote over in 

the Senate and made the same point. If you read the whole passage, you will see we are all aware of the problem, we are concerned about the problem, we recognize the risk it could pose to our 

agencies if we mess that up, and we are working hard to avoid 

those results. So, it is a challenge. I don’t want to in any way miniVerDate Nov 24 2008 18:33 Jan 30, 2015 Jkt 091148 PO 00000 Frm 00031 Fmt 6633 Sfmt 6633 K:\DOCS\91148.TXT TERRI
28 

mize that. It is a challenge that I am as concerned about as you 

are, because the reputation of our agency is on the line, and we are 

working hard to try to address it. And I believe if you look at Mr. 

Avery’s full statement, that is his outlook as well. 

Mr. NEUGEBAUER. A lot of the financial institutions that you regulate have to issue privacy statements to people to let them know 

that, hey, we have a lot of personal data on you. Are you giving 

the American people a privacy statement about all of the data that 

you are holding on them? 

Mr. CORDRAY. Actually what we are trying to do is minimize the 

burden on industry of those annual privacy notices, and some of 

your colleagues have been pursuing legislation on this. We have 

proposed a regulation to accomplish the same purpose, and I think 

it will actually be beneficial. 

In terms of what we are doing, again, this is de-identified information. What industry does is something different. They are interested in, Representative Neugebauer, what are your spending habits? What do you do? They want to know all about you. The Bureau 

doesn’t care to know about you or me; we want to know about how 

the general pattern of consumers is affected. De-identified information is a very different issue than the privacy issues of individual 

information that is personal to me. 

Chairman HENSARLING. The time of the gentleman has expired. 

The Chair recognizes the gentleman from Massachusetts, Mr. 

Capuano, the ranking member of our Housing and Insurance Subcommittee. 

Mr. CAPUANO. Thank you, Mr. Chairman. 

And thank you, Mr. Cordray. 

Mr. Cordray, I want to follow up a little bit on Representative 

Neugebauer’s questions on data. Do you keep this data for long periods of time? 

Mr. CORDRAY. I believe we will keep it for long periods of time, 

yes. 

Mr. CAPUANO. Do you share it with any other agency? 

Mr. CORDRAY. We use this data for our own research purposes, 

both on the credit card market and the mortgage market, and, 

frankly, it is critical data. If we don’t have it— 

Mr. CAPUANO. I understand. I am not against the concept. 

Mr. CORDRAY. Yes. 

Mr. CAPUANO. I want to know if you are sharing it with anyone 

else. 

Mr. CORDRAY. It depends. The National Mortgage Database is a 

joint project of the CFPB and the Federal Housing Finance Administration, so that is a joint project by definition, so we are sharing 

information. 

On our Consumer Credit Panel and credit card database, that is 

something we use. I don’t honestly know if we are sharing it with 

anyone, but I think we are— 

Mr. CAPUANO. Is the information being shared with the IRS? 

Mr. CORDRAY. Not that I am aware of. 

Mr. CAPUANO. Is it being shared with the NSA? 

Mr. CORDRAY. I don’t know. I am quite sure it is not. 

Mr. CAPUANO. All right. Because I don’t mind you collecting the 

data to some extent for the purposes as you describe them. I do 

29 

prefer sampling. I think that is the better way to go, and you have 

said you are heading that way. 

Mr. CORDRAY. Yes. 

Mr. CAPUANO. But I would object incredibly strongly to having 

that information shared beyond those parameters. And honestly, 

why are you keeping any of the data? Once you do your research, 

why keep it? 

Mr. CORDRAY. Because it is ongoing work that we are having to 

do. We need to see what is happening in the mortgage market over 

time. It isn’t just— 

Mr. CAPUANO. I understand where you would keep the results, 

the conglomeration of the data. So you collect 1 year, you can conglomerate it, see how many mortgages, how many people are there. 

I get that. Keep that. Why keep the individual data? 

Mr. CORDRAY. Again, it is the pattern of data that we are keeping and the pattern of how markets are affected— 

Mr. CAPUANO. Are you keeping my individual mortgage data— 

Mr. CORDRAY. No. — 

Mr. CAPUANO. —for 20 years? 

Mr. CORDRAY. De-identified, so nobody would have any idea that 

it is you or me— 

Mr. CAPUANO. Yes, I have heard that before. 

Mr. CORDRAY. Right. 

Mr. CAPUANO. I love you, and you know I support the agency, but 

I don’t trust that answer from a governmental agency. 

Mr. CORDRAY. Okay. I’ll tell you what, we would be happy to 

have our staff brief your staff. 

Mr. CAPUANO. I would very much like that. I am very supportive 

of what you do. I am supportive of you doing research. I am not 

supportive of anyone gathering additional data that is unnecessary 

or kept for inappropriate time periods. 

Mr. CORDRAY. Fair enough. Okay. 

Mr. CAPUANO. Mr. Cordray, the last time—actually you weren’t 

here because at that time you weren’t allowed to come to the committee, but there were others from your agency. The last fight I 

had, had to do with QM, because I asked a very simple question. 

At the time people were saying, oh, my God, QM, it is going to disqualify 40 percent of the people who are currently eligible for mortgages from ever getting a mortgage. Has that happened? 

Mr. CORDRAY. There were people who said that it would double 

the cost of a mortgage— 

Mr. CAPUANO. Yes. 

Mr. CORDRAY. —and cut the market in half. That was absolutely 

wrong, and the American Banker article just yesterday, interestingly, verified that the market is about the same as it was before 

QM, but with more protections in place, and it has had negligible 

costs. 

Mr. CAPUANO. So QM did not kill the situation, it actually helped 

consumers. Do you think that is a fair assumption, a fair conclusion? 

Mr. CORDRAY. The housing market is challenged right now, and 

it has to do with things like the interest rate popped up last summer and the winter, and other things that people have pointed to. 

But the QM has not killed the mortgage market. I think it 

30 

strengthens the mortgage market over time by giving people more 

confidence. 

Mr. CAPUANO. QM has done exactly what it was intended to do 

without having a negative impact on the market? 

Mr. CORDRAY. I believe so. And if there are unintended consequences revealed to us, we are in close contact with people like 

the mortgage bankers, retailers, et cetera, and we will take account 

of those issues. 

Mr. CAPUANO. I ask you that because I have not had a single 

complaint about the impact of QM on individual borrowers or on 

the housing market itself. And I am just curious. You are collecting 

all this data. You would know more than me, so I wanted to ask. 

Mr. CORDRAY. Yes. I am glad to hear it, and it is consistent with 

what we— 

Mr. CAPUANO. Actually I don’t hear it, which is good. I only hear 

bad things. I don’t hear good things. 

Mr. CORDRAY. That is kind of us, too. 

Mr. CAPUANO. Last question, when did you get appointed again? 

Tell me the year. 

Mr. CORDRAY. Beg your pardon? 

Mr. CAPUANO. What year were you appointed the first time? 

Mr. CORDRAY. That’s a complicated question. I was recess-appointed in January of 2012. 

Mr. CAPUANO. 2012. 

Mr. CORDRAY. I had been blocked in the Senate. I was blocked 

again in the— 

Mr. CAPUANO. I know that. 

Mr. CORDRAY. I was finally confirmed in July of 2013. 

Mr. CAPUANO. I am just wondering if, when you were appointed, 

were you in this hearing room before it was redone? 

Mr. CORDRAY. That guy’s picture wasn’t on the wall then. He was 

sitting— 

Mr. CAPUANO. Because we had a major remodel of this hearing 

room just a few years ago, and actually one prior to that a few 

years before, because when I was first on the committee, I was 

down in that seat, and it was a folding table, as was the other side. 

Mr. CORDRAY. I notice a lot of work being done in the Cannon 

Building. 

Mr. CAPUANO. Do you think that we should have done this room 

over, or do you think we should have left it in the way that it was? 

Mr. CORDRAY. Up to you all. It is a nice room. 

Mr. CAPUANO. It is kind of a nice room. It is—actually the colors 

are very pretty. I guess what I am saying and trying to make the 

point is working in a decent work environment isn’t such a bad 

thing for anybody to get their job done. Keep doing it. 

Chairman HENSARLING. The time of the gentleman has expired. 

The Chair now recognizes the gentleman from California, Mr. 

Campbell, the chairman of our Monetary Policy Subcommittee. 

Mr. CAMPBELL. Thank you, Mr. Chairman. 

Continuing on that theme, Director Cordray, and not to beat it 

to death, but, again, to read that this new building of yours will 

have a raised water table flowing over a water wall of naturally 

split granite—at the southern edge, a new water source creates a 

cascade of water that flows down the water wall into the sunken 

31 

garden, terminating in a raised splash pool. More slabs of granite 

rest in the bottom of this pool. 

I thought this room was fine before. I don’t see any waterfalls 

here. But the question I have is, how does that serve your mission 

of consumer protection? 

Mr. CORDRAY. Look, that has been quoted back to me. I feel like 

if you found some of my old poetry I wrote when I was a kid, it 

would be embarrassing to have that read in a public hearing. This 

was the kind of puffery that was working through government permitting processes in trying to get business from the Bureau. The 

reality is you can describe probably any two-bit fountain on any 

corner square of any part of the country in the same glowing terms 

if you wished to do so. The building is a dump. I invite you to send 

your staff to take a look at it and— 

Mr. CAMPBELL. Okay. Director Cordray, this is outside. 

Mr. CORDRAY. Yes. 

Mr. CAMPBELL. Nobody works outside. Did you— 

Mr. CORDRAY. It sounds wonderful, but there is not going to be 

a lot of cost expended on that, I can tell you that. 

Mr. CAMPBELL. The point of all this—because I could read more 

of this, and it goes on—There is a removed space of rest and contemplation. I thought this was a workplace. But who approved—we 

have established that there is at least $185 million being spent on 

this. Who approved this? 

Mr. CORDRAY. Again, we are mixing apples and oranges in those 

numbers. 

Mr. CAMPBELL. No. No. 

Mr. CORDRAY. That is being spent on renovating the building. 

Mr. CAMPBELL. I understand that includes moving away, your 

rent for wherever while it is being redone, and then moving back. 

Mr. CORDRAY. Yes. 

Mr. CAMPBELL. It includes all those expenses. So, say it is $139 

million, whatever the number is, who approved that? 

Mr. CORDRAY. Whoever was the leadership of the Bureau at different times approved that, including most recently, myself. 

Mr. CAMPBELL. And who outside of the Bureau would have had 

to review or approve that? 

Mr. CORDRAY. There have been various permitting processes we 

have to work through. We are now working with— 

Mr. CAMPBELL. To spend the money. 

Mr. CORDRAY. —GSA, frankly, in part to give me comfort around 

that this is being handled professionally and appropriately. GSA is 

now involved in the renovation, and they are the experts in the 

Federal Government work, as I understand it. 

Mr. CAMPBELL. But to spend $185 million of taxpayer money, 

who outside of this Bureau had to approve that? Not the permits. 

Mr. CORDRAY. I approve it, and Congress oversees me vigorously. 

Mr. CAMPBELL. Oh, really? 

Mr. CORDRAY. Yes. Like you are doing right now. 

Mr. CAMPBELL. Oh, really? And what should we do about your 

budgets? Suppose we don’t think you should spend this $185 million. What can we do about it? 

Mr. CORDRAY. I suppose you could change the law. 

32 

Mr. CAMPBELL. Ah. I guess we could, but no one approves your— the point here is that in this Bureau, you could spend $200 million 

of taxpayer money without anybody outside the Bureau having the 

ability to change it, approve it, review it, or say no. 

Mr. CORDRAY. No. 

Mr. CAMPBELL. Director Cordray, it is my time. It is my time. 

Mr. CORDRAY. That is not accurate. Not accurate. 

Mr. CAMPBELL. That is unaccountability, and that is the problem 

with this Bureau. They can’t do that in the Pentagon. 

Mr. CORDRAY. If I could correct the record, we have a GAO audit 

every year. They have to review what we do, and they can call us 

out for misspending. The Inspector General does regular reviews of 

us and has reviewed our budget process. We also have an independent audit that Congress laid on us. 

Mr. CAMPBELL. And they are not cutting or approving this before 

you do it, are they? 

Mr. CORDRAY. They are looking at our budgeting process and our 

spending process, so, yes, this is part of what we are doing. 

Mr. CAMPBELL. Director Cordray, the point I am making here is 

regardless of the mission of this thing and the noble mission for 

which it was created, the problem with this agency is your 

unaccountability to anybody outside of the agency. And that 

wouldn’t matter if that is in government or in a private industry 

or anywhere else; that is a structural problem that you can’t have 

exist. 

And when I look at your agency now, one of the things you are 

supposed to do is stop discrimination, yet you are discriminating 

within the agency. And then you are collecting data that enables 

discrimination out in the world where it doesn’t currently exist. 

You were established because of overspending on housing, yet in 

my view, and the view of others up here, you are overspending on 

your own housing. 

And then on top of that, one of the things that consumers are 

most concerned about, as Mr. Capuano indicated, is invasions of 

their privacy by banks, by whomever, taking that information and 

abusing it. But now it appears that you are collecting more of that 

information, and the public has more to fear from you than they 

do from the bank, because at least you can sue the bank. 

It seems like the moral of this agency is do what I say, not what 

I do, and that is not a good way to run a railroad. 

I yield back. 

Chairman HENSARLING. Regrettably, the time of the gentleman 

has expired. 

Mr. CORDRAY. Mr. Chairman, no opportunity to respond to that? 

Chairman HENSARLING. It is the gentleman’s time. He did not 

ask a question. I am sure that someone on this side of the aisle, 

Director Cordray, will give you additional time. 

The Chair now recognizes the gentleman from Missouri, Mr. 

Clay, the ranking member of our Monetary Policy Subcommittee. 

Mr. CLAY. Thank you so much, Mr. Chairman, and welcome 

back, Mr. Cordray. 

And I don’t know, I am one who feels as though the public does 

need someone watching out for their best interests, and I will let 

you take a little bit of my time and respond to my statement that 

33 

the public does need an umpire or a referee, since not too many of 

us in this body want to be that umpire or referee. Can you respond 

to that, Mr. Cordray? 

Mr. CORDRAY. Yes. And I appreciate that, Congressman. 

When the Congress set about to pass the financial reform law, 

it recognized that everybody suffered in this country greatly 

through the financial crisis, and people lost jobs, millions of people. 

Millions of people lost homes. People lost trillions of dollars in 

household wealth, and in many communities it has been difficult 

to recover that wealth. 

The point of that reform was to do a lot of things, and one of 

them was to make consumer protection in the financial marketplace more front and center and to give someone the responsibility. 

I, and the Bureau, have this responsibility to see that people are 

treated fairly, and to stand on their side when they are not, and 

that is something that we take very seriously. As I said in my 

opening statement, I am very proud of the nearly 1,400 people who 

work at the Bureau every day to accomplish some of the things 

that you have described today. 

I think the work we do is essential. I think it doesn’t take any 

of us very far to go in order to see that. This is a sophisticated 

body. All of you work on financial services matters, and you are experts in it, but you don’t have to think very far to parents, or 

grandparents, or cousins, or friends, or sons and daughters to recognize for a lot of people this is intimidating stuff, and it is difficult. And they may or may not know how to get it right, and they 

may need some protections in the marketplace. I think that we are 

trying to do that in a balanced and reasonable way. I think it has 

mostly been recognized even by industry that that is how we have 

been proceeding. And it is really important because otherwise people end up making a lot of bad decisions— 

Mr. CLAY. Not to cut you off, but I certainly appreciate the role 

you play in protecting consumers. 

I am not going to throw you all softball questions. So let us talk about the $10 billion ceiling for direct examination by the CFPB. 

Your IG report which came out last March found that 59 percent 

of draft examination reports submitted by regional examination 

teams during the scope of the IG’s evaluation did not meet the 

CFPB’s timeliness requirement for submission. Within 30 days of 

field work completion, 90 percent of the drafts that received headquarters approval as of July 31, 2013, had not been approved by 

headquarters within the 30-day requirement. 

One reasonable take-away from that is that your examination 

team is stretched too thin. And at a hearing last year, one of the 

witnesses recommended that the CFPB’s $10 billion threshold for 

direct examination of financial institutions be raised to a higher 

level. With the current $10 billion threshold, you have authority 

over about 80 percent of our bank assets; if it was a $25 billion 

threshold, you would have authority over 75 percent of all bank assets; and if it was $50 billion, you would have direct examination 

authority over 70 percent of our bank assets. 

Let me ask you this: Would you be willing to work with me and 

other members of this committee to identify a higher direct examination threshold than the current $10 billion? 

34 

Mr. CORDRAY. I honestly, until you raised it just now, had not 

given that any thought because our job is basically to enforce the 

law as is. And I know that when the Dodd-Frank bill went through 

Congress, there was a lot of debate back and forth over different 

thresholds, and there are certain thresholds set for some of the financial derivative types of things, and resolution plans and other 

things are set at a higher level. I guess $10 billion was the compromise Congress reached on this, and it feels like it is a workable 

level. 

The issue you raised about the timeliness of that particular exam 

was something we struggled with early on as we were staffing up. 

We have gotten a lot better on it. We went out and sought input 

and got input from the U.S. Chamber of Commerce on how to approach this. We went to the clearinghouse of banks to get their 

input, as well. Our Inspector General has done a careful scrub of 

this process and recommended many changes and improvements. 

And we have done our own work on this, and I think that has improved enormously. 

So I think we are getting more efficient. I think we can handle 

the workload. If Congress wants to think about that, we would be 

happy to provide technical assistance, but I don’t have a strong position one way or the other on that. 

Mr. CLAY. Thank you for your response. 

Chairman HENSARLING. The time of the gentleman has expired. 

The Chair now recognizes the gentleman from California, Mr. 

Royce, the chairman of the House Foreign Affairs Committee, for 

5 minutes. 

Mr. ROYCE. Director Cordray, how are you? 

I have heard criticism that the CFPB is conducting regulation of 

financial products and services through enforcement actions and 

through guidance bulletins rather than through notice-and-comment rulemakings, which, of course, would include input from the 

public and input from Congress. Since this door has been opened, 

I think the CFPB has finalized 54 rules, 18 of which were part of 

congressionally-mandated regulation, and at the same time issued 

34 bulletins and 23 enforcement actions. 

So if you take out the congressionally-mandated rules, that 

means the CFPB issued about the same number of rules as it did 

bulletins: 36 rules; 34 bulletins. The 23 enforcement actions often 

include specific business reforms. The CFPB promotes the bulletins 

as statements of law and policy, and the enforcements actions as 

deterrence, yet in both cases the agency appears to be making policy without obtaining public input, if you follow my logic on that. 

So if the CFPB intends to impose specific new requirements, 

wouldn’t it be better for the agency to use the rulemaking process, 

which has the benefit here of notice-and-comment periods, rather 

than enforcement actions and bulletins? 

Mr. CORDRAY. We can do that and, of course, are required by law 

to do that in appropriate instances, particularly where we are making substantive changes in the law pursuant to congressional delegation. 

On enforcement actions, in particular, I don’t think there is a law 

enforcement agency in America that requires a notice-and-comment 

process before engaging in enforcement action, because you are, by 

35 

definition, responding to potential violations of the law, and having 

that drag along while you are allowing lawbreakers to operate is 

not appropriate. 

I think the issue that you raise is around some of our guidance 

and bulletins and whether those should be done with notice and 

comments. Typically, that is not required. But there have been lots 

of instances where we have put things out for notice and comment 

anyway. We have done a lot of requests for information to get a lot 

of input from people, and we are very accessible. We have so far 

tried to hew very closely to what we understand the law to be in 

this area, which is notice and comment for substantive administrative rules and not for guidances where we are simply clarifying and 

laying out the laws. It is already, we believe, understood. 

I believe the U.S. Supreme Court has just granted a case around 

interpretive rules where they are going to, and sometimes this is 

a difficult line to draw, try to clarify that next term. 

Mr. ROYCE. But let me just walk you through sort of an example 

here, because regulation conducted through enforcement often results in confusion. So I will give you an example, and I think confusion can be harmful to consumers. 

By way of example, the CFPB has issued four enforcement orders 

against banks in connection with the marketing of debt-protection 

products. Each of the enforcement actions imposed different, quite 

different, remedial measures. 

So banks, of course, under this circumstance, are not certain of 

what is required of them to safely sell these products. Many have 

stopped offering the products to consumers. And then a subsequent 

bulletin related to add-on products did not resolve this uncertainty. 

So hence the thought here. 

If you could clarify the agency’s position on debt-protection products so that the financial services industry could understand what 

is expected in connection with these products, and does the CFPB 

have concerns about debt-protection products themselves or just 

how these products are marketed, but the fact that every case is 

handled differently with different remedial measures leaves that 

big question mark. 

Mr. CORDRAY. It is a fair concern. The remedial measures depend 

critically on the facts and circumstances of that matter. If the institution was marketing these things telling people that they were 

signed up when they weren’t, that is going to get a certain response. If they are telling them that the product did this, and it 

didn’t— 

Mr. ROYCE. I hear you. The four examples. But I have been told 

that other Federal agencies often enlist the use of advisory opinions to help businesses seeking clarification on specific practices. 

Would the CFPB consider issuing similar advisory opinions, because then you might have them know on the front end exactly 

what was expected, and what wasn’t, and you wouldn’t have, arguably, four different results. 

Mr. CORDRAY. That is something we are working to do in appropriate cases. The SEC has done some things, and we have looked 

at other agencies, and I do think we can probably do more in this 

area, yes. 

36 

Mr. ROYCE. Yes, I think that would move you more towards the 

input from the public, and input from Congress, and input especially with respect to those who are going to be impacted, understanding exactly where you are going with your rulemaking. Thank 

you. 

Chairman HENSARLING. The time of the gentleman has expired. 

The Chair now recognizes the gentlelady from New York, Mrs. 

McCarthy, for 5 minutes. 

Mrs. MCCARTHY OF NEW YORK. Thank you, Mr. Chairman. I appreciate that. 

Welcome, Mr. Cordray. 

You know, it is funny. When I first got here, a lot of people said 

I had too much common sense, and that doesn’t fit into Congress. 

And while we were talking about the renovation of your building, 

I was thinking about the Cannon Building, which is—actually all 

of our buildings are old. They have already moved out the support 

staff down in the basements over to another building that they had 

to renovate so that even Members will be going over there in this 

new Congress that will be coming up. 

I live in an older home that belonged to my parents, and 2 years 

ago I had to do some renovations, and of course every time you do 

a renovation, something else pops up. So it ended up costing at 

least 15 percent more than I had budgeted for. 

But I also want to thank you for the work. And I think it is important that we get back to where and why we wanted to have 

oversight to protect our constituents. 

I am sure here Members, many a time, would get calls from constituents to be able to straighten out something that either happened with their financial institution or a credit card, and, of 

course, we would try to solve that, but now we actually have an 

area where even the Members of Congress can go with the problems that our constituents are coming to. 

But to get back down to what you have been doing, in your testimony you mentioned that the CFPB has been able to refund consumers, which is taxpayers’ money, who are victims of violations of 

consumer financial protection laws by over $3.8 billion. That is a 

lot of money to come back to the consumer into their pockets. 

You mentioned that the CFPB took action against the payday 

lender for overcharging servicemembers. That is extremely important because our servicemembers have been taken advantage of, especially those who are overseas. Can you go into further detail of 

how the CFPB took action in that case? 

And I just want to say thank you for trying to educate our constituents on financial literacy. I have been working on this for 

years, not only on this committee, but on the Education Committee, 

because that, to me, is the most important thing that we can do 

for our consumers so they don’t get into debt or get taken advantage of. 

So with that, I would like to hear your response. 

Mr. CORDRAY. Sure. In terms of servicemembers, we have been 

blessed, because we have a tremendous head of our Office of Servicemember Affairs, Ms. Holly Petraeus. She and her team have 

done great work across the country bringing back information and 

stories and problems that active duty servicemembers and their 

37 

families and veterans and their families have brought to our attention. Some stories are the general consumer problems, and some of 

them are made particularly pointed by being an active duty servicemember. And we have been working with the Department of Defense on new rules under the Military Lending Act that I think will 

really strengthen what has been done there, and that is great 

work, and it is important work, and we are glad to be doing it. 

On the financial literacy front, we are working with 

servicemembers in particular on an initiative, a financial fitness 

coaching program for them. And we are doing a lot of things with 

the Pentagon and the Veterans Administration. I just signed something the other day where Assistant Director Petraeus and her 

team are going to be working with the Department of Education, 

the Department of Defense, and the Department of Veterans Affairs around the principles of excellence for making sure that GI 

bill money is being used effectively so the servicemembers really 

get the benefit they are promised of a meaningful education that 

will advance them in life rather than having it squandered on 

things that don’t provide value. And so that is important. 

In general, financial literacy is something we don’t do enough of 

in this country, and I know that is a bipartisan issue among members of this committee and Members of the Congress, but it is 

something at the State and local level people have to recognize 

they need to do more. You can’t send our 18-, 19-year-olds out into 

the world with no basis to go on and no understanding of the kind 

of big decisions they are going to be expected to make and think 

that is somehow going to succeed. It doesn’t succeed. It didn’t in 

the run-up to the financial crisis, and it won’t now, and it is something that has to change. 

Mrs. MCCARTHY OF NEW YORK. We have found in our communities on Long Island that those, especially first-time homebuyers, 

if they go through some of the nonprofits—and actually it is not 

just a mortgage. It is the insurance, it is utilities, it is everything 

that goes with it. Many of us feel that a lot of people who got mortgages should have never gotten them. Never gotten them. And I 

blame all the bankers because they didn’t look closely enough. And 

unfortunately, that is what caused so much pain in this country 

and continues to cause pain. The problem has not been solved yet. 

We are getting there, but it is still something. Thank you for your 

service. 

Chairman HENSARLING. The time of the gentlelady has expired. 

The Chair now recognizes the gentleman from New Mexico, Mr. 

Pearce, for 5 minutes. 

Mr. PEARCE. Thank you, Mr. Chairman. 

And thank you, Mr. Cordray, for being here. 

Mr. Cordray, following up on the questions from the gentlelady 

from West Virginia, you had mentioned that there are items that 

you de-identify. Are you going to put that into the Federal Register? Are you going to say publicly that you are going to buy the 

data, but then you are going the de-identify it? 

Mr. CORDRAY. We are going to continue to work with the FHFA. 

Both of us have been listening carefully not only to hearings like 

this and testimonies, but also questions for the record and inquiries 

from this committee, and we will be very responsive to that. 

38 

Mr. PEARCE. Okay. Because what I am reading in this is that it 

says right now that the records in the system may include without 

limitation, and so if you do not identify those limitations, then later 

people can come back and say, hey, we told you we are going to 

collect this stuff, and we are going to use it how we want to. And 

so unless you correct the record—and by the way, taking exception 

to something you had said earlier, you said it is going to be a very 

small, select group who has access to it. One page over, it says a 

whole list of people have access, but in one spot it says the contractor, personnel, grantees, the volunteers, interns, and others 

performing work on the contract, so it doesn’t—and it identifies the 

project of the FHFA. So it doesn’t sound like it is such a limited 

group who will be able to look at it. 

So I am reading in your book here that you are protecting consumers from unfair, deceptive, abusive practices, and some of the 

unfairness has come because of the Federal Reserve driving the interest rate to zero. We had kind of a round of questions with a previous witness, and he simply said, well, there is collateral damage. 

And I think that this idea that seniors who have saved—and 

they generally use very unsophisticated products, and so usually it 

is a savings account, and when they get zero, now they tell me at 

the town halls they saved enough for retirement. So have you visited with the Federal Reserve about this abusive, unfair practice of 

driving the interest rate to zero where the seniors get nothing? 

Have you visited with the Federal Reserve? 

Mr. CORDRAY. On your previous point, if I am hearing you, I am 

understanding you want us to come back to you and keep you posted as the National Mortgage Database moves forward. It will be a 

much more limited group of people who have access to that, and 

we will keep you posted on the issues you raise. If you were reading— 

Mr. PEARCE. I don’t see how that addresses the question I am 

asking. 

Mr. CORDRAY. No, I know. And then the current question, if you 

want me to respond to it, there is no question that low interest 

rates hurt savers who are trying to live off the money they have 

saved, and this is part of the residue of the financial crisis. If we 

hadn’t had the financial crisis, interest rates wouldn’t have had to 

plunge and— 

Mr. PEARCE. Okay. Believe me, I really do think somebody 

should be talking to the Federal Reserve because they are printing 

money and driving interest rates down, which hurts the poor, and 

it hurts the seniors. 

Under your watch, the agency has decreased the number of seller 

financing from 3 to 1. Now, in my district, about half of the houses 

are trailer houses. And what happens is people during their lifetime, they accumulate these mobile homes. Banks generally won’t 

loan money on them. A lot of times, they are pretty old. People 

would move into them. So it is that whole idea that we would have 

access—one of your other deals—to credit. 

Why are you taking such a limiting stance on seller financing, 

because that is the way that many trailer houses are sold? I don’t 

think any banks are ever going to come from New York or Massachusetts or anywhere and come out to New Mexico and lend money 

39 

on these 30- and 40-year-old trailer houses. But some of the lowend consumers, people who are really struggling to get by in my 

district, which has per capita income of about $30,000, so you can 

guess that there are a lot of people living on $15,000 or $20,000. 

So why did you do that? Why are you making it so difficult for 

people to sell these houses, number one, and get their money out 

of them? 

Mr. CORDRAY. I am honestly not sure what to say to you on that 

issue. I am making a star on that, that we need to come back to 

you. 

Mr. PEARCE. Okay. 

Mr. CORDRAY. If seller financing in particular is a problem, then 

I would like to understand how our rules will be affecting— 

Mr. PEARCE. Yes. Because what happens, basically, is people 

then have to sell them when they get older to a group, and they 

get stripped of their asset value. 

Mr. CORDRAY. Yes. 

Mr. PEARCE. Now, my last thing here is I am holding up a summons—I think you have used the words ‘‘intimidating stuff,’’ not 

with respect to summonses. But included in the second page is the 

sentence and all the things they are supposed to provide, but then 

you are not required to produce any records in response to the 

summons. Isn’t that deceptive? 

This is coming from our IRS. And so, again, in protecting consumers, protecting people, these are pretty abusive practices. They 

deal with the financial world because of that. Do you ever visit the 

IRS on stuff like this? 

Mr. CORDRAY. I don’t have jurisdiction over the other government 

agencies, so, no, I don’t. I would be happy to see and read what 

you are— 

Mr. PEARCE. Mr. Chairman, thank you, but it looks like we are 

going to protect consumers from everybody but the government. 

Chairman HENSARLING. The time of the gentleman has expired. 

The Chair recognizes the gentleman from California, Mr. Sherman, for 5 minutes. 

Mr. SHERMAN. Okay. One comment in support of the Fed. People 

say, oh, we should have higher interest rates so I can live on my 

savings, but when we had 6 percent interest rates, we had 6 percent inflation. So they were really invading their principal in that 

the value of their principal was declining by 6 percent each year. 

Today, we have real interest rates of 2 percent, and it is a real interest rate. 

So perhaps if we had financial literacy, people would understand 

that if you are getting a 5 percent or 6 percent nominal return at 

a time of 5 or 6 percent inflation, you are really earning nothing. 

You are invading your principal by seeing it decline in its purchasing power. 

Speaking of financial literacy, I am all for it, Mr. Cordray, but 

I hope that you would write rules and industry would engage in 

practices that were fair enough and transparent enough so even 

people who had not yet benefited from your financial literacy would 

not be taken advantage of. I don’t want to see this financial literacy 

mantra be a replacement for fair disclosure and honest practices. 

40 

As to your building, if you can make it cheaper, if you can make 

a change, you will make us happy. You will never have a structure 

that will allow you to compete with the private law firms and their 

beautiful offices, but you will be able to recruit from those law 

firms or get good people because you are doing the Lord’s work, not 

because you have a heavenly building. 

Mr. CORDRAY. You are right that the advantage for us in recruiting is our mission. People want to come to work to protect consumers, and we are going to have a decent building. 

Mr. SHERMAN. I understand. I want to quickly go on to a question here. 

There has been significant dissatisfaction here in this room with 

the guidance that you provided about indirect auto leasing, particular concern about how you are basing this guidance on methodology that at least our chairman says he can’t get explained, and 

sends letter after letter to you, Freedom of Information Act requests. Would you consider another study that would be based on 

methodology so convincing that you would be willing to share the 

methodology and the data with Congress? 

Mr. CORDRAY. Again, it has been a source of, I think, some frustration to the committee, and to me, and to the Bureau, that we 

have been back and forth on different kinds of information about 

this. We think we are providing a lot of information, but people 

identify other information that they want. Partly as a result of 

that, we are going to put out a White Paper on the proxy methodology to try to address that very directly later this summer. We 

will continue to try to be responsive on this. The reality is the auto 

industry and the auto lenders, they know all about this because 

they are constantly having to monitor themselves the— 

Mr. SHERMAN. If they know all about it, why don’t you answer 

the chairman’s question so he can know all about it? 

Mr. CORDRAY. I think that we are on the same page. They have 

to fend off private lawsuits whether the CFPB ever existed or not. 

And they have had private lawsuits, and they have had to pay out 

and make changes, and they do the same analysis that we do, I believe. We have had lots of discussions with them. We will be glad 

to have more. It is an ongoing dialogue, and— 

Mr. SHERMAN. I would hope that you would—it is my understanding that the Bureau is threatening enforcement actions for 

failure to comply with its interpretation of the law as set forth in 

an informal guidance, and I would hope that you replace that guidance with a real regulation that goes through the real process with 

a methodology that is open, that you are proud of. 

And I would point out that as things exist now, your guidance 

may not only guide you, but it may also guide the courts. So something you put out that you say, well, this is just a press release, 

okay, a long press release, it may not guide us, somebody is using 

it in court, and millions of dollars are changing hands, and companies are changing their practices. This is an important area. Let us 

go back and do the full work. 

Mr. CORDRAY. If people want to bring us thoughts about a rule, 

including people from the industry, we will certainly welcome any 

input and give it some careful consideration. 

41 

Mr. SHERMAN. And be willing to go through the administrative 

procedure process to draft a regulation? 

Mr. CORDRAY. We are going to work through what the issues are 

and what can be done, but we are happy to hear from people, and 

we welcome that. 

Mr. SHERMAN. And then finally, I want to say that we recently 

passed legislation that I cosponsored out of the Small Business Advisory Board. I look forward to that actually being done, whether 

the Senate passes the legislation or not, and I hope that you will 

include somebody from the title industry, as that plays such an important role in the real estate transactions— 

Mr. CORDRAY. If there is anybody from the title industry you 

think hasn’t been able to access us and meet with us and talk to 

us, I would be glad to hear about it. I think we are trying to be 

very accessible. 

Mr. SHERMAN. Thank you. 

Mr. MCHENRY [presiding]. The gentleman’s time has expired. 

We will now go to the vice chairman of our Oversight Subcommittee, Mr. Fitzpatrick of Pennsylvania. 

Mr. FITZPATRICK. I thank the chairman, and I thank you, Mr. 

Cordray, for your time today. 

I wanted to follow up on some of these questions having to do 

with the rulemaking of CFPB, and the White Papers that are 

issued, and ultimately the underlying methodologies that Mr. Sherman was talking about, but also the data. 

Last week, Mr. Cordray, this committee passed out to the House 

Floor a bill that I sponsored called the Bureau Research Transparency Act. And we feel the bill is necessary because the CFPB 

portrays itself as being a ‘‘data-driven agency.’’ However, over the 

past 2 years it has become clear that when the CFPB wishes to engage in a rulemaking in a particular area, it first releases a purportedly objective White Paper on the issue. Invariably, research 

papers conclude that regulations are necessary, press releases are 

issued, then the media is driven by the press release and then used 

to come back to try to create some momentum for the proposed 

rulemaking. 

Many have picked up on this pattern at the CFPB. And it is difficult to prove that the CFPB’s research is faulty because the Bureau often refuses to subject its work to peer review or to release 

its methodology or the underlying data. 

By requiring the CFPB to release its work publicly, the bill that 

I have sponsored will allow interested parties the opportunity to review the Bureau’s work, and ensure that its findings are supported 

by the data itself. So the bill, in my view, improves the rulemaking 

process by ensuring that its policy prescriptions are supported by 

objective and unbiased research. 

I am not going to ask you to comment on a specific piece of legislation, but I would ask you just a couple of general questions. The 

first is, does anything prevent the CFPB from obtaining the data 

that you feel you need separately through the OMB approval and 

public comment requirements of the Paperwork Reduction Act? 

Mr. CORDRAY. We have been complying with the Paperwork Reduction Act; that is part of the constraints upon our agency. And 

42 

we have worked with OMB for some collections, and then there are 

certain ones that are exempt from the Act, limited ones. 

We also have the supervisory authority, which is a method of 

gathering information related to supervision of particular institutions. There is a variety of different sources there. And we have 

done voluntary collections from industry, where they, in many 

cases, have been responsive to us. 

Mr. FITZPATRICK. So the bill, Mr. Cordray, simply says that the 

data must be available to the public. Your agency will have some 

discretion on how to implement the law, even by rulemaking; is 

that not correct? 

Mr. CORDRAY. We will have some discretion, yes. 

Mr. FITZPATRICK. I want to use the couple of minutes I have left 

to get into a separate issue. The O&I Subcommittee, we will be 

meeting later this afternoon. Pursuant to subpoena, a couple of the 

employees of the Bureau will be testifying. 

Mr. CORDRAY. Yep. 

Mr. FITZPATRICK. And, in your opening statements, I appreciate 

your concern about the process, about the allegations of discrimination within the agency. 

So there are some who are coming forward today. There are others, employees of the Bureau, who are much more reluctant. They 

are concerned, I guess, about their futures within the Bureau. They 

have given some statements to the committee. And even though 

they are either unable or not willing or afraid to come forward, I 

do want to make sure that they have—all those employees do have 

a voice on this committee. 

Mr. CORDRAY. I do, too. Yes. 

Mr. FITZPATRICK. And I just want to read the statement of one 

of the employees who wanted to share her story: 

‘‘I am an employee at the Consumer Financial Protection Bureau, 

and I write to share my experience at the CFPB with you. I wish 

to remain anonymous due to fear of retaliation from the CFPB 

management. 

‘‘I am a minority employee on term status, and I joined the Bureau in the Office of Consumer Response. Sadly, though, since my 

appointment I have experienced discrimination by the Bureau at 

the hands of the very same managers who were the subject of the 

first hearing where Angela Martin testified. Unfortunately, my 

story is not unique, and I am one of many minority employees who 

have suffered discrimination at the CFPB. 

‘‘Like many of my colleagues, I believed that the CFPB was a 

meritocracy and that I could excel and obtain permanent status if 

I consistently did good work and improved process and procedures 

at the Bureau. However, I quickly learned that I was wrong. I suffered retaliation and discrimination by the CFPB managers whenever I questioned the status quo or when I suggested improvements 

in the way the Bureau handles consumer complaints.’’ 

So I would just ask, Mr. Director, as you go forward to improve 

the process and protect the employees, consider that there are 

many employees who, for a variety of reasons, have been unwilling 

or incapable of coming forward, and I ask that you consider them, 

as well. 

43 

Mr. CORDRAY. I will. We are working to resolve individual grievances through the appropriate process. And for those who wish to 

remain anonymous, if there are ways for us to try to address the 

general problems that they are describing, we are interested in 

doing so. 

Mr. FITZPATRICK. Thank you, sir. 

Mr. MCHENRY. The gentleman’s time has expired. 

Mr. Scott of Georgia is now recognized for 5 minutes. 

Mr. SCOTT. Thank you very much, Mr. Chairman. 

Mr. Cordray, I think that you have been made aware of the committee, how interested we are in working with you in resolving the 

auto dealers issue. It has gone on way too long. The auto industry 

is in limbo, the dealers are. So we encourage you to resolve this 

issue. 

I had spoken to you about that before and it is good to see that 

you are at least working through it. Sit down with them. Let’s 

work this thing out, get it off the table, so they can go about their 

business and not be threatened with indirect lending. 

Mr. CORDRAY. I do welcome the opportunity to spend time on 

this— 

Mr. SCOTT. Sure. 

Now, I want to ask your help on something else, because we are 

doing things out here, particularly for mortgages and helping people. Are you familiar with what we call the Hardest Hit Program? 

Mr. CORDRAY. I am, yes. 

Mr. SCOTT. Okay. Now, I want to ask you to help us in Georgia, 

because I have sort of taken the leadership in that. In August, we 

are putting together an event in which we will have an emphasis 

on that. And I would appreciate very much if you would make a 

call to Georgia’s Department of Community Affairs—if you would 

do that and offer your assistance. 

The issue is this: When we got this program, we got it for about $6 billion for the hardest-hit 17 or 19 States in the Nation. Georgia’s share of that was $339 million. Here is the kicker: If we don’t 

use that money within the next 29 months, it comes back to the 

Treasury. 

We need your encouragement. This is money that is there. We 

got this because a number of us on this committee held up the 

Dodd-Frank bill because we said we can’t just throw money up at 

Wall Street and think that is going to handle it without helping the 

struggling homeowners. And so, we got this money. And Georgia 

has spent maybe $139 million of it, so we have $200 million left 

down there. And if we don’t get that out in the next 28 months, 

it comes back to the Treasury. 

So in August, we are putting together an event. The Department 

of Community Affairs is the group that is handling it. 

Now, you must understand this point, that my State sat on that 

money for a year and did nothing until we lit a fire under them. 

I am saying to you, spring into action with us. It is not going to 

hurt you to make a call down there. You are there to protect the 

consumers and to help them. Here these folks can get up to 24 

months of loan forgiveness, of free home mortgage help. 

Nowhere is that needed more than for our veterans. We have a 

defense policy now which is lessening our military impact in Iraq 

44 

and Afghanistan. Our soldiers are coming home, and they are the 

fastest-growing group of homeless people. This money can help 

them. 

So in August, we are putting this event together, where we hope 

to get thousands of people, so that we can get this money out in 

the system in Georgia. A call from you, as the chief enforcer of consumer protection and help, to help let’s get that money there. 

Would you do that for me? 

Mr. CORDRAY. We— 

Mr. SCOTT. Her name is Commissioner Gretchen. 

Mr. CORDRAY. Yes. 

Mr. SCOTT. They are working now, thanks to lighting the fire. 

The issue is, we only have 28 months to get $200 million out to 

help struggling homeowners. And we are putting this event together. 

Now, I have 50 seconds, so much. But will you do that? Can I 

get you to do that? 

Mr. CORDRAY. We will be glad to work with you and your staff 

to see how— 

Mr. SCOTT. No, no. 

Mr. CORDRAY. —we can support that effort. 

Mr. SCOTT. Can I get you— 

Mr. CORDRAY. Yes. 

Mr. SCOTT. —to make a call down there? 

Mr. CORDRAY. Yes. 

Mr. SCOTT. And, see, that is a part of the problem. I don’t need 

you to work with me. I need you to make a call down there to Georgia and offer help for this event for Congressman Scott in Georgia 

to get this free mortgage assistance to struggling homeowners and 

especially our veterans. 

The other point I wanted to ask is about my earlier comment 

about the student loans. As I said, in the Atlanta Business Chronicle, $39 million, 1.2 million. 

Mr. CORDRAY. Yes. 

Mr. SCOTT. The President put forward a program last week to 

cap monthly payments. What say you about that? Are you familiar 

with it? Is it enough? 

Quickly. I have 4 seconds left. 

Mr. CORDRAY. Student loans are an enormous problem. We happen to have some great people at the Bureau working on them. We 

have been pushing for more refinancing options, and we are also 

pushing on the student loan servicers to do a better job, much better job, of actually servicing these loans and minimizing the pain. 

Mr. SCOTT. Is what the President is putting forward— 

Mr. MCHENRY. The gentleman’s time has expired. 

Mr. SCOTT. —sufficient? 

Mr. MCHENRY. We will now go to the next— 

Mr. CORDRAY. I don’t know for sure, one way or the other. But 

it is the kind of thing that will create more activity in the area, 

which is needed. 

Mr. SCOTT. Thank you, Mr. Chairman. 

Mr. MCHENRY. The gentleman’s time has expired. 

We will now go to the vice chairman of our Housing and Insurance Subcommittee, Mr. Luetkemeyer of Missouri. 

45 

Mr. LUETKEMEYER. Thank you, Mr. Chairman. 

Mr. Cordray, the last time you were here we discussed the situation with nondeposit lenders and Operation Choke Point. And at 

that time, I asked you for a letter indicating your support for individuals and businesses that were doing business in a legal fashion 

with a legal entity to not be impacted, and you would support 

them. I talked to you the other day. And you are working on a letter still, I take it, is that correct? 

Mr. CORDRAY. I testified last week in front of the Senate Banking 

Committee on this issue and indicated that, as we view it, people 

who are operating legally should be fine, people who are operating 

illegally— 

Mr. LUETKEMEYER. Right. 

Mr. CORDRAY. —should not be fine. 

Mr. LUETKEMEYER. Right. 

Mr. CORDRAY. And that is the right divide here. 

Mr. LUETKEMEYER. Right. We would just like a letter stating 

that policy. Is there a problem with that? 

Mr. CORDRAY. Why don’t you write to me, and then I will write 

back to you. 

Mr. LUETKEMEYER. Okay. We can do that. We thank you. 

Along those lines, we find that the FDIC and DOJ are working 

together in this Operation Choke Point and have taken a scorchedearth policy to trying to ferret out the bad actors. And while I do 

not support the bad actors, I fully support their efforts to find the 

bad actors in whatever entity, whatever industry there is, to do 

this in a way that harms the entire industry, in my judgment, is 

wrong. 

And so my question to you then is, are you working with either 

one of these agencies, the FDIC or the DOJ? Are any of your people 

working with them with regards to Operation Choke Point or those 

activities surrounding that operation? 

Mr. CORDRAY. I don’t really know what the ambit of Operation 

Choke Point is. That is a Justice Department term. I believe that 

we work regularly with the other agencies on issues around ‘‘know 

your customer,’’ which is a standard approach to bank supervision, 

where if someone is facilitating illegal conduct, they can be culpable, and they need to be very careful about that. The line I would 

draw is the same one you and I just discussed, which is, are you 

operating legally or are you operating illegally? 

Mr. LUETKEMEYER. I would hope that you are working with them 

if somebody is operating illegally. But if they are operating legally, 

are you still in the loop here, are you still working with them to 

try and do the scorched-earth theory of getting at every single individual in an industry and choking their financial services off? 

Mr. CORDRAY. I don’t believe in a scorched-earth approach. 

Again— 

Mr. LUETKEMEYER. Okay. 

Mr. CORDRAY. —we need access to credit, and people who are operating legally should be operating legally. People who are operating illegally should be either operating legally, changing their 

ways, or going out of business. That is the right divide. 

Mr. LUETKEMEYER. One of the things that I discussed with DOJ 

as well as the FDIC is that we need a safe harbor in place for the 

46 

banks to be able to continue to do business with entities that are 

legal entities and doing it in a legal way. And they refuse to do 

that, and, at some point, we are going to have to probably do some 

legislation. 

Would you support legislation to provide a safe harbor for the 

banking industry to be able to continue to do business with legal 

entities doing business in a legal way? 

Mr. CORDRAY. I am not quite sure what to make of that, because 

the problem is it is a factual matter, whether somebody is operating legally or illegally. I think the law already says that if you 

are operating legally, you have a safe harbor; if you are operating 

illegally, you have no safe harbor. The law is the law. 

Mr. LUETKEMEYER. The problem, Mr. Director, is that, as you 

well know, there is intimidation going on here, there is bullying 

going on here by the FDIC, in particular, and by DOJ. They will 

go in and, by inference, say, ‘‘Hey, you shouldn’t be doing business 

with these particular people,’’ but refuse to put it in writing. So, 

therefore, by refusing to put it in writing, they are bullying the 

bankers into no longer being able to provide financial services to 

an entire industry of people. 

That is going on with not just nondeposit lenders, but they are 

also doing it with gun manufacturers, ammunition manufacturers, 

and people who sell guns and ammunition. It is documented. Even 

the papers have this information out now. But we see it— 

Mr. CORDRAY. I don’t know if that is so at the FDIC. I really 

don’t know if that is so. 

Mr. LUETKEMEYER. I have talked with— 

Mr. CORDRAY. I have read press accounts about Operation Choke 

Point and I am not clear on what the ambit of that is. 

Mr. LUETKEMEYER. It has gone beyond just nondeposit lenders. 

And the FDIC admits that they are doing this. So we have documented evidence by some of the stories related in the press, if the 

press is doing their business at all, that would be the case. 

So my concern is, are you willing to help us provide a safe harbor 

for those banks and stop this intimidation, this bullying, that is 

going on with the FDIC and DOJ by putting in place a safe harbor? 

Would you support something like that? 

Mr. CORDRAY. If people are operating legally, they have a safe 

harbor by law. If they are operating illegally, they are not. The difficulty often is knowing which they are doing, and you have to dig 

in and really understand the facts and circumstances to know that. 

But, I don’t think you and I are far off from each other. 

Mr. LUETKEMEYER. I don’t think we are, but I would like for you 

to say ‘‘yes.’’ I think you agree that a safe harbor is necessary, but 

you won’t do it, Director. 

Mr. CORDRAY. I am not sure what to make of that. Honestly, I 

am not. Sorry. I just— 

Mr. LUETKEMEYER. Okay. I appreciate your comments this morning. And I am running out of time, so I will stop right there. 

Thank you, Mr. Chairman. 

Mr. MCHENRY. All right. I thank the gentleman for yielding 

back. 

We will now go to the ranking member of our Oversight Subcommittee, Mr. Green of Texas. 

47 

Mr. GREEN. Thank you, Mr. Chairman. 

Mr. Chairman, we have reached a point in time where we have 

to take the axe of truth and slam it into the tree of circumstance 

and let the chips fall where they may. 

And the truth is, Mr. Cordray, that if you eliminated the work 

on the building, the renovation process today, it would not end the 

argument, the opposition to the CFPB, the Consumer Financial 

Protection Bureau. It wouldn’t end it, because the building project 

is not an end. It is a means to an end. And the end that persons 

are seeking, not all but some, is to place the CFPB under the appropriations process. 

Then you would find yourself in the same position as the SEC: 

budget cut, underfunded, understaffed, overburdened, still got 300 

million people to protect but you are under the process that allows 

Congress to cut your budget, manipulate your budget, to the extent 

that you won’t be efficacious. The truth is we spent $621 million on a visitors center, a con- gressional visitors center. It cost $621 million. 

Mr. CORDRAY. Wow. 

Mr. GREEN. That is a lot of money for visitors. 

Mr. CORDRAY. Yes. 

Mr. GREEN. I welcome visitors to the Capitol. I think the argu- ment can be made that you don’t need a $621-million visitors center. But that is just an argument. 

The truth is, if you become a part of the appropriations process, 

you will not be able to do many of these things that I have evidence 

of your being able to do. You won’t be able to supervise bank and 

nonbank mortgage companies. You won’t be able to produce new 

protections against irresponsible mortgage lending. You won’t be 

able to produce new protections for homeowners facing foreclosure. 

You won’t be able to produce a ‘‘Know Before You Owe’’ mortgage 

disclosure program. You won’t be able to stop mortgage servicing 

misconduct. You won’t be able to take action against real estate 

kickbacks. And, in my State, you just took action against a builder, 

who had to surrender more than $100,000 received in a real estate 

kickback scam. 

You will become ineffective if the CFPB is placed under the appropriations process. This is why the design of the CFPB is such 

that you are under another funding source, so that you can have 

some independence, so that you can take some actions that many 

in this country who are big and powerful would find unacceptable. 

This is about helping people who were scammed with loans that 

were a part of the 2008 crisis—the 327s, the 228s, the negative amortization, the no-doc loans. All of these things could have been 

dealt with had we a Consumer Financial Protection Bureau. 

The truth is, it took 66 years to get rid of Glass-Steagall—66 

years—but they did it. They emasculated Glass-Steagall. This is 

why we have a Volcker Rule today, because Glass-Steagall was 

emasculated. It took 66 years, but I say to you, Mr. Cordray, on 

my watch, I am going to do all that I can to protect the Consumer 

Financial Protection Bureau. 

I don’t like the allegations of invidious discrimination, and I 

think they have to be dealt with. And I plan to work with the 

chairman of the Oversight and Investigations Subcommittee to 

48 

make sure we deal with these allegations, not only at the CFPB 

but also at the banks. Many of these banks have similar circumstances that are not being aired. And I think we have to go 

straight to the heart of the matter and deal with it across the 

length and breadth of all of the agencies that come under our purview. 

So I am concerned about this, but I am not going to limit my concern to the CFPB to the extent that it appears that this agency is 

ineffective and ought to be eliminated or emasculated. Not on my 

watch. 

I yield back the balance of my time. 

Mr. MCHENRY. I appreciate that. I thank the gentleman for his 

promptness. 

I will now recognize myself for 5 minutes. 

Yesterday, in Politico and the Washington Examiner, it was 

noted that Ms. Angela Martin, who testified before my subcommittee in April, a CFPB whistleblower—are you familiar with 

Ms. Martin, Mr. Cordray? 

Mr. CORDRAY. Yes. 

Mr. MCHENRY. Okay. 

And, as I remember, back in April you issued a new equal employment opportunity policy saying that you had zero tolerance for 

workplace discrimination and retaliation. 

It was noted in that article that Angela Martin received a financial settlement, that her claim has been settled. 

My question to you, sir, is: The person who was—have you actually taken any disciplinary action against Scott Pluta for retaliating against Ms. Angela Martin? 

Mr. CORDRAY. We have now resolved claims involving Ms. Martin 

on two separate occasions. The first time was in August of 2013. 

There were some difficulties, as I understand it, in implementing— 

Mr. MCHENRY. I am not asking about the claims. I am asking 

whether or not someone who continues to be in your employ, Mr. 

Scott Pluta, whom the allegations were levied against, if he has 

been held accountable for his actions. 

Mr. CORDRAY. I do not have a basis for disciplining Mr. Pluta. 

Mr. MCHENRY. So you have not fired somebody who has been 

proven to be—based off the financial terms of the settlement, it is 

clear to me that there was truth in this, if you are going to make 

such a financial settlement with an employee. 

And, likewise, if you are going to issue taxpayer funds to someone to settle a discrimination and retaliation claim, yet on the 

other side of the ledger not hold someone accountable, it seems irresponsible to me. How would you see it differently? 

Mr. CORDRAY. You said things have been proven. They have not 

been proven. And— 

Mr. MCHENRY. So you gave her— 

Mr. CORDRAY. —the investigation is ongoing. 

Mr. MCHENRY. —Federal money, you gave her taxpayer money, 

on a frivolous claim? 

Mr. CORDRAY. No, it was not—I don’t know that it was a frivolous claim. It hasn’t been proven, okay? 

Mr. MCHENRY. It has not been proven. Have you done an investigation about whether or not it has been proven? 

49 

Mr. CORDRAY. As you know, we began doing an investigation. 

That— 

Mr. MCHENRY. When? 

Mr. CORDRAY. —investigation proved to be defective, which was 

done by the investigator you heard from in front of your subcommittee. 

Mr. MCHENRY. Yes. 

Mr. CORDRAY. We are now reopening that investigation and 

working through it. But I don’t want to— 

Mr. MCHENRY. You are reopening it? 

Mr. CORDRAY. —get into the details of— 

Mr. MCHENRY. I’m sorry. You are reopening that investigation? 

Mr. CORDRAY. It is an ongoing investigation— 

Mr. MCHENRY. When did you reopen that investigation? 

Mr. CORDRAY. Recently— 

Mr. MCHENRY. Okay. 

Mr. CORDRAY. —when we— 

Mr. MCHENRY. Because the Defense Investigators Group gave 

you the report, I think 6 or 7 months ago, if my recollection is correct. Did you start your internal investigation on the investigation 

after that or just when we got the letter yesterday? 

Mr. CORDRAY. You know and you have the letter from me that 

states— 

Mr. MCHENRY. We got it last night, yes. 

Mr. CORDRAY. —that investigation was not according to the 

statement of work. It was deficient. The company has acknowledged it. We have to— 

Mr. MCHENRY. They have not acknowledged it. 

Mr. CORDRAY. —now redo it again. 

Mr. MCHENRY. That is not the testimony we heard, Mr. Cordray. 

In fact, the testimony we heard was that, for the reasons you outline in the letter, that she didn’t have sworn testimony and signed 

transcripts, that was a decision that the Bureau gave her because 

they didn’t want to pay for her travel to D.C. to get signatures. So 

your claims that it is deficient are very dubious at best. 

I want to go to— 

Mr. CORDRAY. I don’t agree with— 

Mr. MCHENRY. —a separate report, because you can debate one 

investigative firm. 

Mr. CORDRAY. Yes. 

Mr. MCHENRY. Revered consulting firm Deloitte was hired by 

OMWI, the Office of Minority and Women Inclusion. The report is 

rather damning: six areas of enormous deficiency within the Bureau dealing with racial disparities, and disparities against women 

as well. 

Yet I read that you have promoted Stuart Ishimaru, who ran 

that office, after this report was received. It seems perplexing to 

me that the person who receives a damning grade from a revered 

consulting firm would receive a promotion. 

How does that work in your department? If you are taking these 

claims and if you are taking these reports of discrimination and retaliation seriously, how can I see that you are taking real action? 

Mr. CORDRAY. You are misstating the actual events. All right? 

That report was commissioned by Mr. Ishimaru as an attempt to 

50 

get a baseline so that he could develop a strategic plan for the 

OMWI office. All right? That was the purpose of the report. 

Mr. MCHENRY. Right. 

Mr. CORDRAY. It was generated for that reason, and— 

Mr. MCHENRY. And it was delivered in September of last year. 

Mr. CORDRAY. End of September last year, that is correct. 

Mr. MCHENRY. And nothing further occurred until the March 6th 

American Banker article— 

Mr. CORDRAY. No, that is not true. 

Mr. MCHENRY. —was published. Well, that is what— 

Mr. CORDRAY. That is not correct. 

Mr. MCHENRY. —the union testified to, that there was no— 

Mr. CORDRAY. No, not correct. 

Mr. MCHENRY. —action against— 

Mr. CORDRAY. The union is not necessarily privy to everything 

that is going on in the agency. 

Mr. MCHENRY. Who is not? 

Mr. CORDRAY. So let me— 

Mr. MCHENRY. Who is not? Who is not privy to— 

Mr. CORDRAY. The union members don’t necessarily know everything— 

Mr. MCHENRY. That is the leaders. 

Mr. CORDRAY. —that I know as the Director. 

They were engaging in negotiations, which they have done. Those 

have been fruitful. They have dealt with the performance review 

system thoroughly. It has now been discarded. We have gone back 

and corrected the effects for employees. 

The report was received at the end of September. It was an internal OMWI report. It was then raised to the level of executive leadership in early November, so pretty short order. We immediately 

began looking at the issues around the performance review system 

because I was concerned about them. And that led to union negotiations of resolution in a matter of a few months. That is very fast. 

We didn’t put this into a legal process and try to defend it and— 

Mr. MCHENRY. Okay. 

Mr. CORDRAY. —resist it for years. 

Mr. MCHENRY. My time has expired. 

Mr. CORDRAY. We resolved it. And— 

Mr. MCHENRY. My time has expired— 

Mr. CORDRAY. —that was appropriate. 

Mr. MCHENRY. —and other Members— 

Mr. CORDRAY. Okay. 

Mr. MCHENRY. We will now go to Mr. Carney of Delaware for 5 

minutes. 

Mr. CARNEY. Thank you very much, Mr. Chairman. 

And thank you, Director Cordray, for coming in again to answer 

questions before this committee. I appreciate what you are doing, 

and I appreciate your personal responsiveness to me and my office 

and staff when we have questions and concerns. 

And thank you for this summary of the activities that you have 

done over the last year. I would just like to highlight a few: you 

have ordered $3.8 billion to be returned back to the pockets of more 

than 12.6 million consumers; you have collected over $141 million 

in civil penalties from the companies that harm consumers; you 

51 

have handled approximately 354,000 consumer complaints; you 

have issued new mortgage rules; you have launched new tools, 

such as Paying for College, Ask CFPB, and debt collection action 

letters that help consumers navigate critical financial decisions. 

You have done a lot on financial literacy. You have heard that 

is an issue that we all are concerned about, creating tools and providing resources to the people that you serve. You have created the 

‘‘Know Before You Owe,’’ which I think is really important. This is 

hard stuff for people. It is hard stuff for those of our constituents 

who are highly educated, and it is even harder for people who 

aren’t and don’t have a lot of access to these resources. 

So thank you so much for what you and the agency are doing. 

I would be remiss if I didn’t say that I am concerned, as well, 

about the complaints of racial discrimination. Very troubling. And 

I take you at your word that you will get to the bottom of this. 

Mr. CORDRAY. Yes. 

Mr. CARNEY. These things just can’t happen. And I appreciate 

that. 

I am going to take you up on your offer for us to come over and 

visit. I am dying to see this fountain and the landscaping around 

which so much has been made. 

I would like to go back to— 

Mr. CORDRAY. Maybe we will run a shuttle bus for you and your 

colleagues. 

Mr. CARNEY. Thank you. Maybe I could do that, lead that effort. 

I would like to go back to something that Mr. Meeks said about 

the QM rule. And I did read the American Banker article. What 

I drew from the article was that it wasn’t having an impact because of the exemptions given to Fannie and Freddie. 

And in your response to Mr. Meeks, you said that the rule has 

latitude and flexibility depending on what Congress might do. 

Mr. CORDRAY. Right. 

Mr. CARNEY. I am a cosponsor with Mr. Delaney and Mr. Himes 

of legislation that we plan to introduce that would replace Fannie 

Mae and Freddie Mac with the functions that would come under 

Ginnie Mae. 

Suppose that would happen; how would the regulations apply? 

And how is that latitude and flexibility, how do you see that happening? 

Mr. CORDRAY. I think at the time we passed the mortgage rules, 

one of the big difficulties—there were a number of difficulties—was 

uncertainty about GSE reform. If and when that issue is resolved 

by the Congress, I imagine anything that might be done would be 

staged in over a period of time, rather than some precipitous 

change. 

Mr. CARNEY. That is what our bill— 

Mr. CORDRAY. And it would be absolutely essential for us to then 

revisit our rules in light of that and probably work with the Congress to understand how all of this should dovetail going forward. 

And that is absolutely what would be needed at that time. 

Mr. CARNEY. So that is something that you will commit to 

doing— 

Mr. CORDRAY. Yes. 

Mr. CARNEY. —depending on what happens? 

52 

Mr. CORDRAY. Absolutely. 

Mr. CARNEY. And we obviously don’t know what is going to happen. 

Mr. CORDRAY. That is right. 

Mr. CARNEY. There is a different approach in the Senate. Actually, this committee has voted the PATH Act out, which would— 

Mr. CORDRAY. That is right. 

Mr. CARNEY. —completely eliminate any Federal guarantee 

there. We don’t think that is the right way to go, and— 

Mr. CORDRAY. Yes. 

Mr. CARNEY. —we have an alternative to that. 

Mr. CORDRAY. We didn’t know then. We don’t know now. We 

tried to build in flexibility, and I think it reflects a sensible approach to those rules that we did that. 

Mr. CARNEY. You and I have talked about student loan debt before and all of that, and I have expressed my concerns to you. I 

have asked, kind of, for your advice as a professional, as a smart 

guy, not so much as the head of the CFPB. 

And you have been reluctant to share your own views on what 

we should do. Somebody asked you, a minute ago, about the legislation that passed in the Senate that would enable students to pay 

a percentage of their income, and you kind of deflected that. 

Do you have any thoughts, any further thoughts, based on your 

more recent experience with what you are seeing out there in the 

marketplace? 

I notice you say that the student debt can have a domino effect 

on the rest of the economy, and we have had some discussion about 

that. 

Mr. CORDRAY. Yes. So, look, in my capacity just as an informed 

public official, not on behalf of the Bureau— 

Mr. CARNEY. And a parent. 

Mr. CORDRAY. I am very concerned as a parent, yes, and as a citizen about the fact that tuition costs continue to spiral in ways that 

are unbelievably dramatic around the country. I saw figures recently that the cost of tuition at our higher institutions went up, 

it was—I don’t have the exact numbers, but it was something like 

580 percent over a period of time where inflation— 

Mr. CARNEY. 600 percent. 

Mr. CORDRAY. —and even things like housing costs and other 

things went up at a much lower pace. 

Mr. CARNEY. Twice healthcare costs. 

Mr. CORDRAY. And this is an example of something that goes 

well beyond the Consumer Bureau. We end up with the back end, 

holding the bag on this problem. People have all these costs. We 

got to it at the State and local level. And the institutions themselves have to think hard about the costs they are imposing on the 

American public, and they have to get to be more efficient. 

Mr. MCHENRY. The gentleman’s time has expired. 

Mr. CARNEY. Thank you. 

Mr. MCHENRY. We will now go to Mr. Huizenga of Michigan for 

5 minutes. 

Mr. HUIZENGA. Thank you, Mr. Chairman. 

And, Director Cordray, I appreciate you being here. 

53 

I know this is tough, coming up here. You feel badgered, feel beat 

up. I am going to try not to do that. 

Mr. CORDRAY. It is part of my job. 

Mr. HUIZENGA. I know it is part of your job, but I am going to 

try not to do that. I actually have some serious questions, though. 

On January 28th, we had a hearing where you testified and I 

had submitted a question with a series—four different points, subpoints, kind of, under it. We received the answers yesterday. That 

is 6 months, well, to be fair, 51⁄2 months. Is that an acceptable 

timeframe to be getting back to an oversight committee like we are 

with some pretty basic questions? 

Mr. CORDRAY. It is not the timeframe I would like, but if I had 

a set of questions from you and I was responding to you, that 

would be one thing. We have had quite a few follow-ups and document requests and emails and other things from this committee, 

which is fine, that is the committee’s job, but it has been a burdensome load for us. We are trying to get back as timely as possible. 

Some things we can get back more quickly, some things more slowly. I will say, it is always true that a committee hearing like this 

concentrates the mind and causes us to get some things done because we know that it is time— 

Mr. HUIZENGA. Okay. 

Mr. CORDRAY. —to do so. But— 

Mr. HUIZENGA. Well, I have a— 

Mr. CORDRAY. —we have been under tremendous strain to accomplish all of it. 

Mr. HUIZENGA. —couple of other questions regarding QM. One of 

them is a repeat of the question from January, and this was from 

our hearing with Meredith Fuchs on April 8th. 

Mr. CORDRAY. Yes. 

Mr. HUIZENGA. Any idea when those might be coming back? 

Mr. CORDRAY. Sorry, so what is the question? 

Mr. HUIZENGA. So I am just—a set of four simple questions. 

Mr. CORDRAY. Yes. 

Mr. HUIZENGA. Some of them are slightly modified from earlier 

answers, where basically—the answers you gave us from yesterday 

were, ‘‘Well, we are monitoring the situation.’’ So do I have to wait 

another 6 months to get the answers for this set, or, hopefully, will 

that be quicker? 

Mr. CORDRAY. I’m sorry. So you are putting out a set today, a 

new set? Or— 

Mr. HUIZENGA. No. This is from—these were submitted to you on 

April 8th. 

Mr. CORDRAY. Okay. 

Mr. HUIZENGA. So I am just—how about we work better than 51⁄2

months? Can we agree to that? 

Mr. CORDRAY. We will absolutely do our best. 

Mr. HUIZENGA. Okay. 

Mr. CORDRAY. Yes. 

Mr. HUIZENGA. Perfect. 

Openness and transparency. It seems to me that the goal—I 

wasn’t here for the creation of Dodd-Frank. I am dealing with the 

echo effects of it. It seems to me that it was to ensure systems were 

more transparent and easier for consumers. Is that happening? 

54 

Mr. CORDRAY. I think it is in some areas. We are working to 

make it happen in some areas. I actually do think that the tenor 

of the market has moved in some considerable way in that direction, with a lot more work yet to do. 

Mr. HUIZENGA. I would agree with that. There is the a-lot-morework part. The disclosures that I see now, when we all get our 

credit cards or our bank card statements, certainly are not easier. 

They are more confusing, I think, to the people in the general public. It is frustrating for those who are running the operations; it is 

frustrating for those of us receiving it. And I am afraid that is 

bleeding out into other areas, including our QM situation, which 

was some of my questioning from back in January and part of my 

question. 

So, I will give you a preview. Or, actually, this was from April 

8th, so I will do a vocal follow-up here, I guess, on dealing with the 

QM rules. 

A recommendation had been to increase the threshold of ‘‘small 

loans’’ from $100,000 to $200,000. The answer you gave to me from 

that question back in January was, ‘‘Well, it could have been 

worse. It was $75,000. We increased it up to $100,000.’’ 

One, do you have the legal authority to increase the amount? 

And if so, why haven’t you increased the threshold? That is one of 

the questions that I have. 

The other one—and I am very concerned about this—is that 

‘‘QM’’ is quickly become known as ‘‘quitting mortgages.’’ When you 

talk to small lenders especially, they are trying to enter into this 

and do the right thing. They are not the people who caused any of 

this housing bubble, for the most part. They are not the people who 

have these nameless, faceless relationships. These are the people 

who are meeting their customers day to day. I was a REALTOR® 

for a number of years. I dealt with that. 

But how do we reconcile this one-size-fits-all approach taken by 

CFPB promulgating these QM rules and to promote consumer 

choice and facilitate access to that marketplace when it doesn’t 

seem to be happening? 

Mr. CORDRAY. I actually agree with you on this about the smaller 

lenders. And we actually did not take a one-size-fits-all approach. 

We had a special small-creditor provision for any institution with 

less than $2 billion in assets and makes 500 or fewer mortgages 

a year. Everything they do, whether it is sold to Fannie or Freddie 

or it is kept in portfolio, is a QM with a safe harbor. 

And I have had— 

Mr. HUIZENGA. Two billion dollars is a pretty low threshold, 

though. 

Mr. CORDRAY. —conversations with dozens of smaller creditors 

who say this, ‘‘Well, we are going to have to get out of the mortgage 

market,’’ and when I talk it through with them, it is clear that they 

didn’t understand that part of the rule, and we are trying to get 

the word out to them. I know the trade associations need to work 

harder at getting the word out to them. 

But it wasn’t one-size-fits-all. There are special provisions for the 

small creditors. And we are happy to consider more. 

Mr. MCHENRY. The gentleman’s time has expired. 

Mr. HUIZENGA. I appreciate it. Thank you. 

55 

Mr. MCHENRY. We have an announcement of House Floor votes. 

I am respectful of your time. I am also respectful of heads of the 

CFPB, their packed schedules. And so, being aware of this— 

Mr. CORDRAY. I am available. 

Mr. MCHENRY. —if we could have Members’ indulgence on time, 

we will now go to Mr. Ellison—I’m sorry, Mr. Heck of Washington, 

the other Washington. 

Mr. HECK. Thank you, Mr. Chairman. 

Director Cordray, thank you very much for being here. I never 

want to miss an opportunity to thank you for your public service 

and that of your agency and, in particular, that of the Office of 

Servicemember Affairs. As somebody who represents Joint Base 

Lewis-McChord, it is deeply appreciated. 

Mr. CORDRAY. Yes. 

Mr. HECK. Although I will add, in actually reading your report, 

I note that the office made 77 outreach visits in the 6-month period 

ending March 31st and none of them were near the largest joint 

operating base in America. 

Mr. CORDRAY. She is in great demand. You put in a request, and 

we will see what we can do. 

Mr. HECK. I would like to follow up on something Mr. Royce 

asked you. And I was very pleased to hear you say that you were 

exploring ways in which the agency might be able to issue advisory 

opinions. 

I want to make sure that you know that, while that bill came out 

on a partisan, divided vote, there are lots of Members on this side 

of the aisle who think that is not just a good idea; they think it 

is a very good idea. And, as a matter of fact, I would suspect, as 

a former attorney general, that your agency probably issued something that in our State, we call attorney general’s opinions— 

Mr. CORDRAY. Yes. 

Mr. HECK. —and even letters that— 

Mr. CORDRAY. About 100 a year. Yes. 

Mr. HECK. This is a good, smart business practice that is winwin. 

Our sensitivity to your concerns about how the bill, as worded 

now, might not work— 

Mr. CORDRAY. Yes. 

Mr. HECK. —is something we want to take into account. So I 

would like you to enumerate, what are the kinds of changes in that 

legislation that would enable you to implement it in a good fashion? 

And please hear me. We think the idea behind this bill is excellent. 

Mr. CORDRAY. I am not at all certain that legislation is needed 

in this area. I don’t think anything prevents us from issuing responses. We do it all the time. In fact, people ask us questions 

about our mortgage rules, and we put out guidance and various 

things, both verbally and in writing. We do that all the time. 

But it is sort of a formal procedure for particular instances where 

people could have some assurance around what the answer is. 

Again, I think we can do that. I think we are doing that in various 

respects. I think we could do it in more respects. 

56 

There are things in the legislation—I am not that familiar with 

the legislation—but mandatory timeframes and everything has to 

be answered. All of that could potentially really impede other work 

of the Bureau. 

I was attorney general in Ohio, as you say, and we did have a 

mechanism under State law for advisory opinions in appropriate 

circumstances from designated people who could ask us those questions, and at times, it was quite helpful. 

Mr. HECK. I heard you say you don’t need legislation to do this. 

Are you hereby now publicly committing that you will pursue the 

development of an advisory opinion process at the agency? 

Mr. CORDRAY. Again, we are actually doing this all the time in 

a somewhat more informal way. People ask us all the time about 

clarifying— 

Mr. HECK. Would you commit to doing it in a more formal way? 

Mr. CORDRAY. I think you can expect to see more from us in this 

area, yes. 

Mr. HECK. So, someone asked, and I do not recall who, about the 

Military Lending Act. I want to remind you that when you were 

here in January, I asked you, given the tardiness of the Department of Defense’s issuance of regulations, maybe it was time to actually place the responsibility for rulemaking with the agency that 

has the most expertise in this regard. Frankly, that is you. 

Here we are, 6 months later, no rule. And you demurred under 

very appropriate diplomatic terminology, but, Director Cordray, it 

is time. I realize getting it right should come before getting it done 

now, but is it not time for us to call for this responsibility to be 

placed with the agency that actually has the deepest expertise on 

how to go about this? 

Mr. CORDRAY. I think that is actually what Congress did in the 

Dodd-Frank Act. And then later, when they reopened the Military 

Lending Act at the end of 2012, they gave the authority to the Department of Defense, but they urged them to work with the other 

agencies and explicitly said that they should consult with the 

CFPB. 

We have worked with them. It has been a very fruitful partnership— 

Mr. HECK. It is not fruitful in the sense of having the regulations. 

Mr. CORDRAY. No, it actually is. There is pretty much a final 

version of a regulation, is my understanding. It has been working 

its way through the Department of Defense, and soon will be on its 

way to the Office of Management and Budget, which is a required 

step they have to take, and very shortly thereafter will be proposed 

publicly. And I think you will see it is going to be a good rule. And 

the Department of Defense has worked hard on this. They have 

many other things to do, I think we are well aware. I think people 

should continue to express interest in this, and that will be helpful. 

But I think things have moved along quite a bit, and I think we 

are on the verge of something going out— 

Mr. MCHENRY. The gentleman’s time has expired. 

We will now go to the vice chairman of our Financial Institutions 

Subcommittee, Mr. Duffy of Wisconsin. 

Mr. DUFFY. Thank you, Mr. Chairman. 

57 

Mr. Cordray, the National Mortgage Database, invasive, but, per 

your testimony today, I think you are telling us it is a pretty good 

database that is going to help you with good information to make 

rules. Yes? 

Mr. CORDRAY. That is the intention. Yes. 

Mr. DUFFY. Okay. And that database, per your testimony, is a 

database that samples information, 5 percent, per your testimony. 

Mr. CORDRAY. That is correct. 

Mr. DUFFY. I would just like to bring up my point in our prior 

conversations, that I have asked you to actually sample data with 

regard to credit card information. 

Mr. CORDRAY. Yes. 

Mr. DUFFY. You could get similar good data instead of taking 

nearly a billion credit cards and sampling—actually, collecting data 

off those credit cards. I think you have made the point with the 

National Mortgage Database, and you should then apply that to 

the credit cards. Fair point? 

Mr. CORDRAY. I understand that. And what I want you to know 

is we are listening, we are hearing, and where we can do sampling 

and that will be sufficient, that is fine. Where we ask about the 

data and they say it is just easier for us to send you all of it rather 

than us having to cut out a sample and it may not be— 

Mr. DUFFY. Well, don’t ask for it all. Just ask for 5 percent. I am 

sure you— 

Mr. CORDRAY. Yes. 

Mr. DUFFY. —could make the same argument, too, with the National Mortgage Database; it is just easier to give it all. Listen— 

Mr. CORDRAY. Yes. We will go back and continue to think further 

about that. 

Mr. DUFFY. I would appreciate that. 

Now, I think your testimony was also—you indicated that you 

don’t care about information personal to me. I think that was your 

quote. Is that correct? 

Mr. CORDRAY. I really don’t care about your— 

Mr. DUFFY. I am going to tell you something. 

Mr. CORDRAY. —particular spending habits and the like. 

Mr. DUFFY. Why don’t— 

Mr. CORDRAY. Although I understand you have a new arrival, so 

you probably have some— 

Mr. DUFFY. I do. 

Mr. CORDRAY. —economic burdens. 

Mr. DUFFY. That is what I was going to bring up. I do care— 

Mr. CORDRAY. Yes. 

Mr. DUFFY. —that you know the number of children I have and 

the ages of my children. I care about that. That is personal to me. 

Mr. CORDRAY. I don’t have that. 

Mr. DUFFY. Also personal to me are my religion, my phone number, my race, and my education. My education records are personal 

to me. 

Mr. CORDRAY. Yes. 

Mr. DUFFY. And here you have indicated to all of us that you are 

going to collect it. 

58 

Now, I want to ask you about that collection, because on December 10, 2012, a SORN notice went out about this new mortgage 

database. 

Mr. CORDRAY. Yes. 

Mr. DUFFY. And it was pretty straightforward, and it didn’t get 

much of a rise out of Congress. Basically, you were going to collect 

loan level information. But you have now reissued it and greatly 

expanded the information that is going to be collected. And that 

has been a topic of many people here today, and I think it has a 

lot of concern for not just Members of Congress but for America as 

a whole. 

Is it your testimony that you are only collecting religious affiliation or numbers of children and ages but then parsing it out and 

it doesn’t go into the database? Is that your testimony? 

Mr. CORDRAY. We are not doing it. A credit reporting agency that 

actually handles that kind of information all the time is doing it 

so that my employees will only see de-identified information. That 

is the effort here. And the same is true of the FHFA. 

Mr. DUFFY. So I want to— 

Mr. CORDRAY. We think it is responsible. 

Mr. DUFFY. —talk about your notice, then. 

Mr. CORDRAY. Yes. 

Mr. DUFFY. Because the notice says, ‘‘The revised system of 

records notice is set out in its entirety and described in detail 

below. The revisions expand the category of records that will be collected, maintained, and stored in the system as well as make 

‘minor’ changes and clarifications.’’ 

So you don’t tell us, I am going to just collect all these data 

points that concern us. You tell us here that you are going to collect it, maintain it, and store it. 

And, Mr. Cordray, you have been here 5 times. You are a smart 

man, very smart, and you have a lot of smart people who work for 

you. When you put these out, you know exactly what you are doing. 

And you didn’t specify, we are going to collect all of this information that concerns us but we are only going to store a certain portion of that which was collected. You didn’t specify it here. You are 

collecting, maintaining, and storing, per your notice. 

Mr. CORDRAY. So, again, the point of the SORNs, they are typically written very broadly— 

Mr. DUFFY. That is not—I am not going to go into your— 

Mr. CORDRAY. —so that— 

Mr. DUFFY. We are not going to talk about— 

Mr. CORDRAY. —they— 

Mr. DUFFY. I just want an answer— 

Mr. CORDRAY. But I can tell you— 

Mr. DUFFY. —why you wrote it that way. 

Mr. CORDRAY. —what we are doing about the database. I think 

it is in line with what— 

Mr. DUFFY. I want to ask you one more question. 

Mr. CORDRAY. —you expect. And we are happy to keep you posted on it. 

Mr. DUFFY. You are giving me the color of a song— 

Mr. CORDRAY. Okay. 

Mr. DUFFY. —to quote— 

59 

Mr. CORDRAY. I am trying to help you. 

Mr. DUFFY. —your prior testimony. 

Mr. CORDRAY. Yes. 

Mr. DUFFY. I introduced a bill that would require you to ask for 

permission from Americans before you collect their information. I 

imagine you don’t support that bill. 

Mr. CORDRAY. It just wouldn’t be workable. 

Mr. DUFFY. Let me ask you a question. Would you support a bill 

that would say something like this: You can collect the consumer’s 

personal information only with their consent and notify consumers 

regarding their collection and use of personal information, including purpose, method, and scope of use. Would you support that bill? 

Mr. CORDRAY. So, we are not going to use that personally— 

Mr. DUFFY. Would you support a bill like that? 

Mr. CORDRAY. —identifiable information— 

Mr. DUFFY. Would you support a bill like that? 

Mr. CORDRAY. It would render— 

Mr. DUFFY. Would you— 

Mr. CORDRAY. It would render— 

Mr. DUFFY. Come on, Mr. Cordray, just answer my question. 

Would you support a bill like that? 

Mr. CORDRAY. I don’t typically take positions on legislation, but 

that would make it unworkable for us to have data. We would be 

blind to the mortgage market— 

Mr. DUFFY. I am going to give you a little notice here. 

Mr. CORDRAY. —and the mortgage crisis and all that. 

Mr. DUFFY. This law exists. It exists. Do you know where? Communist China. 

I yield back. 

Mr. MCHENRY. The gentleman’s time has expired. Strong note. 

Mr. Ellison of Minnesota is now recognized for 5 minutes. 

Mr. ELLISON. Let me thank the Chair and the ranking member. 

And Mr. Cordray, thanks for being here today. 

I just want to note for the record that the CFPB is investigating 

more than 354,000 consumer complaints. I have a picture up on the 

screen of the breakdown of the complaints that you get. You are 

getting complaints about payday loans, money transfers, student 

loans, consumer loans, and credit cards. 

Does the volume of complaints that you get assure you that, 

without regard to what anybody else might say, the American people feel that your agency is important and is there to help them? 

Mr. CORDRAY. And I actually think many more American people 

would want to bring complaints to us but don’t yet know to do that. 

Yes, I do. 

Mr. ELLISON. Yes. 

So, also, I am kind of concerned about the market for buyers of 

manufactured homes. I requested information from the Manufactured Housing Institute about their largest lenders and their loan 

data, and they recommended that I get the information on their industry from the CFPB. 

Now, what has been the CFPB’s approach to assessing potential 

concerns about these borrowers’ financing options? 

Mr. CORDRAY. Frankly, I would be happy to have you get it from 

them and then share it with us. We have been trying to get inforVerDate Nov 24 2008 18:33 Jan 30, 2015 Jkt 091148 PO 00000 Frm 00063 Fmt 6633 Sfmt 6633 K:\DOCS\91148.TXT TERRI
60 

mation, and we would like to have more. This is an issue that came 

up in this committee the last time I was here. There is a lot of interest in it. We have interest in it, as well. We are trying to understand that market. 

I will say—and Mr. Chairman and others may be interested; I 

know you will, too—we are working on a White Paper on manufactured housing that we want to put out hopefully toward the end 

of summer that will bring you up to date on what we know about 

it. And if there are issues or problems in this industry, we want 

to consider and potentially address them. 

I will say, some of the concerns that have been stated don’t necessarily jibe with some of the data. We saw that the division of 

Berkshire Hathaway that focuses on manufactured homes, their 

profit was up 60 percent this first quarter over a year ago. It is not 

at all clear that manufactured housing is lagging in any particular 

way. But that is the kind of data we need to understand in order 

to assess whether there is a problem; if so, what the problem is; 

and what could or should be done about it. 

Mr. ELLISON. There is a bill in front of the Congress now called 

the Preserving Access to Manufactured Housing Act. It is presented as a bill—it is H.R. 1779—that is designed to help occupants of manufactured housing, the idea being that people aren’t 

lending to this market, and that if we allowed lenders to assess 

higher interest rates on these people, it would attract them to the 

market. 

Do you have any views on this particular piece of legislation you 

are in a position to share today? 

Mr. CORDRAY. This is the same as with all aspects of the mortgage market since the rules took effect. We are interested in people 

bringing us data. 

Mr. ELLISON. Right. 

Mr. CORDRAY. If, in fact, they aren’t lending, if that is true, we 

would like to know the facts on that. We want to also know why 

that is so and want to think about whether something could be 

done about it. 

We are interested in data here. We would like to have data. Industry has data, and if they would share it with us, that would 

help us all see the picture more clearly, and then we could talk and 

consider together. And we are very accessible to them, but we need 

data. 

This White Paper we are going to put out will help a little bit, 

I think, to clarify the situation. And maybe that will prompt people 

to think more specifically about other things they can bring us and 

show us. 

Mr. ELLISON. Thank you, sir. 

My last question—and then I am going to yield back after you 

answer—is, what can you tell us about the CFPB and their activities to ensure auto buyers are not overcharged due to their ethnicity or protected factors like race? 

Mr. CORDRAY. So what I can say is we worked with the Justice 

Department and resolved a very significant auto-lending discrimination matter in December—$98 million, a significant remediation 

to consumers. 

61 

We continue to work on the problem and try to understand it. 

And we are interested in working with industry so that they can 

understand how we might be able to approach this and resolve it 

on a broader basis. And there was suggestion earlier that people 

might be willing to come to us and talk to us about a rule. We are 

open-minded and welcome all discussions. And, although we have 

been very careful about not reaching out aggressively to dealers, 

because they are not within our jurisdiction and Congress specified 

that and we need to be respectful of that, as they have been wanting to come to talk to us, we have been trying to open the door to 

that and see how we can understand their concerns, as well, again, 

trying to respect very carefully our jurisdiction and not overstep 

our bounds. 

Mr. ELLISON. I just want to say briefly, please rout out discrimination in your agency and any other agency. Rout it out, because 

it gives you the moral authority to protect these buyers, who are— 

Mr. CORDRAY. I hear you loud and clear on that, sir. Yes. 

Ms. WATERS. Will the gentleman yield? 

Mr. ELLISON. I will. 

Ms. WATERS. Thank you for raising the question about manufactured housing. And I think that the information that was shared 

with us about what you are doing will help us to ask for them not 

to take up the bill until we get this information. 

Chairman HENSARLING. The time of the gentleman has expired. 

We have three remaining Members. We have votes on the Floor. 

If the Members wish to voluntarily restrain themselves to 4 minutes, I think we could conclude and allow our witness to exit. 

The Chair now recognizes the gentleman from Tennessee, Mr. 

Fincher. 

Mr. FINCHER. Thank you, Mr. Chairman. 

And, Mr. Cordray, thank you for coming today. Manufactured 

housing has turned out to be a big issue in this committee. The last 

time you were here, several of us talked to you about it. You and 

I have had a conference call about trying to fix this issue. 

Mr. CORDRAY. Yes. 

Mr. FINCHER. Since the CFPB’s new rules for HOEPA went into 

effect January 1st, manufactured-home lenders have stopped making loans that are less than $20,000. A $20,000 loan allows many 

families the opportunity to buy a starter home, build equity, and 

gain homeownership or sell a home and move to something better. 

You made a statement a few minutes ago to my colleague, Mr. 

Ellison, about profits being up. This has nothing to do with profits 

of manufactured-home businesses, sellers. This has to do with access to consumers being able to purchase a product. The CFPB’s 

new rules have caused a reduction of credit to low- and moderateincome borrowers with low credit scores, particularly those in 

rural, distressed, and underserved areas. 

In conversations between the CFPB and my office, we have been 

told that the Bureau wants more data in this area. Voluntarily, at 

the request of the CFPB, leading manufactured-home lenders have 

provided a significant amount of data—4,000 pages, to be exact— 

in this regard on March 6th and March 24th of this year. It is my 

understanding that this data represents roughly one-third of the 

lending activity in the manufactured-home market. 

62 

In addition, data was given to the CFPB on the following dates 

during meetings between the industry and your staff: June 18, 

2012; August 7, 2012; December 17, 2012; May 17, 2013; and September 23, 2013. 

It is also my understanding that the CFPB has, on their own initiative, communicated with additional manufactured-home lenders. 

I am just going to kind of skip through some of this to hopefully 

leave time for my other colleagues. 

Mr. CORDRAY. Sure. 

Mr. FINCHER. Number one, can you confirm that the CFPB has 

received data from the leading lenders in the manufactured-home 

market? Just ‘‘yes’’ or ‘‘no.’’ 

Mr. CORDRAY. Yes. 

Mr. FINCHER. Okay. 

Mr. CORDRAY. Not all that we want. And the March data will be 

most relevant. And, to be honest, in our efforts to protect against 

personally identifiable information, we have had to have some 

back-and-forth with the people who submitted that data to make 

sure it is being handled correctly. And I believe it will be helpful 

to us. Yes. 

Mr. FINCHER. Okay. 

You have the ability to mitigate the impact of Dodd-Frank, 

HOEPA, and loan origination rules on manufactured-home owners 

and the industry that serves them, but you continue to delay after 

the industry thoroughly complied with your data request. 

My other question—and this has been, I guess, today, much more 

than about manufactured homes. The data that you are collecting, 

is it the practice of your agency to collect this data and do nothing 

with it? 

Mr. CORDRAY. That is not our practice. 

Mr. FINCHER. Okay. 

Mr. CORDRAY. Look, I am not collecting data because I am collecting baseball cards or something. This is information necessary 

so that we can do things that all of you want: We can understand 

what is happening in the mortgage market, whether the rules are 

getting it right or getting it wrong; whether the Credit CARD Act 

is helping or hurting, and if not, whether Congress wants to reconsider some of it or whether we should reconsider. That is the kind 

of information we need. 

Mr. FINCHER. We want to get this fixed. We have a bill with over 

100 cosponsors. This is bipartisan. This is not rocket science, Director. We have been willing to negotiate and try to make this bill 

more— 

Mr. CORDRAY. There are a number of bills. Which one are you 

talking about? 

Mr. FINCHER. We are working to make it where we can pass this 

through the House, get this problem fixed with the industry—and 

more than the industry. This is not about the industry. 

Mr. CORDRAY. What is ‘‘this?’’ Is it data collection, or is it manufactured housing, or— 

Mr. FINCHER. Manufactured housing. 

Mr. CORDRAY. Okay. I see. 

63 

Mr. FINCHER. This is about the consumer having and being able 

to purchase a product. That is what this is about. This is not about 

business. This is about the consumer. 

So, we are going to keep working, and hopefully you will be given 

the data that you need. 

Mr. CORDRAY. Yes. 

Mr. FINCHER. And, with that, Mr. Chairman, I yield back. 

Mr. CORDRAY. And— 

Chairman HENSARLING. The gentleman yields back. 

The Chair now recognizes— 

Mr. CORDRAY. Could I— 

Chairman HENSARLING. —the gentleman from Illinois, Mr.— 

Mr. CORDRAY. Mr. Chairman? 

Chairman HENSARLING. —Hultgren, and informs remaining 

Members that there is about 81⁄2 minutes left on the vote on the 

Floor. 

Mr. CORDRAY. All right. 

Mr. HULTGREN. Thanks, Mr. Chairman. 

Director Cordray, I would like to focus on why the CFPB is 

spending money to renovate a building it doesn’t own. We have not 

received a satisfactory answer yet on this question. 

Just last week, you testified before the Senate Banking Committee that the building renovation costs were ‘‘taken account of in 

the lease that we negotiated with the OCC so that our lease payments were less over the 30 years to take account of the fact that 

we, not the landlord, would be making the improvements to the 

building.’’ 

This is not what the OCC tells us. In fact, they say, and I quote, 

‘‘The OCC contracted with an independent real estate appraiser to 

determine the fair market value of 1700 G Street and a fair market 

rental rate. The appraisal considered the current condition of the 

building. The fair market value of the building and the fair market 

rental rate were not based on any assumption that the building 

would be renovated or upgraded. Rather, the fair market value was 

based on the assumption that the building would be leased as is. 

The appraiser determined a fair market range for the rental rate. 

The agreement between the OCC and the CFPB provides for a triple net rate that reflects the midpoint range of the appraisal.’’ 

I have several questions on this. Director Cordray, how do you— 

Mr. CORDRAY. That is consistent with what I am saying. 

Mr HULTGREN. Let me finish my questions. 

How do you reconcile the OCC statements with your own testimony, first of all? Will you provide the committee with documentation substantiating those claims? 

And if, as you previously testified, the Bureau knew that at least 

$100 million would be needed to renovate the building, yet this cost 

would not be taken into account in rent, as the OCC asserts, why 

would the Bureau volunteer to make these renovations rather than 

find a more suitable location? How does this make any fiscal sense? 

And do you not have an obligation to expend your agency’s funds 

responsibly? 

Mr. CORDRAY. Let me try to lay this out. And I really want to 

get this across, because what you said is just consistent with what 

I have said. 

64 

What the OCC did was they put together a lease and they set 

a rate based on the as-is condition of the building, which right now 

is classed, generously in my view, as a Class C building, barely 

subpar. So that is the rent that we are paying over the 30 years. 

After we do these renovations, we hope that the building will at 

least be a Class B building. I don’t know if it will ever get to be 

a Class A building. That would be a higher rent. 

Having done the renovation ourselves, we will then have potentially a Class B building for the remainder of the occupancy agreement, which is a significant amount of time, paying Class C rent. 

That is the difference between the two, and it comes out exactly as 

I tried to lay it out. 

Mr. HULTGREN. Yes, it seems like a conflict to me, and it seems 

like a misuse of taxpayer dollars, when certainly there could have 

been something available that would be much more appropriate. 

Let me move on to the QM rule. The CFPB has adopted policies 

that have increased legal uncertainty rather than alleviate that uncertainty, which has hurt the growth of the mortgage market. 

One example is the CFPB’s decision not to preclude the use of 

oral evidence in cases brought by borrowers claiming that they did 

not have an ability to repay. In its QM rule, the CFPB states that 

the Bureau believes that courts would determine the weight to be 

given to such evidence on a case-by-case basis. In response to this 

decision, we have heard that banks and credit unions will need to 

videotape closings to have a record of everything a borrower says 

at the closing table. 

Have you heard about this problem? Is this an example of the 

CFPB’s policies creating new compliance burdens and massive legal 

uncertainty for smaller lenders already struggling under the regulatory onslaught unleashed by the Dodd-Frank Act? 

And I wondered if you would be willing to reconsider this decision to provide more certainty to community financial institutions 

that are suffering under the weight of regulatory burden and uncertainty. 

Mr. CORDRAY. So, two things. The first is that we now have some 

months of data, and there has not been a huge spike in interest 

rates because of risk around potential litigation. We predicted that 

there would not be any significant spike. There has not been. And 

I think the market has pretty much— 

Mr. HULTGREN. I think the biggest concern I have heard is compliance burdens. And that is a concern. The idea of having to videotape closings is ridiculous, and yet that is the concern. 

Mr. CORDRAY. If somebody wants to— 

Mr. HULTGREN. My time has expired. I am going to yield back 

the balance of my time so Mr. Ross can finish up. 

Mr. Chairman, I yield back. 

Mr. CORDRAY. We are working to streamline the closing process, 

and that is an exciting initiative of the Bureau. 

Chairman HENSARLING. The gentleman has yielded back. 

The Chair now recognizes the gentleman from Florida, Mr. Ross. 

Mr. ROSS. Thank you, Mr. Chairman. 

Director Cordray, the semi-annual report states, ‘‘The Bureau is 

in the process of considering what regulations to propose to address 

65 

issues in the market for small-dollar credit that have been identified through the Bureau’s research and public engagement.’’ 

And I have discussed this with you before with regard to payday 

lending and small-dollar credit. I come from Florida; we have a 

great law in that regard. I understand you have been working with 

Commissioner Breakspear at the Office of Financial Services. 

What is your timeline in issuing regulations in that particular industry for small-dollar credit? 

Mr. CORDRAY. We just published our unified agenda, which kind 

of lays out the immediate future in terms of potential rulemakings 

at the Bureau. That is something we did and we published on our 

Web site in response to an oversight question I got from Congressman McHenry a number of sessions ago. We indicated that on the 

payday lending, we will be writing rules. We expect those to potentially come out in a Small Business Regulatory Enforcement Fairness Act (SBREFA) process sometime later this fall, and that 

would be— 

Mr. ROSS. Okay. 

Mr. CORDRAY. —our expectation. 

Mr. ROSS. So within the next 6 months, easily? 

Mr. CORDRAY. I think that is fair, yes. 

Mr. ROSS. Okay. 

You testified to Mr. Luetkemeyer that you are not actively participating in the Operation Choke Point, yet many of the businesses that are being affected by this come under your regulation. 

Do you feel that you are being usurped, your authority is being 

usurped by bank examiners or banking regulators that are engaged 

in the Operation Choke Point? 

Mr. CORDRAY. I don’t think so. The reality is—and I found this 

when I came into the Bureau, and I was a little surprised because 

I just didn’t know how these things worked at the Federal level— 

there are a number of Federal banking agencies with some real 

overlap among them. That is alleviated by us working together in 

a close and collaborative fashion— 

Mr. ROSS. But do you— 

Mr. CORDRAY. —which we try to do. 

Mr. ROSS. Are you working with them under that operation? 

Mr. CORDRAY. What we try do is pay attention to know-your-customer issues, and— 

Mr. ROSS. Now, there is a $17-billion business— 

Mr. CORDRAY. —that is important. 

Mr. ROSS. —out there in consumer loans and small-dollar credit. 

Mr. CORDRAY. Yes. 

Mr. ROSS. Operation Choke Point, if it were to eliminate, due to 

reputational risk, this particular supply, if you will, the demand 

will remain. What will happen to those consumers who need this 

particular market niche? 

Mr. CORDRAY. What we are working on right now is potential 

regulations that you and I just discussed for the industry. 

Mr. ROSS. Right, but when you— 

Mr. CORDRAY. That is not consistent with wiping out the industry. It is regulations to make sure that the industry is working in 

a pro-consumer fashion. That is our intent. 

66 

I have recognized and acknowledged the demand for small-dollar 

credit. People— 

Mr. ROSS. It will be there. 

Mr. CORDRAY. —have that demand. 

Mr. ROSS. And if they don’t have it in a regulated fashion, they 

are going to get it in a black-market fashion, and that is even more 

harmful to the consumer. 

Mr. CORDRAY. I agree with you on that. 

Mr. ROSS. Finally, with regard to the rule of law, and, as a lawyer, you believe in due process and— 

Mr. CORDRAY. I do. 

Mr. ROSS. —bulletins, the issuance of bulletins, they don’t hold 

the force and effect of a regulation or statutory law. Yet, you continue to issue bulletins, which don’t allow for public comment, in 

lieu of issuing even interim rules and regulations. Why is that? 

And what can be done soon to get that resolved? 

Mr. CORDRAY. So, again, my understanding of the Administrative 

Procedure Act, it goes back about 70 years now, is that there is a 

distinction between substantive rules that change the law, and notice and comment is required, and then guidance and other things 

that agencies use quite a bit, which is not really a change in the 

law, it is just a clarification or restatement of the law so that people can understand more clearly what— 

Mr. ROSS. So your April 30th press release commending BMO 

Harris for adopting the pay scheme recommended by the CFPB is 

a guidance, it is not a substantive law? 

Mr. CORDRAY. That was just a statement to the media. That is 

all that was. Yes. 

Mr. ROSS. Mr. Chairman— 

Mr. CORDRAY. But I meant what I said. But it was— 

Mr. ROSS. —I yield back. 

Chairman HENSARLING. The gentleman yields back. 

I want to thank Director Cordray for his testimony today. 

The Chair notes that some Members may have additional questions for this witness, which they may wish to submit in writing. 

Without objection, the hearing record will remain open for 5 legislative days for Members to submit written questions to this witness 

and to place his responses in the record. Also, without objection, 

Members will have 5 legislative days to submit extraneous materials to the Chair for inclusion in the record. 

This hearing stands adjourned. 

[Whereupon, at 1:15 p.m., the hearing was adjourned.] 

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A P P E N D I X 

June 18, 2014 

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