so, you know, people are clever and if they're bad and clever, they don't need guns to do negative things. based on what we've seen, we'd like to pose the question to president trump and the congress. >> what will you do about gun control and gun violence in america? we need to stop terrorism and mass shootings. >> and yet abide by the second amendment. >> we are confident that your collective experts will -- >> more gun control, to be or not to be -- >> that is the question. thanks for watching. >> to watch all of the prize-winning documentries in this year's student cam competition, visit tudentcam.org. >> consent order --

>> and here on c-span we take you live to the house financial services committee. they're holding a hearing this morning with the director of the consumer financial protection bureau, richard y,nebymra. mr ilud..anprlewi t dsn vla fts. re renouhe'slledag t b t

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dmp wh y .ofgen s pid.rdon?.inns rdy:inthreon t naee cuntnonasta a ath athedr maha ex tlromrsh mrhe cordray, thank you for your service. i want a socialate myself with the ranking member's praise of you. except for the part, perhaps, where she posited the possibility that drum would appoint you for another term. nothing other than that could diminish the high esteem that i

have for you. we have up behind you on the board the trade deficit statistics. i know that we didn't have quite as big trade deficit last month as expected but that was a quirk because of the chinese new year. and some interruption in shipments. mr. cordray, we have the know before you owe mortgage disclosures that resulted in transparency for consumers, better accountability, financial institution but ongoing compliance issues remain costing time and money for consumers and for the industry. when will the latest proposed rule be finalized, and do you plan to issue any additional guidance clarifying this rule that could be relied upon the industry as implementation continues? mr. cordray: it's apparently not

appropriate for us to comment on timing of rule making since they are pending. these are issues like judicial opinions. they are done when they are done. i'm not sure what to tell you there. mr. sherman: you understand the socio-utility of being done as expeditiously as you can be? mr. cordray: i always do and i'm sometimes disappointed at how slowly the federal government works even though i'm trying to be there and make it work faster, yes. mr. sherman: we have these pace loans which are home improvement loans for alternate energy but they are structure part of the property tax bill. are you sure your agency -- they are basically home improvement loans can't expert jurisdiction in thisaire? mr. cordray: it's a pretty complicated subject is what i have learned because in the states where those exist typically the state legislature

has passed state laws that provide for priority leans -- liens which involves the government in both the making and collection of those loans and that's a very significant complicating factor for us. it's something that we have a team of people looking at and trying to work through we're hearing now about it to be concerned. mr. sherman: i would hope your legal staff would work with us. i hope this is an area -- home improvement loans is an area you ought to be involved in. if you need -- mr. cordray: home improvement loans we're involved in. this is where there is government tax liens passed by state law. . erman:his is a special, super duper home improvement loan. if you need lislationop ate wldorthis. studies have shown in some geographic areas it's possible to determine the identity of nearly 100% of the borrowers using the data that lenders are required to collect and report

by the home mortgage disclosure act. this is despite the fact that that act is supposedly provides for anonymous data in its final form. the revised and greatly expanded hmda rule is slated to become effective january 1 of next year and includes many highly sensitive data points, including the borrowers' credit score. the bureau has stated in its final rule that it would propose a balancing test to determine which of many data points would be redisclosed to the public. what's your time line -- i realize another timeline question -- for that process? and what does the cfpb plan to protect highly sensitive consumer data like the borrower's salary or credit score from being publicly disclosed? mr. cordray: i'm very well aware of that issue.

it's something we're wrestling with. we do not want to be increasing possibility for consumers. and it's something we're working on and we're mindful of the fact that although people would be reporting starting in january, that was a mandatory rule that congress required, we need to give guidance about the privacy aspects of this. we're very sensitive to it. i don't have a time frame for you, but we're well aware how these things fit together. mr. sherman: let me quickly urge you to use your authority to have a simpler version of many of your rules applying to smaller financial institutions. otherwise they are driven out of the market and everybody has to go wells fargo, then you end up with 20 accounts. mr. cordray: we're trying to do that where we can. i believe that's a sentiment shared on both sides of the aisle. it's something we hear quite a lot. mr. hensarling: the gentleman's

time has expired. pursuant to clause d-4, the gentlelady from missoi, mrs. wagner, chairman of the oversight and subcommittee will be recognized for an additional five minutes upon the conclusion of the time allocated to her under the five-minute rule. gentlelady is recognized. mrs. wagner: thank you, mr. chairman. director cordray thank you for appearing here today. i want to ask you today about the widespread failure in consumer protection that occurred at wells fargo over a number of years regarding fraudulent sales practices in which wells fargo fired 5,300 employees for opening up to 1.5 million deposit and credit card accounts without customer's knowledge or consent. sir, despite receiving more than 140,000 pages of responsive records from wells fargo, the o.c.c., and cfpb, this committee, to date, has seen no evidence that the cfpb had an

ongoing, independent investigation relating to wells fargo sales practices prior to may 8, 2015. this is four days after wells fargo informed the cfpb that the l.a. city attorney filed a civil complaint against the bank that same day and over 500 days, sir, after the original article by the "l.a. times" first broke the story about fraudulent accounts at wells. director cordray, there is a binder just to your right, sir, it's got a congressional seal on it. would you grab it, please. a binder to youright, sir. you don't care to take the binder? all right. it's in front of you. there are documents, sir. i'm going to be referencing, perhaps you'd like to reference them also. and aid like the record to reflect the gentleman has ignored the binder that congress has put in front of him. i'll be referencing and i had aappreciate it if you keep your

answers very, very short, sir. simply yes or no. mr. cordray: i'm quite familiar with the background -- mrs. wagner: do you recall when you first read the december 2013 "l.a. times" article? mr. cordray: have i read it? mrs. wagner: when did you first read? mr. cordray: i do not know. mrs. wagner: in september of 2016 on wells fargo -- did you read it mr. cordray: i have read that article. i don't recall when first read it. mrs. wagner: l.a. city attorney noted in his testimony that upon reading the "l.a. times" article he quote, immediately instructed his staff to investigate the allegations. do you believe that was an appropriate response? yes or no. mr. cordray: i believe that mike and his team conducted -- mrs. wagner: is that an appropriate response? did you also instruct your staff, your staff, to immediately investigate the allegations made in the "l.a. times" article after you read it, yes or no? mr. cordray: actually, whee had previous indication that there might be problems atells fargo -- mrs. wagner: yes or no.

mr. cordray: two whistleblower tips. mrs. wagner: i'm asking you a yes or no question. mr. cordray: it wasn't the "l.a. times" article that tipped us off. mrs. wagner: reclaiming my time. id the cfpb initiate a supervisory review on may 8, 2015? mr. cordray: no. that's not correct. mrs. wagner: exhibit one in the binder you prefer to look at in front of you is a letter dated march 3, 2016. from edwin, and employee of yours, cf 3. b director, where he indicated that the cfpb, this is a quote, initiated a supervise rereview of wells fargo branch sales practice on may 8, 2015. mr. chairman, i'd like to enter this letter in the hearing. mr. hensarling: without objection. mrs. wagner: are you denying it initiated its supervisory review of the sales practices on may 8. mr. cordray: we engaged in

supervisor active prior to that. mrs. wagner: did the cfpb notify on march 3 referred to matter to enforcement, sir? mr. cordray: that's the key point i want to make sure you're clear on. we were engaged in -- >> point of clarmentecomplarmente inquiry. mr. hensarling: for what purpose does the gentleman from massachusetts seek recognition? >> according to the rules, am i entitled to any of the documents that we're asking the witness on? i would like to get copies of the documents if i could. mr. hensarling: they will be provided to all members. >> we're does the investigation now. i'm wondering if i could get -- if copies of the documents have been provided to all the members under the rules. are require required. mr. hensarling: members may request copies of the documents and they will be provided to members after the request. mr. lynch: may i make a formal request to get the documents,

please. mr. hensarling: would the gentleman repeat the question? mr. lynch: may i get the documents? i have to ask -- mr. hensarling: apparently they are being provided to you as we speak. start the clock again. the gentlelady is once again recognized. mrs. wagner: are you denying cf 3. -- cfpb initiated supervisory review -- mr. cordray: introductory -- >> mr. chairman. mr. hensarling: the gentlelady will suspend. for what purpose does the gentleman from missouri seek recognition? >> i would will have to see these documents, too. the gentlewoman has raised some interesting points and i think that the documents should be hared with us. ms. waters: why don't by give the documents to all the members over here? mr. hensarling: they will be provided in a timely fashion.

they are not violating any committee rules. think so far what the gentlelady has alluded to is also put on to the committee screens. the gentlelady from missouri is recognized. mrs. wagner: could i have my time restored, mr. chairman, please. mr. hensarling: the time was stopped. mrs. wagner: did the cfpb notify wells fargo that it had decided to refer this matter to enforcement? yes or no. mr. cordray: yes. when that happened it had been -- mrs. wagner: are you denying they represented in writing it referred this matter to enforcement on march 3, 2016, is that correct? mr. cordray: let me clarify this for you. mrs. wagner: my time is limited and i have a lot of questions. mr. cordray: the letter dated march 3 is a point at which we have decided that the matter has risen to a level where it's no longer supervisory matter -- mrs. wagner: did the cfpb refer

this matter to endorsement around the same time that the l.a. city attorney began settlement negotiation was wells fargo. mr. cordray: that's not what we initiated work. mrs. wagner: what an amazing coincidence. you referred this to enforcement on march 3, 2016. the l.a. city attorney referred it on march 2, 2016. what an amazing coincidence. mr. cordray: these aren't coincidences. we're in contact with local officials -- mrs. wagner: reclaiming my time. the first request, first request -- director cordray, did the cfpb first request wells fargo delay destruction of its records on may 8, 2015? mr. cordray: say that again. mrs. wagner: did the cfpb first request that wells fargo delay the destruction of records related to its branch sales practice on may 8, 2015? con-- mr. cordray: consistent with the fact it had graduated into an enforcement action.

mrs. wagner: the letter from the cfpb, i would like to enter as exhibit 3. you do not deny that the cfpb's first requested on may 8, 2015, that wells fargo's delay the destruction of records epertaining to its branch sails practices? yes or no. mr. cordray: that's just a reminder of obligation that is exist under the law. mrs. wagner: yes or no? mr. cordray: that's a reminder of the obligations that already exist -- mrs. wagner: was it the first time the cfpb made this request to wells fargo, why didn't the cfpb produce those records to this committee given the fact such records would be responsive to the committee's record request of september 15, 201 which is exhibit 5, mr. chairman, i would like to have this in your binder -- mr. hensarling: without objection. mr. cordray: i'm sorry. we have given you documents and if there are more documents you want, we're happy -- mrs. wagner: we have been asking for documents as everyone on this side of the aisle have referenced for hundreds ever days, sir. and you are in woeful

compliance. mr. cordray: if there are documents you don't have, happy to try to provide them. mrs. wagner: did the cfpb first request on may 8, 2015, that wells fargo produce items such as sales practice policies and actions taken by the bank regarding fraudulent sales practices at the bank, yes or no? mr. cordray: those are the compelled production of documents. mrs. wagner: yes or no, sir. mr. cordray: yes. mrs. wagner: you do not denied the cfpb's first, first requested that wells fargo produce this information on may 8, 2015. mr. cordray: that's not correct. and you're conflating things. mrs. wagner: let me move on. if you're saying the first time -- you're saying this isn't the first time the cfpb requested this information, why didn't the cfpb produce those records to this committee? seeing that such records would be responsive to the committee's request of september 6, 2016, which is exhibit 5 that's been

put in. did the cfpb ever contact wells fargo about its fraudulent branch sales practices before wells fargo informed the cfpb on may 4, 2015? yes or no. mr. cordray: we had had supervisory activity prior to that time and subsequent to that time -- mrs. wagner: i take that as a yes. are you aware the earliest correspondentence you have produced is the edwin letter of may 8, 2015? mr. cordray: there was supervisory activity prior to that time. mrs. wagner: is this the earliest correspondent between the cfpb and wells fargo pertaining to the practices? mr. cordray: i don't know exactly. mrs. wagner: did the cfpb depose or interview only three wells fargo employees in connection with the fraud lent accounts? mr. cordray: they took the only depositions that occurred in the case. mrs. wagner: were they three? were they three, sir is that correct? that is correct, then.

yes. wow. you tell cfpb's investigation both independent and comprehensive. director cordray, only interviewing three employees for such widespread cases of fraudulent practices where 5,300 employees were fired does not seem very comprehensive to me, sir. in your letter to this committee on september 23, 2016, you indicate that bureau staff first became aware of some related issues around wells fargo. this was well over a year before either initiating a supervisory review or containing the bank about a fraudulent practice, sir. it's most concerning. i don't have much time left. i'm going to close here, sir. mr. cordray: you don't want to give me a chance to respond, that's ok. mrs. wagner: from the minimal, minimal records you have given to this committee thus far and based on your testimony, the only conclusion there is to draw regarding the wells fargo scandal is that the cfpb was asleep at the wheel, asleep at the wheel, director cordray,

under your leadershi and that your investigation in this matter was far from independent and comprehensive, sir. you have claimed the cfpb was created to root out this kind of widespread consumer arm, but the "l.a. times," o.c.c., l.a. city attorney all got there before you did, sir. i encourage you -- mr. hensarling: the time of the gentlelady has expired. the chair now recognizes the gentleman from massachusetts, mr. capuano. mr. capuano: thank you, mr. chair. mr. cordray, boy, they really hate you, don't they? mr. cordray: don't give credit for anything good we do. i understand that. part of the game. mr. capuano: i think i'm into the bizarreo world. called the agency and rotting agentcy. first they complained you enforced too much. now we just heard a 10-minute rant you didn't enforce enough. and bizarreo of aulby czaros, the people -- of all bizarreos

the people on the other side of the aisle have become the sole and perfect defenders of workers rights, women's rights, and minority rights. unbelieve afpblet we have -- unbelievable. we'll stay here longer because eventually they'll be in favor of the health care law and all the other good things of america. mr. cordray, we have had many interactions sometimes i disagree with you, sometimes the agency. and i would love to sit here and talk about those things, let's be honest. you and your agency are here 62 times not to have the typical oversight that's our responsibility but to beat the hell out of you and make sure we get rid of this agency. that's why we're here. that being the case, a thoughtful presentation here is really not called for. with that, since nobody on that side of the aisle seems to want to give you the opportunity to actually address a misleading question based on wrong facts, i

will let you 3 1/2 minutes to address. which one of the most ridiculous assertions that were just made would you like to address? mr. cordray: i'm sorry that the previous questioner has left the room. mr. capuano: they weren't going to kwlins to you anyway. mr. cordray: let me rep cap the events. we had the first whistleblower tips in the middle of 2013 before the "l.a. times" story. although i will say that was a splendid piece of investigative reporting. and investigative reporting often aids government law enforcement investigations and did so here. as well as follow-up stories by the "l.a. times." at the time there were issues around whether employees were being abused by the employer, whether they were being held to unrealistic sales goals and the like. over time, this problem migrated into something bigger. and our look at it migrated into

something bigger as the problem itself evolved. we were engaged in supervisory activity through 2014. and in 2015, and at that point as the congress wovepl noted, the matter had become serious enough and clear enough that it migrated and was graduated into an enforcement action. that's a very serious matter. and it involved taking depositions. we didn't need to take hundreds of depositions here. we took three key depositions that had not been able to be taken in the case because of restrictions, evidentiary restrictions on what the l.a. city attorney's office could do. they shared with us information from other interviews they had. we didn't need to duplicate that work. we also compelled the production of documents from wells fargo that were very significant to detailing and documenting and nobody denies this. we established it through this joint investigation. and it is clear no one denies that millions of accounts were opened illegally, improperly, in the name of consumers who didn't

know a thing about it, and were often hurt by it in terms of costing them fees or affected their credit reports or the like. we worked with the l.a. city attorneys office and brought the o.c.c. into a joint work with the l.a. city attorneys office. and we resolved the matter. not just on the basis of the boundaries of california, which is what the l.a. city attorney could have done, but nationwide. and with broad injunctive relief that this will not happen again at wells fargo. and because it's a public enforcement action and all the facts are detailed, when the congresswoman talks about 5,300 employees fired and millions of accounts opened, we know that because of the public enforcement action. that's what broke this matter opened. nobody was talking about it before then. that is leading to the entire industry taking a look and being more careful about whether they are engaging in any of the same kind of fraudulent practices toward their own customers. so this will have cleaned this

up throughout the entire industry and put everyone on notice that this is a very serious matter. it's not to be taken lightly. you can't just put out these sales goals and say you should meet them and we'll turn a blind eye to how you meet them, even if it violates the law f we establish that principle there will be a lot of problems avoided in the future and less work for the consumer bureau and i'll be glad of it. mr. capuano: with that i yield the committee back eight seconds. mr. helling sarling: the gentleman yields back. the chair now recognizes the gentleman from kentucky, mr. barks chairman of our monetary policy and trade subcommittee. mr. barr: director cordray, in response to your to my friend mr. capuano from massachusetts i think you said this is just, quote, part of the game. let me tell you what's not a game. what's not a game is your agency denying vital financial services to service members serving abroad from my commonwealth in

communicating with their families back home. as you may know -- let me ask you the question. as you may know, the bureau has issued regulations on international remittances, and in kentucky we have a number of military bases, fort knox, fort campbell, the national guard headquarters is located in my district. credit unions are no longer offer their members this product. here's why. give awe real life story from a constituent. fort knox federal creffedit union has members across the world and they have discontinued offering this much needed service due to fear of not being client after 100 remittances a year. can you imagine for this credit union it doesn't take long to reach 100 when you have over 85,000 members. many of whom are deployed overseas. mr. cordray: i see that. mr. barr: when the kentucky credit union contacted you about the rule and unintended consequences it is reported to

me your comment was, no, this is the intended consequence. and that you were not concerned about these -- mr. cordray: i don't know about that. mr. barr: now having to pay much higher fees to remitt funds to their families because their credit union can't comply with this onerous regulation. why won't you provide relief to service members and their families? mr. cordray: so we're doing a lot of great work for service members and their families. i would be happy to detail it if given a chance. in terms of remittances in particular, are you aware of who required there to be that rule? mr. barr: i'm telling you -- mr. cordray: congress required that rule. we're merely following the law. mr. barr: i reclaim my time. the bureau has the correction to provide the relief to these credit unions who are no longer able to deal with a workable rule that would alou these remittances and have priced these members out of their credit union as a result these credit unions will no longer

able to provide. i want you to revisit that. that's a request of you to revisit that rule to provide relief to these services. mr. cordray: we would have the discretion to do that if congress provided it in the law. it is not in the law. mr. barr: once again, i think the bureau is taking an overly restrictive view of your add -- certainly you exercise a whole lot of discretion to take away financial services and product from the american people. i think you could probably revisit this and i'd love to continue that conversation. let me move on to another problem. mr. cordray: we'll be glad to continue that -- mr. barr: in march of 2015 you testified before this committee and said you needed data showing the cfpb rules related to quote high cost loans were constraining the manufactured housing market. according to home mortgage disclosure act data, manufactured housing loans from 50,000 to 75,000 have decreased by about 14% as a result of your regulation. there is clear data --

mr. cordray: from whom? mr. barr: home mortgage disclosure act. the government's data is telling you that manufactured housing credit is down because of your regulations. why in the world when we have an affordable housing crisis, when many rural americans struggling in kentucky and elsewhere need access to affordable housing. why don't you provide relief to working americans to need access to manufactured housing credit when the government's own data is telling you that your regulations are hurting low-income americans? mr. cordray: i don't think the government data says that. the government data doesn't ascribe causation. so there are a lot of reasons why this could be. but i would be happy to follow up. i know this is a point of particular importance to you and to other members of the committee and we have talked about it before. and be glad to talk about it further. mr. barr: i think we should. you have the discretion to stop these rules that are

contributing to the affordable housing crisis and making it harder for americans, particularly in rural areas, to afford manufactured homes. finally on october 7, 2016, the office of advocacy of u.s. small business administration, another government agency, submit add comment letter to the bureau related to your proposed rule regarding consumer loans. the comments pointed out that the economic impact of the proposed rule on small entities and consumers would be greater than indicated in the bureau's analysis pursuant to the regulatory flexibility act. this is corroborated by my own nstituents small businesses who say this process was a joke. they went and told you they were going to go out of business and ignored them. so you have our constituents saying they are going out of business because of your rule. and another government agency saying that that's truly. and you are ignore it -- ignoring it. mr. cordray: not at all. we were not ignoring that. the reason we have that process and hear from everyone is to hear what they say and process and digest it and analyze it. just don't we don't agree with every single thing people say to

us, often they are saying conflicting things. mr. hensarling: the time of the gentleman has expired. mr. cordray: be glad to follow up with your office on these points. mr. hensarling: the time of the gentleman has expired. the chair now recognizes the gentleman from missouri, mr. clay, ranking member of our financial institution subcommittee. mr. clay: thank you, mr. chairman. thank you, director, for being here. i really don't know where to start today. my neighbor from missouri, mrs. wagner, sounded as though she was sounding the alarm that you had done something wrong and that she was in defense of wells fargo. me and my friend from wisconsin, mr. duffy, brings up the issue of race. let's focus on race first. i note the in -- noted in your semiannual report that mortgage companies and auto loan

companies continue to charge higher interest rates to african-americans and hispanic borrowers than to non-hispanic white borrowers. in the case of p.n.c., $35 million has already been recovered to the injured. given back to the injured. withll as ally, auto loans about $80 million in damages already recovered. i would hope my friends on the other side of the aisle would understand that this has severe financial impact to african-american, hispanic family that prevents them from building wealth for their family. it keeps them in a hole. and so i want to commend cfpb for finding these atrocities and

making these companies pay. and that's part of why you were created. i appreciate the job you do. can you speak to that and what you're finding in these industries? mr. cordray: sure. let me start this by correcting the record on one point on p.n.c. the discrimination there was by national citibank. p.n.c. took them over but they weren't responsible for that. they helped us clean it up. the point you are making is we think really important a lot of people would like to think discrimination is a think of the past. it's a viss tinge of the past. we have found ongoing instances of discrimination, some significant, some of them involving redlining, which a lot of people want to think it was a practice went out of fashion decades ago, but we found it hasn't. and we have taken action where that was appropriate. and where the evidence demonstrates that action is needed. and what is this about? it's about making sure that

people are treated fairly and equally in the financial marketplace where they live so much of their lives. that they are seeking a mortgage that they are going to be able to get credit and be charged the same interest rate they would if they had a different ethnic ckground or racial or skin color. that's an american principle. but it requires enforcing the law to make it happen and stick. it makes people uncomfortable. some of the law in this area is complicated. will i grant that. we try to work through it as best we can. the u.s. supreme court reinforced the validity of that law two years ago in the inclusive communities decision. we do our best to faithfully follow all of those decisions. but it's important work. our office of fair lending and equal opportunity does that work on a daily basis. they have encountered obstacles at times in doing that work, but they have been splendid in persevering and getting justice for americans in so many circumstances. i'm very proud of their work.

mr. clay: i'm proud of the work you do also. notice of curiousity i that you describe some your public meetings and community round tables with stakeholders like community banks and credit unions, do you get many complaints from the public about the creation and existence of the cfpb? have you gotten many of those? mr. cordray: no, don't think so. we do hear -- everybody comes before us in a variety of forms and we encourage that. and they all have different things to say. some of them are complimentary and some are critical. we try to listen to them all. frankly it's the critical things they say that are often the most helpful because they tell us where we should think about doing something differently. the complimentary things we love to hear them when people are willing to say them, but that just means keep doing what you're doing, which is a good

message. we don't learn quite as much from that. so we do try to be very accessible. and i think nobody can complain about the fact that they can't get their voice heard at the consumer financial protection bureau. that's the way it should be. mr. clay: it seems to be pretty effective looking at the chart on the screen, it looks like people from all around the country participate in bringing their complaints to you. my time is up. thank you. mr. hensarli clo time of the gentleman has expired. the chair recognizes the gentleman from california, mr. royce. chairman of the house foreign affairs committee. mr. royce: thank you. director cordray, mr. luetkemeyer raised concerns onth le atav he onofhes tila auts e laelncerth pb i c

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igio tht y y meheec t rees an adversarial o posture at the outset or pre sumes wrongdoing? mr. cordray: we changededha wepase we don't want to prejudge. let me also say it's important to know, we have opened a number of investigations that we later closed because we did not find enough basis to proceed. we do that. we're willing to do that. i tell our lawyers don't be disappointed. you looked at it and there wasn't anything and that's the right outcome. don't feel like you wasted your time. you did the right thing there. there has to be a reasonable basis for thinking that something is amiss before we would open an investigation at all. and a court -- courts can and have checked us on that if they think we didn't get that right. mr. royce: right.

in your opinion. but that is, again, with zero complaints. some of these cases. now let me go to a company that visited my office recently. which explained that as part of the initial inquiry in the c.i.d. process, the second question they were asked was about their annual revenue. why is such a question relevant to the initial inquiry? mr. cordray: it could go to scope, trying to figure out how big the problem is. if it's a small problem, small institution, it's probably not the right expenditure of resources by the bureau. if it's a smaller part of a larger institution t. could look like a larger problem. these are things you try to make your best judgment. mr. royce: i want to explain how it seems to smaller institutions. mr. cordray: it's not how it was intended. mr. royce: let me explain how it seems. it seems to them like a car

mechanic in national lampoon's vacation. give you this example. mr. cordray: i have listed examples my sefment mr. royce: when clark griswold asks how much is the bill for repair, he responds how much you got in that for many of these smaller companies is the way they view it. and we need to restore, i think, some balance or sanity in the process, right. let me close with this. an investigation or examination is not supposed to be a gotcha moment or a hold up. i'm just explaining in terms of many companies in cases where there was zero complaints their feeling about the attitude when somebody comes in and says you're a target. mr. cordray: sew seconds? zero complaints is one bit of evidence. there may be other bits of evidence that point in another direction. the other thing is sometimes when we're asking about resources it's because we would limit any kind of penalty based on their ability to repay because we don't want to send

that company out of business. mr. hensarling: the time of the gentleman has expired. pursuant to clause d-4 of committee rule three, the gentleman from massachusetts, mr. lynch, will be recognized for additional five minutes upon the conclusion of the time allotted to him under the five-minute rule. the gentleman is now recognized. mr. lynch: thank you, mr. chairman. mr. cordray, thank you very much for your hard work and attention. i'm up here, sir. changed my seat. trying to confuse you. do you need a couple more seconds to finish your thought on that? i know you were speaking -- mr. cordray: i don't think so. i think congressman royce and i -- mr. lynch: i do want to revisit the old wells fargo scenario for a second. according to my records you testified before the senate banking committee and your testimony was that you had received whistleblower complaints regarding fraudulent accounts being opened up. and that was in, i believe, july

of 2013. mr. cordray: correct. r. lynch: the expose written the "l.a. times" wasn't until december, six months later. mr. cordray: it detailed certain aspects of the situation, but again important to understand the situation itself unfolded over time. there weren't millions of accounts opened in a single day. this was a practice that started in a very limited way and then maybe spread to other employees and then spread through the grapevine that this is the way you can make your bonuses. it expounded -- became exponential over time. so as the problem evolved, and i look at it evolved, that's why anybody can look back and say you should have known everything on day one. everything wasn't even happening on day one. so that's kind of a misplaced criticism, i think. mr. lynch: there was an active effort by wells fargo to conceal this. they had originally, if i'm

correct, back in 2011, fired hundreds of employees allegedly for opening fraudulent accounts back in 2011. mr. cordray: the timing on the firings is not entirely clear. there was a suggestion there was a same pace of firings all along. i think the firings accelerated later in the process because the problem became greater and the awareness of the problem became higher. but we do not think that the company came forward in a responsible way to let the regulators know about anything that they were seeing. and as i said, some of it occurred and magnified later on. mr. lynch: i do agreeshate it was the cfpb that made that a global settlement. mr. cordray: i would say working together with our partners. the l.a. city attorney's office brought things to the table that were critical. the o.c.c. brought things to the table that were helpful. and i think the cfpb brought things to the table that were essential in making this a

national resolution with injunctive relief to make sure they stopped it going forward and didn't just throw some money at it and go on about their business. mr. lynch: i want to shift attention now to our veterans and service members. ironically this president, prum, when he came into office -- prum -- president trump, when he came into office put a hiring freeze on in the federal government. a lot of people don't realize that the federal government is the largest single employerf veterans in this country. we have 632,000 veterans that work for the federal government, and of that 632,000 veterans who work for the federal government, 143,000 of those veterans have a disability rating of 30% or greater. so i'm very proud of the federal government's willingness, eagerness to hire our veterans. the problem is that with the

president's hiring freeze, we block, we block these kids coming back from iraq and afghanistan from going to work at the v.a., at d.o.d., d.o.d. is the single largest department in terms of hiring our veterans. so with the situation we got right now, with these young veterans coming home after multiple tours of duty, i was in camp leather neck in afghanistan a while back, and i had a chance to chat with a rifle company there and one of the young fellows told me that this was his seventh tour of duty. we got these veterans coming home after multiple tours of duty, we have an elevated suicide rate among our returning veterans. very tough situation. substance abuse. another -- what do we do? what do we do to welcome our

veterans home? we put a hiring freeze at the largest employer of returning veterans so they can't come back and go to work. coming back and transitioning to civilian life, that job is critical. that's the difference maker. so when i hear members here talk about you're not doing enough as a federal agency to take care of our service members, and i know that i had a young veteran in my office last week trying to go to work at the federal government and he can't get a job because --the hiring freeze, it just not only is it unfair, but it is hypocritical of what we're doing today. i have a bill,-h 1001, that would wave the ban on hiring for the federal government as respect returning veterans. basically what the bill would do was as the largest employer of

veterans, it would exempt any qualified veteran, any qualified veteran -- one of the veterans i had a couple weeks ago was a radiologist, so they have been trained well within the military, it would allow any qualified veteran to go to work in spite of the fact of having the president's freeze on hiring within the federal government. i think it's the right thing to do. but i am still waiting for republican co-sponsors. i'm still waiting for some republican co-sponsors. got a mess of democrats on the bill with me, but i would love to get some republican support because i know, i know my brothers and sisters across the aisle agree with me on this issue. i now they do. i know they do. i'm certain of it. what i wanted you to do -- >> can you continue to watch this hearing online at c-span.org. and later find it by typing richard cordray in the search box at c-span.org. we'll leave here. the u.s. house is gaveling in