Transcripts For CSPAN2 Richard Cordray Watchdog 20240713 : v

Particularly the due homage, we think of for our continuing use of the Natural Resources of the ancestral homeland. And we thank you all for tuning and whether on crowd cast or Youtube Channel or a facebook page. In these awfully strange times were thrilled to present and Live Streaming of a digital stage for town hall communities societal light. Folks well beyond seattle were finding, everyone is willing to stare or talking to the computers, some for the first time, i want to thank rich for helping us keep the conversation here at town hall. To view the closed caption version please watch from a youtube page. Ritual speaker to enter 20 minutes and after that ill come back to pose your questions to ask a question field at the Bottom Center of your screen and crowd cast. You can also go to which questions are speakers entered first by clicking the arrow next to the question to upload. 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If youre interested in supporting local independent bookstores in deepening your understanding of tonights topic, we will help you consider purchasing a book using the link on the lifestream page to progesterone friends at third place books. Okay, as i look at tonights bio realized its worked backwards in time and i didnt take the time to change that. So working backwards, richard is a lawyer and a politician and previously the democratic nominee for the governor of ohio in 2018, before that he served as the first director of the Consumer Financial bureau from 2012 2017. Before that he served variously at ohios attorney general, solicitor general and treasurer. In 2008 he received a Financial Services champion award from the u. S. Small Business Administration and the Government Service award for neighbor works in america. Earlier in his career he was an adjunct professor at ohio state professor of law and served as a state representative for the 33rd ohio House District and was also the first solicitor general and the history. Earlier still he was editorinchief of the new york chicago law review before the u. S. Supreme Court Justices byron white and anthony kennedy. His book watchdog help protecting consumers to save our families, our economy and our democracy is the subject of tonights timely talk, please join me in welcoming richard cordray. Thinking and thinking to everyone at this townhall for making this format available during these challenging times, im glad to have the chance to be with you virtually into talk about my new book watchdog. Watchdog is a story that is very timely to our Society Today into our Economy Today and as we move into another financial crisis we need to brace ourselves for the same types of problems that we have seen before. The book is about consumers and who are consumers, consumers are all of us, every one of us is somebody who goes to the financial marketplace and makes decisions and choices and its out of those billions of decisions that we make every day that the economy of the United States of america is the most powerful, the most affluent economy the world has ever seen as its activity generated. When i started in the book i wanted to start with some stories about average consumers, that is you and me and the people that we know, our brothers and sisters, mothers and fathers, sons and daughters. What i want people to understand, consumers often face challenging situations and they sometimes get into problems that are not of their own making, some of those problems are of their own making but theres many situations where people are misled or cheated or mistreated in the financial marketplace. I start with a variety of those, im talking about people who are using products that we all use like credit cards, like auto lawn like youre buying a car or truck, like mortgages to buy a house, very few people buy a house with cash, some do most dont. Student loans increasingly prevalent fact for life for 70 families across the country with the entire education for their children or their grandchildren. And people run into problems and are often stuck, they dont know where to go or where to turn. They often find when theyre dealing with large Financial Companies, they get no response where they get the runaround and they often cant get satisfaction and that is alienating and creates a sense of disrespect, md although those feelings of being on hold for a long period of time and nothing can be done about that and its often in the fine point. Thats the nature of consumers, its important to realize we are not alone in facing the challenges. Sometimes you may feel youre the only one who did not understand that for you the only one whom this happened. Im going to resume at this point, we had technical difficulties for a moment and i may repeat myself slightly, one of the important things for people to realize, Consumer Finance has dramatically changed in the last generations, really since world war ii, there is very little credit available to her grandparents, it was not a big part of their lives, they did not face a lot of risk, they cannot get into huge financial trouble but in todays society, fastforward two generations, credit card spending is pretty indicative around americans, auto loans is a big part of peoples lives in any part of the country where people drive to work. Mortgages are the way in the way we buy houses and their significant obligations and Student Loans are now very prevalent part of life for many families and people can carry those loans even for decades. People have a lot more opportunity that credit provides in the face a lot more risk and they can get into more trouble, this is a bigger piece of our lives. This brings us to the financial crisis of 2008 which was caused by widespread irresponsible and predatory mortgage lending, it caused many families to lose their homes during that crisis and really offended the entire economy. That led to a rational reform to try to prevent a crisis like that from happening again and it created as part of the reform an idea that had been put forward by then professor, now senator Elizabeth Warren for a Consumer Agency for protecting certai cos and the financial marketplace. A straightforward analogy that was a winning argument for many that we had gotten to the point in america where its basically impossible to sell someone a toaster with a 20 chance of bursting the flame and burning down the house. But its entirely legal to sell them a mortgage that had a 20 chance of putting them into foreclosure and putting them out on the street with their families. That we werent providing protection for Financial Products was a huge oversight. In the financial leg or tory system in washington was really focused on the big banks and the Financial Companies themselves, it was about keeping them safe and sound in making sure that they prospered over time. That is important, that is important to remember that the type of Consumer Protection if your bank goes belly up, not going to be good for any of the customers. At the same time it was important for everyone to turn around 180 degrees and look at the customers of these institutions and realize if they were mistreated in the marketplace something was wrong and we needed to redress the balance and rebalance the marketplace of the consumers had the protection and support that they need in order to flourish. If we have strong consumers in our society we will have a stronger economy and again, it was mortgage lending, a Consumer Finance market that broken upset the economy and hurt us so horribly in 2009 2010. So this book is about consumers and the problems that they face, its about Consumer Finance and how its changed and its about the new Consumer Financial Protection Bureau and the role and importance of the work that engages and to protect people across america. Now something that is important to realize, as Consumer Finance has expanded in our society, so has the position of the financial sector. Financial services are becoming much bigger part of our economy over this. They nearly doubled in size and we now carry a staggering figure, almost 40000 per person of Consumer Debt in america today, that means that the Financial Services industry has grown and in important especially in the corridors of power in washington, theres more money spent on lobbying and more money spent on Campaign Contributions by the financial industry than by any other part of our economy. So when you have a new agency, a Little Agency like the Consumer Financial Protection Bureau Whose Mission is to make sure that it oversees the Financial Company and holds them accountable, there is bound to be significant pushback and there was. I tell some of the political story in the book and first of all the fight that preceded over creating the agency in the first place in the secondary fight over blocking the first director of the bureau which turned out to be me as the first nominee, i was blocked by being confirmed by the senate for two full years while they battled over trying to weaken the agency. And they come back to that fight later in the book in part for where i talk about what it was like to serve for almost a full year under the Trump Administration where i was continuing to push forward the agency as holding Financial Companies accountable for their mixed feeds in the Trump Administration had deeply tory mindset and was at odds with me and i talk about the battle that we had back and forth over the course of a year in efforts that were made to have these fired or having intimated to me not doing my job in the way that i saw and understood that job to be which was the rebalancing of the marketplace and get consumers allowed her voice and a bigger role in the economy. Let me give you an indicative story in the book. Its a story about a Young Servicemember named ari and his father. Ari went into the service and he went to basic training and like many Young Service members, he was leaving home for the first time and he was going to be on his own for the first time having to manage his own finances. Those people are right targets and financial predators know it, they realize that these are often unsophisticated, naive, inexperienced consumers but they have a guaranteed paycheck from the u. S. Government and what youll find they congregate around military bases. This is been mapped around the country. And its been described as grizzly bears next to the stream when the salmon are coming upstream to spawn. They will try to sell Service Members, highcost loans, highcost products, especially cars and trucks, especially electronics. This is what happened with ari. He wanted like many young people who are on their own for the first time and now making money, he wanted to buy his first set of wheels so he went out and he found a lender, it looks like a very legitimate lender called the miles Lending Program which is military installment loans and educational services, sounds very legit doesnt it. When he walked out at the lenders place, he bought a used dodge ram truck, it was costing him 70 of his takehome income. Some of that was undisclosed fees which is against the law, some of it was misleading addon products that were basically worthless that he was charged for those and was folded in the price, he did not understand that, it was all in fine point. But that was what he was settled with him for years to come most of his takehome pay was going to pay for this truck. When he was deployed to go overseas he turned his finances over to his father and confessed and explain his situation, his father was outraged what had happened and try to undo it. But when he tried to work with the lender to have alone changed, he was asked, didnt ari sign the paperwork, yes he did, case closed, that was the end of the story or so they thought, for many people like ari, he was stuck. His father did not let it rest at that, he complain to everybody that he could find, eventually he found his way to an agency he never heard of called the Consumer Financial Protection Bureau and he filed a complaint with the bureau. Our folks investigated the complaint and they found the undisclosed fees in the misleading addon products where he was deceived in the marketing of the products and we brought an enforcement action and we found that the mild Lending Program with a nationwide spring of lenders in the same thing had happened to 50000 other Service Members not just ari, we brought in enforcement action and covered millions of dollars back for the consumers who were harmed by that and reform the terms of the contract. So we fix the problem for ari and 50000 other Service Members. That was good work that they admit holding these lenders to account. But it went one step further, this is something the only government can do to understand the pattern of the problem and figure out how to fix it. What we did was we found that ari had been told that he had to have the loan be repaid through the Allotment Program which meant that the lender got their money before it ever went to his account, he lost control of his own budget and he could not prioritize some other thing at that month that he preferred this had to be paid out first. The Allotment Program have been created years ago as a convenience for Service Members as they were deployed overseas, this was before the advent of Online Banking and is so easy and convenient at most institutions as a onesided collection tool to have up hundred have their loan signed up. We went to the pentagon they worked with us and ended up reforming the Allotment Program to make it illegal to use the Allotment Program for highcost electronics and auto purchases, that is a story that is indicative of what the bureau can do. About providing the muscle and being able to analyze markets, ari thought he was only one with the problem, he was not, there were tens of thousands of others who are infected and there was a broader systemic problem that can be fixed. My point in the book, the Consumer Bureau is diplomatic of what we can do with government, when government isnt focused only on those with those at the top of the pyramid. When its focused on middleclass workingclass americans and understating their problems and the problems of the other american household, we can put americans first, consumers first and see through it that they get a fair shake. That is something we need to do in Society Today and its how democracy works. And its an example protecting consumers not only our families but the consumers who are the backbone and also democracy by getting people and having them understand that government can actually do something for them, make them better for them and its a kind of structural change that we can use across the entire g