And here on cspan we take you live to the House Financial Services committee. Theyre 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 renouheslledag t b t cdr wn cpl kreh. T w ty e u zea ouonie tt ul aesntece eeinmitihe trafo htel cy llr e athnt mrayth eerntdeen dusth tts nothfas. Eyonavg snd on weogdeilo erhaison e mpy ysheon do abo dy atel rg pblt miteyoaranttneanyoitoea mror u othcoui floon lsus ttnety b r e cpa c dpu ofts no ty ea. A t fts e bl. Uing mbee itn tms vel fedlas a s esi. Ha s o cas,it beulth. Chthtote oe io mrou. Rdy mrhuen uti, est tt mrdaout respsir ecwh wgecolatsndok pce a y aa. Uing y gu jt th pplwhd toemt guty yochgehe mrnt or oered he. Uiemiaon mrs st frtlen. Fa, at g g isooan ntmaha sndd atr. Li ek00learonan irod u,ir tnk ones ou rpoives a y a sp t crs a autouabit yr ari . Mrcora i puic evy mbpuics a coum. 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We have up behind you on the board the trade deficit statistics. I know that we didnt 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 its 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. Im not sure what to tell you there. Mr. Sherman you understand the socioutility of being done as expeditiously as you can be . Mr. Cordray i always do and im sometimes disappointed at how slowly the federal Government Works even though im 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 cant expert jurisdiction in thisaire . Mr. Cordray its 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 thats a very significant complicating factor for us. Its something that we have a team of people looking at and trying to work through were 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 were 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 its 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. Whats 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 borrowers salary or credit score from being publicly disclosed . Mr. Cordray im very well aware of that issue. Its something were wrestling with. We do not want to be increasing possibility for consumers. And its something were working on and were 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. Were very sensitive to it. I dont have a time frame for you, but were 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 were trying to do that where we can. I believe thats a sentiment shared on both sides of the aisle. Its something we hear quite a lot. Mr. Hensarling the gentlemans time has expired. Pursuant to clause d4, 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 fiveminute 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 customers 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, its got a congressional seal on it. Would you grab it, please. A binder to youright, sir. You dont care to take the binder . All right. Its in front of you. There are documents, sir. Im going to be referencing, perhaps youd 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. Ill be referencing and i had aappreciate it if you keep your answers very, very short, sir. Simply yes or no. Mr. Cordray im 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 dont 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 im asking you a yes or no question. Mr. Cordray it wasnt 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. Thats 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, id 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 thats the key point i want to make sure youre 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 were 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. Were does the investigation now. Im 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 dont 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 its 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 thats 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 arent coincidences. Were 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 cfpbs first requested on may 8, 2015, that wells fargos delay the destruction of records epertaining to its branch sails practices . Yes or no. Mr. Cordray thats just a reminder of obligation that is exist under the law. Mrs. Wagner yes or no . Mr. Cordray thats a reminder of the obligations that already exist mrs. Wagner was it the first time the cfpb made this request to wells fargo, why didnt the cfpb produce those records to this Committee Given the fact such records would be responsive to the committees 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 im sorry. We have given you documents and if there are more documents you want, were 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 dont 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 cfpbs first, first requested that wells fargo produce this information on may 8, 2015. Mr. Cordray thats not correct. And youre conflating things. Mrs. Wagner let me move on. If youre saying the first time youre saying this isnt the first time the cfpb requested this information, why didnt the cfpb produce those records to this committee . Seeing that such records would be responsive to the committees request of september 6, 2016, which is exhibit 5 thats 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 dont 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 cfpbs 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. Its most concerning. I dont have much time left. Im going to close here, sir. Mr. Cordray you dont want to give me a chance to respond, thats 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, dont they . Mr. Cordray dont give credit for anything good we do. I understand that. Part of the game. Mr. Capuano i think im into the bizarreo world. Called the agency and rotting agentcy. First they complained you enforced too much. Now we just heard a 10minute rant you didnt 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, womens rights, and minority rights. Unbelieve afpblet we have unbelievable. Well stay here longer because eventually theyll 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, lets be honest. You and your agency are here 62 ti