[Senate Hearing 112-342]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 112-342

 
NOMINATIONS OF: PATRICIA M. LOUI, LARRY W. WALTHER, AND RICHARD CORDRAY

=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
                   BANKING,HOUSING,AND URBAN AFFAIRS
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                                   ON

                            NOMINATIONS OF:

PATRICIA M. LOUI, OF HAWAII, TO BE A MEMBER OF THE BOARD OF DIRECTORS, 
                EXPORT-IMPORT BANK OF THE UNITED STATES

                               __________

     LARRY W. WALTHER, OF ARKANSAS, TO BE A MEMBER OF THE BOARD OF 
           DIRECTORS, EXPORT-IMPORT BANK OF THE UNITED STATES

                               __________

RICHARD CORDRAY, OF OHIO, TO BE DIRECTOR, CONSUMER FINANCIAL PROTECTION 
                                 BUREAU

                               __________

                           SEPTEMBER 6, 2011

                               __________

  Printed for the use of the Committee on Banking, Housing, and Urban 
                                Affairs


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            COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

                  TIM JOHNSON, South Dakota, Chairman

JACK REED, Rhode Island              RICHARD C. SHELBY, Alabama
CHARLES E. SCHUMER, New York         MIKE CRAPO, Idaho
ROBERT MENENDEZ, New Jersey          BOB CORKER, Tennessee
DANIEL K. AKAKA, Hawaii              JIM DeMINT, South Carolina
SHERROD BROWN, Ohio                  DAVID VITTER, Louisiana
JON TESTER, Montana                  MIKE JOHANNS, Nebraska
HERB KOHL, Wisconsin                 PATRICK J. TOOMEY, Pennsylvania
MARK R. WARNER, Virginia             MARK KIRK, Illinois
JEFF MERKLEY, Oregon                 JERRY MORAN, Kansas
MICHAEL F. BENNET, Colorado          ROGER F. WICKER, Mississippi
KAY HAGAN, North Carolina

                     Dwight Fettig, Staff Director

              William D. Duhnke, Republican Staff Director

                       Charles Yi, Chief Counsel

                     Laura Swanson, Policy Director

                           Pat Grant, Counsel

                       Catherine Galicia, Counsel

                 William Fields, Legislative Assistant

              Brian Filipowich, Professional Staff Member

                 Andrew Olmem, Republican Chief Counsel

                     Beth Zorc, Republican Counsel

                       Dawn Ratliff, Chief Clerk

                     Riker Vermilye, Hearing Clerk

                      Shelvin Simmons, IT Director

                          Jim Crowell, Editor

                                  (ii)
?

                            C O N T E N T S

                              ----------                              

                       TUESDAY, SEPTEMBER 6, 2011

                                                                   Page

Opening statement of Chairman Johnson............................     1
    Prepared statement...........................................    40

Opening statements, comments, or prepared statements of:
    Senator Shelby...............................................    15
        Prepared statement.......................................    41
    Senator Reed.................................................    17
    Senator Akaka................................................    18
        Introduction of Nominee..................................     3
        Prepared statement.......................................    42
    Senator Brown................................................    19
        Introduction of Nominee..................................    23
    Senator Hagan................................................    21
    Senator Menendez.............................................    22

                               WITNESSES

Senator Daniel K. Inouye of Hawaii
    Introduction of Nominee......................................     2
Senator Mark L. Pryor of Arkansas
    Introduction of Nominee......................................     4
Senator John Boozman of Arkansas
    Introduction of Nominee......................................     5

                                NOMINEES

Patricia M. Loui, of Hawaii, to be a Member, Board of Directors, 
  Export-Import Bank of the United States........................     6
    Prepared statement...........................................    42
Larry W. Walther, of Arkansas, to be a Member, Board of 
  Directors, Export-Import Bank of the United States.............     7
    Prepared statement...........................................    43
Richard Cordray, of Ohio, to be Director, Consumer Financial 
  Protection Bureau..............................................    25
    Prepared statement...........................................    44

              Additional Material Supplied for the Record

Letter of support for nominee Richard Cordray from John Glenn, 
  retired U.S. Senator from the State of Ohio....................    47
Letter of support for nominee Richard Cordray from the National 
  Fraternal Order of Police......................................    48
Letter of support for nominee Richard Cordray from Steve 
  Rasmussen, Chief Executive Officer, Nationwide Mutual Insurance 
  Company........................................................    49
Letter of support for nominee Richard Cordray from the Ohio 
  Bankers League.................................................    50
Letter of support for nominee Richard Cordray from various Ohio 
  CEOs...........................................................    52
Letter of support for nominee Richard Cordray from various Ohio 
  Sherriffs......................................................    54
Letter of support for nominee Richard Cordray from various civil 
  rights groups..................................................    56

                                 (iii)


                            NOMINATIONS OF:

                      PATRICIA M. LOUI, OF HAWAII,

  TO BE A MEMBER OF THE BOARD OF DIRECTORS, EXPORT-IMPORT BANK OF THE 
                             UNITED STATES;

                     LARRY W. WALTHER, OF ARKANSAS,

  TO BE A MEMBER OF THE BOARD OF DIRECTORS, EXPORT-IMPORT BANK OF THE 
                           UNITED STATES; AND

                       RICHARD CORDRAY, OF OHIO,

          TO BE DIRECTOR, CONSUMER FINANCIAL PROTECTION BUREAU

                              ----------                              


                       TUESDAY, SEPTEMBER 6, 2011

                                       U.S. Senate,
          Committee on Banking, Housing, and Urban Affairs,
                                                    Washington, DC.
    The Committee met at 2:36 p.m., in room SD-538, Dirksen 
Senate Office Building, Hon. Tim Johnson, Chairman of the 
Committee, presiding.

           OPENING STATEMENT OF CHAIRMAN TIM JOHNSON

    Chairman Johnson. Good morning. I call this hearing to 
order. Thanks to all of you for joining us here today and a 
special thanks to our witnesses and their family members who 
are with us.
    Today we consider three distinguished individuals nominated 
to serve in critical positions within the Obama administration. 
On the first panel we have two individuals nominated to serve 
as Members of the Board of Directors of the Export-Import Bank 
of the United States, the official export credit agency of the 
U.S. On the second panel we will hear testimony from the 
President's nominee to lead the Consumer Financial Protection 
Bureau.
    The first nominee is Ms. Patricia Loui. She is the founder 
and Chair of OmniTrak Group, a marketing and research company 
based in Hawaii. Ms. Loui has had extensive experience in 
working with U.S. companies as they seek to expand into Asia. 
In addition, earlier in her career she worked at the Bank of 
Hawaii and at UNESCO.
    Today's second nominee is the Honorable Larry Walther. Mr. 
Walther served as the Director of the U.S. Trade and 
Development Agency under President George W. Bush. He served 
for over 3 years as the Executive Director of the Arkansas 
Department of Economic Development and worked for SBC 
Communications, now AT&T, for 30 years.
    I look forward to hearing their testimony. After this panel 
we will turn to our second panel. I encourage Senators who wish 
to make an opening statement about the nominee for the CFPB to 
wait until the second panel begins.
    I would now turn to Senator Shelby for any opening remarks 
he may have for panel one. Senator Shelby.
    Senator Shelby. Mr. Chairman, thank you. I have a written 
statement that I would ask to be made part of the record. I 
would look to hear from the nominees and also from my 
colleagues here.
    Thank you.
    Chairman Johnson. Would any other Senators like to make an 
opening statement about panel one?
    [No response.]
    Chairman Johnson. We will now proceed to witness 
introductions. Senators Inouye and Akaka will introduce 
Patricia Loui. Senator Inouye.

INTRODUCTION OF NOMINEE PATRICIA M. LOUI BY DANIEL K. INOUYE, A 
             U.S. SENATOR FROM THE STATE OF HAWAII

    Senator Inouye. Mr. Chairman and Members of the Committee, 
it gives me great pleasure to present to you Ms. Patricia Loui, 
the nominee to serve as a Member of the Board of Directors of 
the Export-Import Bank of the United States.
    Before I proceed, Mr. Chairman, I would like to present to 
you her family. Her husband, Michael, is in the back of me, and 
her son, Christopher, and her brother, Steven, are sitting 
right behind me; and her sister, Kathleen, and her niece, 
Kristyn. They are here to give a Hawaiian aloha here.
    I strongly support the nomination of Ms. Loui as a Member 
of the Board. She is an outstanding professional. She is 
diligent and extremely bright. Ms. Loui is an accomplished 
international businesswoman who will bring extensive experience 
in banking and Government to her new role.
    Ms. Loui is the founder and Chair of the OmniTrak Group, as 
you noted, a woman-owned small business that provides marketing 
and research consulting to companies in the United States and 
Asia. She has led OmniTrak's expansion into the Pacific Rim 
where it is known for its multicountry studies on product and 
market development, brand equity marketing, and leisure 
entertainment and travel expertise. She cofounded the American-
Thai-Singaporean joint venture starting company in Thailand, 
which has become a leading research company in the Association 
of Southeast Asian Nations.
    Prior to becoming the chief executive officer of OmniTrak, 
she was a financial services industry vice president of 
marketing, planning, and development at the Bank of Hawaii. She 
served as an alternate on the founding board of the ATM system. 
She was the first woman member of the ATM Board and the 
youngest woman vice president of the Bank of Hawaii.
    Currently Ms. Loui serves as an appointed member of Asia 
Pacific Economic Cooperation (APEC) 2011 Hawaii Host Committee. 
President Barack Obama will host leaders of 21 APEC countries 
in our home State in November of this year. I hope the 
Committee can make it.
    She has several volunteer activities, including the 
Governor of Hawaii's Economic Revitalization Task Force, the 
Governor's International Congress Steering Committee, the 
University of Hawaii Foundation Board of Trustees, Palama 
Settlement Board to help disadvantaged youth, and the Honolulu 
Academy of Arts Christmas Auction Fundraiser.
    On a personal note, Mr. Chairman, I have known her family, 
beginning with her great-grandparents. We lived as neighbors a 
long, long time ago.
    Finally, I firmly believe that Ms. Loui's skill will be of 
great value to the Export-Import Bank of the United States, and 
I am confident that she will serve with great distinction. So, 
accordingly, I urge my colleagues to approve and confirm her 
nomination, and, Mr. Chairman and Members of the Committee, I 
thank you very much, sir.
    Chairman Johnson. Thank you, Senator Inouye.
    Senator Akaka.

INTRODUCTION OF NOMINEE PATRICIA M. LOUI BY DANIEL K. AKAKA, A 
             U.S. SENATOR FROM THE STATE OF HAWAII

    Senator Akaka. Thank you very much, Mr. Chairman and 
Members of the Senate Banking, Housing, and Urban Affairs 
Committee. I am very, very proud to join you in welcoming a 
distinguished constituent and a long-time friend of mine and 
her family. Ms. Patricia Loui has been nominated by President 
Obama to serve as a Member of the Board of Directors of the 
Export-Import Bank of the United States.
    As an accomplished international businesswoman who brings a 
wealth of experience in banking, business, and economic 
development, she is an excellent nominee for the Eximbank. I am 
pleased to join Senator Inouye in introducing her to the 
Committee.
    This is an exciting and challenging time for the Eximbank. 
It helps to create and maintain U.S. jobs by filling gaps in 
private export financing at no cost to American taxpayers. It 
just set a new all-time record for export finance 
authorizations. It had loans of over $24.5 billion at the 
beginning of August at a time when credit has been tight.
    It is providing opportunities for U.S. businesses to 
contribute to our Nation's international economic 
competitiveness at a time when the Nation is struggling to 
recover from the recession. It helps the small businesses that 
have always been the engine of our economy, the workers who are 
still seeking employment, and the families and communities that 
they support. During this exciting and challenging time for the 
Eximbank, Ms. Loui is the right nominee to join the Board.
    Under Ms. Loui's leadership over the past 30 years, her 
company, OmniTrak, has become a leading research and planning 
firm in Hawaii. It is recognized for its expertise and work in 
Asian markets in tourism, finance, health, communications, 
telecom, retail, Government, real estate, and land development. 
Ms. Loui previously served as president of the East West Center 
Association, as vice president of the Bank of Hawaii, and as a 
development planner for the United Nations Development 
Programme and UNESCO in Asia. And, of course, her work in the 
community--which includes being a member of the APEC Host 
Committee for the Leaders meeting in Honolulu in November of 
this year--has been invaluable.
    In short, Ms. Loui has developed an expertise in business 
that perfectly aligns with her soon-to-be new role on the 
Eximbank. With her passion for business and drive for success, 
I have every confidence that she will make tremendous 
contributions to the Bank.
    But her qualifications for this appointment go beyond her 
impressive education, resume, and extensive experience. The 
entrepreneurial spirit runs in her family. Not only is OmniTrak 
Hawaii's largest market research firm, Pat's parents, brothers 
and sisters, and in-laws have all run business ventures ranging 
from restaurants, marine design and engineering, insurance, 
flowers, and furniture. And, according to family members, it is 
no surprise that business runs in the family: The matriarch and 
patriarch of the Loui family met because of business.
    Four generations ago, Shizuko Katashima owned a large 
market in Kapahulu, which she sold to Alicia Loui. Shizuko's 
daughter, Alyce, met and married Alicia's son Fred. And family 
and island history was made.
    Ms. Loui, please accept my congratulations on your 
nomination. Mahalo thank you for your dedication to public 
service.
    Thank you very much, Mr. Chairman.
    Chairman Johnson. Thank you, Senator Akaka.
    Senators Pryor and Boozman will now introduce Mr. Walther. 
Senator Pryor.

 INTRODUCTION OF NOMINEE LARRY W. WALTHER BY MARK L. PRYOR, A 
            U.S. SENATOR FROM THE STATE OF ARKANSAS

    Senator Pryor. Thank you, Mr. Chairman, and I want to thank 
Senator Shelby as well as all the Members of the Banking 
Committee who are here today to consider Larry Walther's 
nomination to be a Member of the Board of Directors of the 
Export-Import Bank of the United States. I believe he is an 
excellent choice. He has 30 years of experience with the old 
Southwestern Bell Telephone Company, now AT&T. After he left 
there, he worked for the Arkansas Economic Development 
Department, and he was instrumental in landing many, many big 
investments in our State, including Hino Motors and Denso 
Manufacturing. And so he has this great mix of public and 
private sector experience, and I think he brings that to the 
table.
    Obviously, right now, given the state of our economy, we 
need people who are well qualified, enthusiastic, and 
experienced in these types of positions. He is exactly the 
right person for that.
    And, last, let me say that the mission of the Export-Import 
Bank is very needed today. About 85 percent of everything that 
they do directly benefits small business in this country. They 
can be great job creators here. They can help us export 
American goods and services all over the world, and I certainly 
hope that this Committee will give him a favorable 
consideration.
    Thank you, Mr. Chairman.
    Chairman Johnson. Thank you, Senator Pryor.
    Senator Boozman.

  INTRODUCTION OF NOMINEE LARRY W. WALTHER BY JOHN BOOZMAN, A 
            U.S. SENATOR FROM THE STATE OF ARKANSAS

    Senator Boozman. Thank you very much, Chairman Johnson and 
Ranking Member Shelby, for allowing me to speak at this very 
important meeting today. I am honored to be here and join with 
Senator Pryor in introducing and supporting Larry Walther's 
nomination to the United States Export-Import Bank Board of 
Directors. His impressive background and extensive work 
experience more than qualify him for this position.
    A graduate of the University of Arkansas at Monticello, 
Larry began his career as a switching engineer for Southwestern 
Bell Telephone Company, which then led him to a 30-year career 
with SBC Communications. He served for over 3 years as the 
Executive Director of the Arkansas Department of Economic 
Development. In this important position, he was responsible for 
the direction and management of the department and for 
representing the Governor and the State on all matters 
concerning statewide issues of economic development and, as 
Senator Pryor alluded to, did a very, very good job.
    Most recently, he served as the Director of the U.S. Trade 
and Development Agency from March 2008 to January 2009. As our 
Nation faces high unemployment, it is imperative that we have 
leaders with managerial experience who best know how to create 
jobs and help economies thrive.
    Larry's nomination comes at a critical time, and we need 
his expertise as we work together to preserve America's 
strength in the global marketplace. I believe Larry Walther 
will do a great job, and I know we will be proud of his future 
accomplishments at the Export-Import Bank. I congratulate him 
on this well-deserved nomination and strongly support his 
confirmation.
    Thank you very much, and with that I yield bank.
    Chairman Johnson. Thank you, Senator Boozman.
    We will now proceed to the oath. Will the nominees please 
rise and raise your right hand? Do you swear or affirm that the 
testimony that you are about to give is the truth, the whole 
truth, and nothing but the truth, so help you God?
    Ms. Loui. I do.
    Mr. Walther. I do.
    Chairman Johnson. Do you agree to appear and testify before 
any duly constituted Committee of the Senate?
    Ms. Loui. I do.
    Mr. Walther. I do.
    Chairman Johnson. Please be seated.
    Please be assured that your written statements will be part 
of the record. Please also note that the Members of this 
Committee may submit written questions to you for the record, 
and you should respond to those questions promptly in order for 
the Committee to advance your nomination.
    I invite the witnesses to introduce your family and friends 
in attendance before the beginning of your statements. Ms. 
Loui, you may begin.

STATEMENT OF PATRICIA M. LOUI, OF HAWAII, TO BE A MEMBER, BOARD 
     OF DIRECTORS, EXPORT-IMPORT BANK OF THE UNITED STATES

    Ms. Loui. Yes, Senator Inouye has kindly introduced my 
family: my husband, Michael Schmicker; my son, Christopher 
Schmicker; brother, Steven; sister, Kathleen; and niece, 
Kristyn. Thank you again.
    Chairman Johnson, Senator Shelby, and distinguished Members 
of the Committee, thank you for the honor of appearing before 
you as a nominee for the Board of Directors of the Export-
Import Bank of the United States. I am deeply grateful to 
President Obama for nominating me. May I also warmly thank 
Senator Inouye and Senator Akaka for their friendship, generous 
introduction, and ongoing support.
    Though not here, thank you to my mother, Alyce, and late 
father, Fred, for their unconditional support.
    I feel that my professional career in small business, in 
banking, and in international development helps qualify me to 
make meaningful contributions to Eximbank's programs, and, if 
confirmed, I will work diligently to help Eximbank create and 
preserve U.S. jobs. As a woman-owned small business, our 
company has introduced Midwestern manufacturers to new markets 
in East Asia, has assisted an American entertainment 
corporation explore expansion from China to India, and has 
helped U.S. farmers increase market penetration in Southeast 
Asia. Born into a small business family, I learned at the 
dinner table and then as an entrepreneur the challenges small 
businesses face when working capital financing dries up, as it 
did in 1998 and 2008. This gives me a visceral commitment to 
Eximbank's congressional mandate on small business.
    If confirmed, I look forward to contributing to American 
export growth, particularly to Asia. Fifty-five percent of 
world population and almost 40 percent of current global GDP is 
there, as are three of nine Eximbank target countries which 
represent 1.5 billion people: India, Indonesia, and Vietnam. 
Whether at home or as tourists to the U.S., Asians look with 
hope and optimism to the United States and express strong 
interest in buying American products. U.S. exports in 
infrastructure, energy, medical equipment, transportation, and 
brand name durables have tremendous export potential. This 
fastest-growing region can generate jobs for America. My cross-
cultural training at the East West Center, development work 
with the United Nations, and 30 years in international 
marketing position me to contribute to the promotion of 
Eximbank services in the culturally diverse countries where the 
Bank is open for business.
    Besides increasing foreign market demand, it is important 
to grow domestic awareness of Eximbank's services as only 1 
percent of American companies currently export. As a former 
regional banker, I am especially interested in joining 
Eximbank's promotion of its services to community and regional 
banks as well as directly to small businesses. I understand 
both the benefits and risks of lending given my career as 
banker and businesswoman. By continuing sound financial 
practices and basing credit decisions on reasonable assurance 
of repayment, Eximbank can remain financially self-sustaining 
while fulfilling its jobs mandate. This is a core covenant 
between Congress, Eximbank, and the American people that I am 
fully committed to uphold.
    Even as our economy recovers, Eximbank can, I believe, be 
mutually beneficial for private enterprises, for labor and 
management, and for your constituents across our Nation. Last 
year, the excellent team at Eximbank supported more than a 
quarter million jobs, and its mission benefits diverse 
stakeholders. By mitigating credit risk and providing 
competitive terms, Eximbank encourages banks both small and 
large to finance exports. Businesses can sell American products 
more competitively by offering financing, and a robust, 
exporting economy creates jobs for American workers and 
benefits for local communities.
    This is why I respectfully ask for your support to serve on 
the Board of Directors of Eximbank. If confirmed, it would be 
an honor to give back to our country that has enabled my 
grandparents, my parents, and me to build successful careers 
and families around small business.
    Thank you for the opportunity to appear before you. I look 
forward to answering your questions.
    Chairman Johnson. Thank you, Ms. Loui.
    Senator Inouye, you may be excused, if you wish.
    Senator Inouye. Thank you.
    Chairman Johnson. Mr. Walther.

  STATEMENT OF LARRY W. WALTHER, OF ARKANSAS, TO BE A MEMBER, 
  BOARD OF DIRECTORS, EXPORT-IMPORT BANK OF THE UNITED STATES

    Mr. Walther. Thank you. I would like to introduce my wife 
and my best friend for 41 years, Janice, and along with me also 
is my son, Bill, an engineer with the Department of Army.
    Thank you very much, Chairman Johnson, Senator Shelby, and 
Members of the Committee. It is a great honor for me to be here 
today as a nominee to the Board of the Export-Import Bank of 
the United States. I am deeply grateful to President Obama for 
his nomination of me and to Senator McConnell for his 
recommendation and his support. I would also like to 
acknowledge the support of Senators John Boozman and Mark Pryor 
of Arkansas, two men I have known for many years and for whom I 
have great respect.
    I consider myself extremely fortunate to be here today. 
Early in my career, I entered the private sector with 
Southwestern Bill Telephone Company, where I rose from an 
entry-level switching engineer to Vice President of Corporate 
Services, and I was Chairman of the SBC Foundation. During that 
time, I had a wide variety of assignments, including 
engineering, economic analysis, marketing and pricing policy, 
regulatory relations, and philanthropic work. The majority of 
my career was spent in regulatory and public affairs, where I 
worked with State regulatory commissions and State government 
both in the legislative and executive branches.
    Since retiring from SBC, my career has focused on 
increasing commercial development both domestically and in the 
international arena. As the Executive Director of the Arkansas 
Department of Economic Development, I was charged with 
increasing inward investment into the State of Arkansas as well 
as supporting Arkansas companies in their effort to export 
their products and services overseas. In my 3-plus years as 
Executive Director, I played a major role in bringing companies 
like Hino Motors, Denso Manufacturing, auto parts supplier 
Eakas Corporation, to Arkansas. I also was involved in initial 
discussions and negotiations with recruiting Welspun of India 
to invest in the manufacturing facilities in Arkansas.
    Following my tenure at ADED, in 2007, I had the honor of 
being nominated by President Bush and being confirmed by the 
U.S. Senate to be the Director of the United States Trade and 
Development Agency, a sister organization to the Export-Import 
Bank of the United States. I consider it a great privilege and 
honor to have served as the Director of USTDA and to have 
played an important part in assisting U.S. companies develop 
export opportunities throughout the world.
    As I have prepared for the opportunity to join the Board of 
the Export-Import Bank, I have found that my passion and 
experience complement nicely the work of the Bank. Finding 
innovative ways to assist businesses, both small and large, to 
expand their markets beyond the borders and in the process 
create more and better jobs for the American workforce is 
something that I am passionate about. I know U.S. products are 
in great demand around the globe and it is vitally important 
that we make them available to those buyers that would 
otherwise not have access to the best products in the world. 
The Export-Import Bank is playing a critical role in bringing 
this important aspect of commerce and job growth to the U.S. 
business, and if confirmed, I look forward to being a part of 
Eximbank's team.
    Mr. Chairman, Senator Shelby, and Members of the Committee, 
thank you again for the opportunity to appear before you today 
as I seek your support for my nomination to be a member of the 
Board of Directors of the Export-Import Bank of the United 
States. Thank you.
    Chairman Johnson. Thank you, Mr. Walther.
    Senator Boozman, you may be excused if you wish.
    Ms. Loui, throughout your career, you have worked with 
American companies as they seek to enter the Asian market. What 
are the biggest challenges and opportunities facing U.S. 
companies as they seek to expand into Asia?
    Ms. Loui. Some of the challenges facing American businesses 
as they export start with the lack of knowledge, perhaps, of 
the size of the markets and the opportunities that it provides. 
Currently, 95 percent of the world's customers now live outside 
the United States, yet only 1 percent of American businesses 
export. And I think that Ex-Im plays a very important role in 
both promoting exports as well as mitigating the risk of going 
overseas.
    If confirmed, I would look to participate very actively in 
Eximbank's global outreach program, an interagency program that 
brings the exporters, the financiers, the success stories 
together with small businesses in rural areas as well as in 
urban centers.
    Second, it is very important for small business to have 
access 24/7. Most small businesses do not operate on weekdays 
and nine-to-five. They use technology. They use their weekends 
to explore new strategies. And so this--continuing to expand 
the Web access and webinars, for example, will be extremely 
important.
    And finally, I would recommend, if confirmed, working 
strongly through professional networks. Strategic alliances 
with community-based financial organizations as well as 
professional networks will help to leverage Eximbank's efforts 
into some of the smaller markets that we do not know--that know 
less now about exporting to Asia.
    Chairman Johnson. Thank you.
    Mr. Walther, as the former head of the Economic Development 
in Arkansas, what can you do to make the Bank more responsive 
to the needs of rural U.S. exporters throughout the country? My 
home State of South Dakota is very rural and I want to ensure 
that the bank reaches out to even more small businesses in 
rural parts of the country that might need individualized 
assistance to reach their export markets.
    Mr. Walther. Mr. Chairman, that is an excellent point. 
There are a great number of businesses, both small and large, 
within the United States that really do not have access or 
knowledge about the export arena, about what they can do with 
the products and services that they are involved in, and so the 
outreach--part of it is the international arena, but even as 
important, maybe more important, is providing an outreach to 
the businesses here in the United States.
    I am from a rural State and I understand the issues. We 
have created a World Trade Center in Northwest Arkansas for 
that very purpose, to provide information to businesses in the 
area or in the geographical area around Northwest Arkansas so 
that they understand what they can do internationally, what 
their products are worth internationally.
    And so the Export-Import Bank has a program where they are 
doing a tremendous outreach, and I think we need to continue to 
do that. It is critically important in order for the U.S. to 
continue to export their products.
    Chairman Johnson. For both nominees, information technology 
is an important tool in ensuring that the Bank is operated 
effectively and transparently. What can the Bank do to improve 
how it works with technology to make its interactions with 
customers more efficient and transparent? Either of you.
    Mr. Walther. Well, technology--I am from a technology 
company, Southwestern Bell and then AT&T, and I was involved a 
great deal with Bell Labs whenever that company existed, and so 
technology is just continuing to move rapidly. It is almost at 
warp speed. And we at the Bank need to stay pace with that. 
Industry is. The young people of this country are 
technologically savvy and we at the Bank need to stay at the 
same pace they are so that we can communicate with them.
    We can communicate around the world instantaneously now to 
the markets that are around the world, China, Africa, South 
America. They are--they have the technology and continue to 
grow their technology just like the United States. So I think 
it is critically important that we keep pace with technology in 
order to provide that access for the U.S. businesses.
    Chairman Johnson. Ms. Loui, do you have anything to add?
    Ms. Loui. Yes. I understand that Eximbank is currently 
undertaking a study on its IT capacity. It has introduced 
already some very important new Web access-based programs and 
it has improved the turn-around of loan requests using 
technology. But as Larry alluded to, without technology, we 
really cannot reach the many rural communities and small 
businesses across our vast country to educate them and to 
encourage them to use the services of Eximbank and to export.
    So I do look forward, if confirmed, to reviewing this IT 
report that is being produced now and hope that we can, indeed, 
keep up with the technology requirements that are required to 
do global business.
    Chairman Johnson. Thank you.
    Senator Shelby.
    Senator Shelby. Thank you, Mr. Chairman.
    Mr. Walther, the Bank is required to provide 20 percent of 
its financing to small business exporters. Over the years, the 
Bank has had a mixed record in meeting this goal. Ms. Loui 
mentioned the fact that only about 1 percent of American 
businesses actually export. We know it is a new world, but we 
have got great challenges and opportunities, as you well know, 
in this country.
    Are you satisfied--either one of you, but I will direct the 
first question to you--are you satisfied with the type and 
amount of financing the Bank provides for small businesses, 
which is the backbone of our economy, and do you think there is 
more that the Bank can do, and if you are confirmed, as I 
believe you will be, are going to push this initiative?
    Mr. Walther. Senator Shelby, I understand what you are 
saying. The Bank has been fairly successful at keeping the 20 
percent. It is difficult. Now, you remember that we are a 
portion of the financial community----
    Senator Shelby. We understand.
    Mr. Walther. ----and so it is difficult, but it is 
something that we have to keep our eye on. I know the Bank 
considers it very important, and if I am confirmed, I will 
continue the vigilance to make sure that small business gets 
the 20 percent or more, if we possibly can.
    Senator Shelby. Ms. Loui.
    Ms. Loui. Yes. Reviewing Eximbank's annual reports, I 
believe there have been new records set in the small business 
arena over the last few years. That said, there really--because 
small business is the engines of our economy, we really need to 
continue to be aggressive, and I would continue, if confirmed, 
to support the innovative product development that has been 
going on.
    For example, Eximbank recently developed a supply chain 
product which permits not only the lead manufacturer but their 
suppliers to obtain financing, and I saw the importance of this 
when our company consulted with General Motors to develop its 
first plant in Pudong, China, which is now the biggest profit 
center in the world. If you can not only assist General Motors 
but all the small automotive manufacturers spread out through 
this country, the jobs potential will be a multiple of just 
supporting the large manufacturer, and so I would continue, if 
confirmed, to support that aggressive product development and 
outreach.
    Senator Shelby. Thank you.
    In the area of sanctions--Iran--to both of you, with 
respect to the sanctions on companies that do business with 
Iran, are you committed, if you are confirmed, as I believe you 
both will be, to making sure that the Eximbank adheres to the 
law prohibiting the financing of transactions involving Iran? 
Mr. Walther.
    Mr. Walther. Yes, sir. We are a country of laws and we and 
I will always abide by those laws and I understand exactly what 
those laws are about with regard to Iran.
    Senator Shelby. Ms. Loui.
    Ms. Loui. Yes. I believe there are six countries that are 
currently under the trade sanctions and I will abide by the law 
and respect the law in regards to all six.
    Senator Shelby. Thank you.
    Ms. Loui, one of the primary problems that the Eximbank 
seeks to address, among others, is the uneven playing field 
that U.S. exporters, as you well know, face in the global 
economy, both with respect to OECD and non-OECD countries. Do 
you think there are additional policies that the Bank could 
pursue to level the playing field for American exports 
globally? In other words, if they are playing with one deck of 
cards and we with another, we are at a big disadvantage. What 
can the Bank do to make us more competitive?
    Ms. Loui. Yes, Senator. You know, I completely concur and 
am confident that on a level playing field, American products 
and services compete with any other foreign country in the 
world. The challenge, of course, is that the playing field is 
not always level. I believe the recent report by Eximbank that 
was submitted to Congress indicates that compared with our 
traditional OECD competitors, Eximbank is doing a very 
effective job in competition. The challenge comes from the fact 
that there are nontraditional competitors who are not 
signatories to OECD, such as Brazil, China, India, and emerging 
Russia. So we do need to evaluate how we will compete with the 
non-OECD signatories.
    The other area of competition comes from nonregulated OECD 
products, and Japan and Canada's ECAs have been very active in 
this area. If confirmed, I would support and would welcome 
participating in a review of the model Eximbank currently uses, 
that of the lender of last resort, to look at the trends in the 
current external marketplace and to determine whether this 
model is really the best model going forward.
    Senator Shelby. Mr. Walther.
    Mr. Walther. Well, I 100 percent agree with what Ms. Loui 
said. If we can compete on the same level, we will--we can--we 
will generally win. The problem is identifying where those 
anomalies exist, and if I am confirmed, I will continue to, as 
the Bank has done, to find those areas and to work to resolve 
them.
    Senator Shelby. Thank you. Thank you, Mr. Chairman.
    Chairman Johnson. Senator Akaka.
    Senator Akaka. Thank you, Mr. Chairman. I have no questions 
but urge the Committee to expedite the confirmation of these 
nominees.
    Chairman Johnson. Thank you, Senator Akaka.
    Senator Brown.
    Senator Brown. Mr. Chairman, thank you, and I welcome both 
Ms. Loui and Mr. Walther to the Committee and support your 
confirmation.
    Only one comment, and that is just last week, the Chairman 
of the Eximbank, Chairman Hochberg, was in Toledo, Ohio, with 
Scott Schlegel [phonetic] and others, and I appeared with him 
at First Solar, one of the leading solar manufacturers. I 
believe it is the leading solar manufacturer in the United 
States and Toledo is the second largest--Ohio, with Toledo 
leading, is the second largest solar manufacturing State in the 
country. We are third in State manufacturing overall in all 
products. The work of the Eximbank that both of you, Mr. 
WAlther and Ms. Loui, continue is essential for our--
particularly in light of this Congress's work, not always good 
work, on trade agreements which we see continuing a larger and 
larger and larger trade deficit.
    And while I have argued in this Committee to the Chairman 
of the Fed and others how important it is, rather than passing 
more trade agreements that tend to too often dismantle American 
manufacturing, that we should enforce the trade rules that we 
have. Today, the WTO concurred on a Chinese tire issue with the 
International Trade Commission, which will bring jobs directly 
back to our communities, to communities in Ohio, for example.
    And your work in leading in exports is such an important 
part of that, so I thank you for your past work, both of you in 
business, and your work in Government, too, and the work you 
will continue to do with Chairman Hochberg and all that the 
Eximbank means for our country. Thank you.
    Chairman Johnson. Senator Hagan.
    Senator Hagan. Thank you, Mr. Chairman, and I, too, wanted 
to welcome both of you to our Committee today. I wanted to just 
echo what you have heard today, but also that I think Chairman 
Hochberg is doing a very good job.
    Ms. Loui and Mr. Walther, as you know, U.S. businesses 
operate in a dynamic environment and business conditions are 
constantly changing. Sometimes, business conditions change due 
to policies that our Government imposes. Trade policies is an 
example from my home State, where many industries had to change 
when NAFTA and CAFTA were enacted. I am from North Carolina. 
What do you see as the role of the Board of Directors in 
ensuring policies and products meet the changing nature of 
industries and their supply chains, and will you take steps to 
ensure that the Bank is meeting industry needs?
    Ms. Loui. In our global world, I think the only given is 
change, and Eximbank has been quite aggressive in ensuring that 
its outreach promotion efforts to educate small businesses and 
large businesses about the opportunities in foreign markets is 
ongoing. It is also intra-agency, so it not only is Eximbank 
staff, but also participants from Commerce and other related 
trade promotion agencies working together. This is a very 
effective and efficient model and benefits the small user, to 
have several people in the same place at the same time.
    Also, in preparing for this hearing, I have had the benefit 
of using Eximbank's Web site, which has been expanded 
considerably. They now offer webinars, and that is another 
important tool for education. And as I previously mentioned, I 
think that some of the specific product development that they 
have done has been very responsive to changes in needs in the 
marketplace, such as the supply chain financing product as well 
as Solar Express, which is a very rapid turnaround program for 
clean energy requests.
    So these--if confirmed, I would continue to support these. 
Information is power, and so the more information we can get to 
the small and large businesses of America, the better chance we 
have to get those 99 percent that are not currently exporting 
to export.
    Senator Hagan. Thank you.
    Mr. Walther. I agree. Again, I agree a hundred percent. The 
Bank needs to stay in tune with what is going on in the 
business arena and what the business conditions are out there. 
Technology is a great way to continue to do that. So as we move 
forward, we have to keep our technological systems, our Web 
sites and other communications systems at the same pace that 
business is. And so in order for us to assist them, where we 
can come in and provide assistance to the businesses to do 
export, but we also need to make sure that they understand what 
the marketplace is out there, and that is critically important 
that we do that. So that is all I would add.
    Senator Hagan. Thank you. And we all know, I know, that 
small business is the backbone of our economy, and if we can 
certainly help small business export more, we will certainly 
help our country's economy, and I think that is critically 
important at this stage.
    And also, over the last several years in response to our 
economic crisis, the Eximbank has increased its authorized 
transactions. If we continue to see an extended downturn in the 
global economy, how do you think the Eximbank will be affected?
    Mr. Walther. It seems to me that because of the downturn in 
the economy, there is going to be a greater need for Eximbank 
financing and guarantees where the normal business community 
will not step in and do it. So because of that situation, it 
has put a greater pressure on Eximbank, and, therefore, a 
greater need for the authorization for additional money.
    Ms. Loui. Yes, and the only thing I would add is that 
Eximbank, I think, has increased about 70 percent in assets 
over the last 2 years and it will be bumping up against the 
current levels of authorization soon. And so it is important 
looking forward.
    That said, I am of the philosophy that Eximbank should not 
compete with the private sector but rather supplement it, and 
many of their products that provide working capital guarantees, 
that provide credit insurance, that provide take-out options 
for small banks are really win-win, and this is the spirit in 
which I would hope Eximbank would continue to operate in the 
future, even beyond our very difficult economic times at 
present.
    Senator Hagan. Thank you. I look forward to your 
confirmations, and thank you, Mr. Chairman.
    Chairman Johnson. Thank you, Senator Hagan.
    Thank you, Ms. Loui and Mr. Walther, for your testimony 
today and for your willingness to serve our Nation. I ask that 
all Members of the Committee submit any questions for the 
record by close of business on Friday, September 9. Ms. Loui 
and Mr. Walther, please promptly submit your answers to these 
questions in order for the Committee to advance your 
nomination.
    Now, we will turn to our next panel.
    Mr. Walther. Thank you.
    Ms. Loui. Thank you.
    [The first panel witnesses are excused.]
    Chairman Johnson. On our next panel we will consider the 
nomination of Richard Cordray to be the first Director of the 
Consumer Financial Protection Bureau.
    Mr. Cordray, welcome to the Senate Banking Committee and a 
warm welcome to your family and friends who are here this 
afternoon.
    The CFPB was born out of the failure by prudential 
regulators to hold financial companies accountable for 
complying with consumer protection laws. Congress created the 
CFPB to be a robust and independent agency focused on 
protecting consumers like military families and older Americans 
from abusive financial products. The CFPB was also created to 
streamline disclosures so consumers can make the best financial 
choices for themselves and their families. In fact, one of the 
CFPB's first projects is to simplify the long, confusing 
mortgage disclosure forms.
    The CFPB is an agency that the American public wants. A 
recent bipartisan survey shows that Americans strongly support 
the creation of the CFPB. The Director of the CFPB will play an 
important role in maintaining the agency's independence, 
promoting an equitable and transparent consumer financial 
marketplace, and exercising enforcement of consumer protection 
laws.
    On July 18, President Obama nominated Mr. Cordray to be the 
first-ever Director of the CFPB. The purpose of today's hearing 
should be to consider whether Mr. Cordray is qualified for that 
job. Instead, a vocal minority is playing games with the 
process and holding Mr. Cordray's nomination hostage. This 
political gamesmanship is preventing Americans from receiving 
the consumer protections they deserve and putting community 
banks and credit unions at a competitive disadvantage to 
nonbank financial companies. This vocal minority insists on 
rehashing the same debate Congress had last year when it 
created the CFPB as an accountable yet independent regulator.
    The fact is that every regulatory agency is structured with 
different features that make it accountable. Each agency has a 
unique combination that fits its mission and independence. Last 
year, Congress decided on a structure for the CFPB which 
borrows some accountability features from other regulators but 
also includes several new features unique to the consumer 
agency.
    The chart on display lists many of the ways the CFPB is 
accountable. For example, the Financial Stability Oversight 
Council has the power to overturn CFPB's regulations. By law 
the CFPB's budget is capped, and the President has the power to 
fire the CFPB Director. So the misleading claim of no CFPB 
accountability trumped up by special interests and put forth by 
a vocal minority should be exposed for what it is: an attempt 
to destroy the Bureau's ability to do its job of protecting 
American consumers.
    I would remind my colleagues that in 2008 a bipartisan 
Senate, including Members on both sides of the aisle sitting 
here today, help to create the Federal Housing Finance 
Administration. FHFA is also an independent agency headed by a 
sole Director subject to a GAO audit and purposefully not 
subject to the congressional appropriations process.
    Now let us talk about what the focus of a nomination 
hearing should be. Richard Cordray has spent his career in 
public service caring about people. He has taken the time to 
understand and come up with the best, most practical solutions 
for their problems. Mr. Cordray supports small businesses and 
honest companies. He has been a member of his local Chamber of 
Commerce for 22 years. He believes in leveling the playing 
field so that small companies can compete fairly and that 
playing by the rules is good for business.
    I ask unanimous consent to include several letters of 
endorsement in the hearing record.
    Mr. Cordray also believes that people and corporations must 
be responsible for their own behavior, and if they act 
responsibly, they should get a fair shake.
    It is my hope that, if confirmed, Mr. Cordray will use his 
knowledge and experience as a law enforcement official and 
public servant to better protect American consumers and to 
enhance the quality of our consumer financial markets.
    We have seen many important nominations blocked in the 
Senate and denied an up-or-down vote on confirmation. The 
stability of our financial system and of our economy is simply 
too important to put at risk by political games. It is time to 
allow the CFPB to do its job to the fullest extent of its 
authority with a Senate-confirmed Director in his place.
    I now turn to Senator Shelby.

             STATEMENT OF SENATOR RICHARD C. SHELBY

    Senator Shelby. Thank you, Mr. Chairman.
    I do not think it will surprise anyone to hear that we 
believe that today's hearing is quite premature. We do not 
believe that the Committee should consider any nominee to be 
the Director of the Bureau of Consumer Financial Protection 
until reforms are adopted to make the Bureau accountable to the 
American people.
    Earlier this year, Mr. Chairman, 43 of my Senate colleagues 
and I sent a letter to President Obama expressing our serious 
concerns about the Bureau's lack of accountability. We also 
proposed three reasonable reforms to the structure of the 
Bureau. We had hoped to work with the majority to address this 
issue before the President nominated a Director.
    Unfortunately, neither the President nor the majority has 
made any effort to work with us to improve the accountability 
of the Bureau. Instead, the President has nominated Mr. Cordray 
to be the first Director. It is regrettable that the President 
and the majority have chosen to ignore our request rather than 
work with us to improve the Bureau's accountability. It may be 
good politics for them, but it is certainly bad policy for the 
American people.
    One of our Nation's founding principles is that the 
Government should be accountable to the people. Yet the 
majority structured the Bureau to grant its Director 
unprecedented authority over the lives of the American people 
without any real effective checks. All of the Bureau's power is 
concentrated in the hands of a Director. The Director 
determined which rules are enacted and which enforcement 
actions are brought. The Director makes all hiring decisions 
and decides how the agency spends its resources.
    Because of the expansive jurisdiction of the Bureau, every 
American will be affected by the Director's decisions. The 
Director will singlehandedly determine the financial products 
consumers can buy as well as which consumers have access to 
credit and which do not.
    Accordingly, the Director's decisions will impact whether 
Americans can buy a home, a car, or even basic household goods. 
It is staggering the amount of control the Director will exert 
over the daily financial choices available to the American 
people.
    Despite having such broad powers, however, there is no 
meaningful check on the Director's authority. The Director 
cannot be removed except on extremely limited grounds of 
inefficiency, malfeasance, or neglect of duty. In other words, 
the Director cannot be removed for poor policy choices.
    In addition, bank regulators do not have a meaningful 
ability to ensure that the Director's actions do not needlessly 
undermine the safety and soundness of our banks. While some 
claim that the Financial Stability Oversight Council could--
could--overrule the Director, this so-called check is simply 
illusory. The requirements needed for the Council to act are so 
onerous that, in practice, the Council will never be able to 
exercise this authority. That should not surprise anyone, 
especially here. That was the way it was designed.
    For example, the Director of the Bureau sits on the Council 
and will vote to determine whether or not the Council should 
overturn one of his decisions. It is not hard to guess how the 
Director will vote. As a result, the Director will be virtually 
free of any constraints on his authority during the 5-year 
term.
    No one person, I believe, should have so much unfettered 
power over the American people. It blatantly violates the 
spirit of our democratic system of Government. Our pursuit of 
better consumer protections should not require us to compromise 
our basic constitutional values. This should be something on 
which we can all agree.
    Moreover, the principle involved will have real 
consequences. Unless the Bureau is reformed, it is only a 
matter of time before this concentration of power is abused or 
misused to the detriment of American consumers and the economy. 
The job figures we have seen over the summer demonstrate how 
the Administration's heavy-handed regulatory agenda is 
crippling the economy with unnecessary costs and legal 
uncertainty. There could not be a worse time, I believe, to 
give an unelected and unaccountable bureaucrat a blank check to 
impose even more ill-considered rules that could further 
undermine our weak economy. At a time when our Nation's 
unemployment rate is over 9 percent, this would be a very 
dangerous gamble.
    In closing, the Chairman today here has attempted to turn 
the phrase, I believe, ``vocal minority'' into a pejorative. 
Over the years, however, Senators from both parties, Democrats 
and Republicans, have agreed upon rules governing this chamber 
that are designed to protect the rights of the minority, be it 
Democrats or Republicans. The requests made by this particular 
vocal minority seek only to preserve the system of checks and 
balances embodied in the Constitution. That is not what I would 
call ``a radical undertaking.''
    Thank you, Mr. Chairman.
    Chairman Johnson. Senator Reed.

                 STATEMENT OF SENATOR JACK REED

    Senator Reed. Well, thank you very much, Mr. Chairman, and 
I am someone who believes very strongly that the work of the 
Consumer Financial Protection Bureau must go forward and should 
go forward under the direction of Mr. Cordray. I think to block 
his appointment simply to express displeasure with either the 
process or the substance of the law is the wrong way entirely.
    As the Chairman pointed out, the Federal Housing Finance 
Administration was created with virtually the same authority 
and on a bipartisan basis supported by most, if not all, of my 
colleagues on the other side. There was no discussion of 
preemption of the Constitution or of checks and balances or 
anything else. The Consumer Financial Protection Bureau was 
trying to deal with a very serious problem, and that is 
protecting consumers, protecting consumers throughout this 
country. That is the one voice, when we think about voices, 
that is seldom heard loudly enough in Washington, seldom heard 
certainly from bank regulators. That is one of the lessons from 
what took place in the decade from 2000 to 2008--or at least 8 
years--in which consumers were being systematically preyed 
upon. There was no agency. And as Attorney General, I think you 
were frustrated by your attempts that were preempted by Federal 
banking regulators, that were preempted by Federal law, that 
were preempted by many things.
    We want consumers to have a voice, and, frankly, the notion 
that this is unchecked, unbounded power is simply wrong. All of 
the rules that the Director will enforce are created by 
Congress. We voted on them. Sometimes we disagreed, but they 
are all congressional laws. And, frankly, if he goes beyond 
what the law is, the courts will very quickly be involved, as 
has been demonstrated--and there are a huge number of financial 
institutions in a court today to protect their self-interests 
and protect the process. And if they are arbitrary and 
capricious, the rules will be struck down. But if those rules 
are consistent with the laws we pass through a democratic 
process to protect consumers, then consumers will receive 
protection.
    And so I think that this whole debate has been sort of 
extended much too long, and as a result consumers are being and 
potentially will be harmed.
    I particularly, because I worked on this issue along with 
my colleague Senator Brown from Massachusetts, am concerned 
about military personnel. They will not have the benefit of 
some of the protections that we put in place because there will 
be no one sticking up for them. Right now, Holly Petraeus is 
leading the office, but she can make--and she does--speeches. 
She can go out and talk to soldiers and sailors and marines and 
airmen, but until someone stands up with the ability to enforce 
the rules for their benefit, they will still be preyed upon. 
And they are.
    I think the other thing that we have to recognize, too, is 
as we go forward we are, I think, trying to ensure that we do 
not replicate the crisis of 2008, that we do not have a 
financial collapse. Much of that was predicated and based upon 
the predatory behavior of institutions. One of the great 
aspects, I think, of the Dodd-Frank Act is that for the first 
time we tried to shine some light on the shadow banking system. 
The FDIC regulates financial institutions. The OCC regulates 
national banks. The Federal Reserve regulates banking holding 
companies--but for the first time we decided to say let us take 
an across-the-board position with respect to the shadow 
financial system.
    So, this notion of let us wait until we get it perfect 
before we appoint somebody would have delayed, I think, the 
election of George Washington for many decades.
    So, Mr. Cordray, let me just ask--I have very little time--
one specific question. You already have authority transferred 
to you from seven agencies that is in this organization that is 
being implemented today. Is that correct? Go ahead.
    Mr. Cordray. Yes.
    Chairman Johnson. He has not given his statement.
    Senator Reed. Oh, I am sorry. I want to be sensitive to my 
colleagues. So this is opening statements. I wanted to do both. 
Forgive me.
    [Laughter.]
    Senator Reed. I am a man with a mission. Then let me 
quickly conclude in 20 seconds.
    I think we have got to move forward. We essentially know 
what this is about. The Chairman has pointed it out. This is 
not, I think, about sensible proposals to make a reform. It is 
hard to do that until you see the agency operate in the field, 
on the ground. And I hope very quickly we can confirm you, Mr. 
Cordray, so we can do that.
    Chairman Johnson. Senator Corker.
    Senator Corker. Mr. Chairman, as is the norm, I do not have 
an opening statement, but since I do not and it looks like 
everybody is going to take a lot of time, I sure would like to 
have a little leeway with the questions. But I certainly 
welcome the witness and look forward to his testimony and thank 
him for bringing his impressive family. I do not know how his 
children continue to smile as we are up here, but they do a 
great job.
    Thank you.
    [Laughter.]
    Chairman Johnson. Senator Akaka.

              STATEMENT OF SENATOR DANIEL K. AKAKA

    Senator Akaka. Thank you very much, Mr. Chairman. I am 
pleased to join you in welcoming Mr. Richard Cordray and his 
family--a lovely family--who has been nominated by President 
Obama to serve as the first Director of the Consumer Financial 
Protection Bureau. I am confident that he will make the CFPB a 
strong defender for consumers. This has been needed in our 
country. He knows the markets and has the demonstrated track 
record.
    He has been a fierce advocate for consumers and middle-
class families as Attorney General of Ohio and then as the head 
of enforcement at CFPB. We will count on him to fight against 
the predatory lending practices that contributed to the 
economic crisis from which we are still recovering.
    I look forward to Mr. Cordray's testimony today to hear 
about his vision for the landmark CFPB and what he hopes to 
accomplish as its first Director.
    Mr. Cordray is a highly qualified nominee and an excellent 
pick to become the first Director of the Consumer Financial 
Protection Bureau, and I ask the Committee to consider his 
nomination favorably.
    Thank you very much, Mr. Chairman.
    Chairman Johnson. Thank you.
    Senator Brown.
    Senator Akaka. I have questions that I will submit for the 
record later.
    Chairman Johnson. Senator Brown.

               STATEMENT OF SENATOR SHERROD BROWN

    Senator Brown. Thank you, Mr. Chairman. Ranking Member 
Shelby, thank you.
    In a moment I will have the honor of introducing Richard 
Cordray, devoted family man, a distinguished lawyer and 
advocate, a public servant. I will hold that until right before 
he gives his testimony.
    We should not have to remind our colleagues that just 3 
years ago our economy was on the brink of collapse. Millions of 
Americans lost their jobs. Hundreds of thousands of people in 
my State lost their homes. People all over the country lost 
much of their retirement security. Hundreds of banks failed. 
Thousands of businesses have been shuttered. This Committee was 
forced to take extraordinary actions.
    This was a man-made catastrophe that could have been 
avoided if we had had, as Senator Reed said, a better 
regulatory system. But the network of agencies tasked with 
protecting consumers was full of holes. Ohio, for example, was 
far too slow to enact meaningful consumer protections. Local 
efforts to try to curb rip-off loans were blocked by Federal 
regulators. Efforts to convince Federal regulators to act were 
ignored until too late. Yet just 3 years after that near 
depression, profits of financial firms now make up the same 
percentage--about 40 percent of all corporate profits in this 
country go to financial firms. The profits of financial firms 
now make up about the same percentage of all corporate profits 
as they did before the financial crisis. The banks that were 
too big to fail because of mergers, because of what shook out 
of these last 3 years, have become even bigger.
    After decades of coddling Wall Street, Main Street still 
needs our help. Americans are struggling to find jobs. Their 
homes are still underwater. Their pensions are still being 
drained.
    To protect against future wealth-destroying crises, 
Congress created, with bipartisan approval--with bipartisan 
approval--the Consumer Financial Protection Bureau to help 
ensure that consumer protection is a priority rather than an 
afterthought. It is an independent agency with a single 
Director--not all that uncommon in the Federal Government. Its 
mission is to bring oversight and transparency to checking 
accounts, to credit cards, to mortgages, to student loans. It 
is empowered with the tools to ensure our financial system 
supports job creation. By ending the tricks and the traps 
families and small businesses will keep more of their hard-
earned money, will be able to build middle-class wealth and 
help businesses thrive.
    The Bureau is subject, as Chairman Johnson said, to 
stringent notice, consultation, analysis requirements under 
Dodd-Frank, under the Administrative Procedures Act, under the 
Small Business Regulatory Enhancement Fairness Act, and the 
Regulatory Flexibility Act. Through the Financial Stability 
Oversight Council, the other banking regulators have 
unprecedented authority to overturn CFPB's rules.
    Already CFPB is ensuring that mortgage contracts are 
written in ways that consumers can more easily understand. It 
has earned positive reviews from industry and consumer groups 
alike for the substance and the process involved in creating a 
new model mortgage loan disclosure form. It is helping men and 
women in uniform, as Senator Reed pointed out, preventing them 
from being targeted by bad actors who profit from financial 
practices that defraud and deceive those serving the cause of 
freedom.
    Mr. Chairman, I called the Senate historian recently and 
asked him when was the last time or was there a time when the 
Senate actually--when a minority in the Senate pledged to block 
a nominee because that party actually opposed the agency's very 
existence. When was the last time that a group of Senators--44, 
as Senator Shelby points out--signed a letter threatening a 
filibuster implicitly, saying they will not confirm somebody 
until we get our way, until we change the law, the structure of 
the agency? Never happened before until right now. It is 
unprecedented. And that kind of partisanship is why people are 
so unhappy with their Government. They see a dysfunctional 
Government that simply cannot do this.
    We already had this debate once about the structure of this 
agency. Amendments were offered that would have watered down 
the agency's authority. They were considered, fairly, in 
Committee, on the Senate floor. They were rejected by Senators 
from both parties.
    Now is not the time to undermine an agency that a 
bipartisan majority in Congress created. What kind of precedent 
does this set--demanding and then accusing the majority of not 
even working with them, demanding ``We will not confirm 
somebody as qualified as Richard Cordray''? Nobody questions 
his qualifications as his background, his qualifications, and 
his performance in office of the various jobs he had, no one 
questions that. They only want to block his nomination, or 
anybody else's nomination, simply because they do not like the 
agency. They apparently do not want an agency representing 
consumers. That is what got us into this.
    The minority, the result of their actions is to tilt the 
playing field--in addition to what else this has done, to tilt 
the playing field so that traditional banks right now are 
regulated while nonbank lenders, which bear the lion's share of 
the responsibility for the recession, are left untouched. That 
is why prominent bankers in this day in this country and many, 
many, many in Ohio are supporting Rich Cordray and want to get 
this agency empowered and want to get this agency--get the 
Director in place so the agency can do its full panoply of 
responsibility. And instead, right now the agency regulates 
traditional banks but not nonbank lenders, where many of the 
problems come from this whole meltdown in our economy. The 
minority's own witness in the Subcommittee I chair on Financial 
Institutions and Consumer Protection said as much on August 
3rd.
    I hope my colleagues will set aside their fears, their 
anger, their dislike of this consumer agency and do their job, 
and their job is to confirm someone who is qualified to head up 
this agency that was created under the law and is the law in 
this country. Consumers need these protections. The banking 
industry needs this kind of fair-minded kind of comprehensive 
way of doing its job.
    Rich Cordray's distinguished career as a Supreme Court 
clerk for two Supreme Court Justices, attorney, Ohio Solicitor 
General, Ohio Treasurer, Ohio Attorney General, State 
legislator has shown he is the right person for the job at the 
right time for our country. It is time to put the consumer cop, 
Mr. Chairman, on the beat.
    Chairman Johnson. Thank you, Senator Brown.
    Senator Hagan.

                 STATEMENT OF SENATOR KAY HAGAN

    Senator Hagan. Thank you, Mr. Chairman.
    We all know that the Consumer Financial Protection Bureau 
was a key component of the Dodd-Frank Act and it is time to put 
a Director in place so that the Bureau can fulfill its 
important mission. I appreciate you coming today and I 
certainly do appreciate your family being here with you.
    For too long, Americans have fallen victim to financial 
abuses at the hands of predatory lenders that operate with 
impunity outside of consumer finance laws and away from the 
regulatory oversight. Payday lenders took advantage of people 
in North Carolina for many years, until, after considerable 
legislation and litigation, we put a stop to the practice. I am 
optimistic that with a confirmed Director in place at the CFPB, 
we can start to rein in those predatory lenders in parts of the 
country where they continue to prey on American families 
outside the regulatory environment.
    And offices within the Bureau have already embarked on 
important work, and once again, it is time to put a Director in 
place to support these offices. The Office of Servicemembers 
Affairs, for example, was set up within the Bureau to ensure 
that military personnel and their families are educated and 
empowered to make better informed decisions regarding financial 
products, and the office is already doing tremendous work.
    In May of this year, I held a roundtable at Fort Bragg in 
North Carolina with Holly Petraeus, the Director of that 
office, and Mrs. Petraeus and I heard directly from the men and 
women in uniform about the challenges that they face as 
consumers of financial products and the lengths to which the 
officers must go to actually protect the troops from financial 
abuses at the hand of predatory lenders. And I think that a 
strong Director is going to be crucial to ensure that the 
momentum of the office continues and can be translated into 
meaningful financial protections to our men and women in 
uniform.
    I am aware that a number of concerns have been raised about 
the impact that the Bureau will have on lending. I am going to 
be particularly interested in how, Mr. Cordray, you intend to 
balance the needs of consumer protection with the need for 
community financial institutions to provide loans to homeowners 
and to small businesses, and I am hopeful that we can mitigate 
these concerns and move forward. It is time to put a Director 
in place so that the Bureau can get on with its important work.
    Thank you, Mr. Chairman.
    Chairman Johnson. Senator Menendez.

              STATEMENT OF SENATOR ROBERT MENENDEZ

    Senator Menendez. Thank you, Mr. Chairman.
    Mr. Chairman, first of all, I want to thank you for moving 
forward with this hearing and I want to thank Attorney General 
Cordray for accepting a nomination under very difficult 
circumstances and for his appearance here today. I can just 
tell you, if I had the smile of your son and daughter, I would 
win my election hands down all the time, so----
    [Laughter.]
    Senator Menendez. ----I am going to have to learn it, 
because it does not come naturally to me. They have beautiful 
smiles.
    However, you know, consumer protection and the Director of 
the Consumer Financial Protection Bureau are important topics. 
But unfortunately, progress has been fleeting, progress, that 
is, in holding Wall Street accountable and protecting 
consumers. The Consumer Financial Protection Bureau officially 
opened its doors in July. Mr. Cordray was nominated days 
before, but months before--months before--my colleagues on the 
other side of the aisle said that they would be siding with 
Wall Street and blocking any nominee--let me repeat that, any 
nominee--from heading the Consumer Financial Protection Bureau.
    Not only would they be blocking anyone, regardless of 
qualifications, and I think we might agree that we have an 
eminently qualified candidate here who not only receives the 
approval and support of consumer groups throughout the country, 
but the regulated industries that, in fact, they would oversee 
have positive things to say about him as an individual.
    So not only would they block anyone regardless of 
qualifications, they demand that we radically change the 
structure of this new consumer protection agency months before 
it had even opened its doors and many more months after this 
matter was legislatively settled.
    Now, the last time I checked, in a democracy, when there is 
an election of the people, they choose their representatives. 
You have votes both in committee and on the floor, and then 
those votes ultimately lead to passage of legislation signed by 
the President of the United States. It is the law of the land 
unless we want to change the dynamics of what democracy means 
in this country.
    In other words, before they even had a chance to 
objectively evaluate the work and the effort of the Consumer 
Financial Protection Bureau, and despite the glowing reviews 
that many industry members were already giving it, my 
colleagues said, no, shut it down, before it had even begun its 
important work.
    So, Mr. Chairman, I am looking forward to this hearing 
which is in the pursuit of confirming someone for the 
chairmanship subject to existing law. Now, Americans may be 
free and are free to disagree with the law, but they are not 
free to disobey it. We, in fact, may be free to say we do not 
like a law that was passed, but that does not mean we should 
block it as the way in which we conduct the course of actions 
of this country.
    It seems to me that minority rights are very important, but 
that does not nullify majority rights as elected by the people 
of this country, especially when that majority, particularly in 
passage of this law that is the law of the land, was the 
majority not just of a singular party but a majority of both 
parties.
    Now, a minority has a right, but it does not have the right 
to nullify the law by virtue of its actions of insisting that 
it will not approve a chair regardless of that individual's 
capacity, regardless of that individual's intellect, regardless 
of that individual's ability.
    So, Mr. Chairman, I hope that we will be able to make some 
progress so that we can hold Wall Street accountable.
    And finally, I have to say, I have the greatest respect for 
my distinguished colleague, the Ranking Republican on this 
Committee, but I just take a different point of view with him, 
because when we talk about what has happened in this economy, 
what has happened in this economy is that we had not a free 
market, which I support, but a free-for-all market, and in that 
free-for-all market, where regulators were asleep at the switch 
and other entities were not in existence to protect the 
consumer, we ended up with not just a great recession but on 
the verge of a new depression.
    And so we do not want to relive that history so that we 
can, in fact, protect consumers and ensure that our economy can 
move forward and not run these risks again. The Consumer 
Financial Protection Bureau is an essential part of that, 
recognized by a majority of both sides of the aisle, and that 
is why it is the law of the land and that is why it needs a 
chairman.
    Thank you, Mr. Chairman.
    Chairman Johnson. Thank you.
    Now, for an introduction of our nominee, Senator Sherrod 
Brown will introduce Richard Cordray.
    Senator Brown.

  INTRODUCTION OF NOMINEE RICHARD CORDRAY BY SENATOR SHERROD 
                             BROWN

    Senator Brown. Thank you again, Mr. Chairman. It is my 
honor to introduce one of the finest public servants I have 
ever met, Richard Cordray.
    Rich's mother was a social worker. His father, who has been 
legally blind since birth, worked with the developmentally 
disabled for 43 years. It is clear where Rich Cordray and his 
family learned about public service.
    As Ohio's Attorney General, he was a strong voice for 
Ohioans who struggled to stay in their homes and consumers who 
faced unfair practices by deceptive lenders. He targeted 
financial institutions, including Fannie Mae, that used 
accounting fraud to undermine investments by pension funds that 
provided retirement security for teachers and janitors and 
secretaries. He took on unscrupulous actors. He worked closely 
with Ohio's banks to craft effective targeted legislation to 
prevent banks from engaging in predatory lending.
    He was a treasurer at the county level in Franklin County, 
this county the State's second-largest county and home of the 
State capital, and at the State level as State Treasurer, he 
promoted financial literacy efforts in schools and with 
seniors. Throughout his career, as solicitor of Ohio, as a law 
professor, as an attorney in private practice, Rich has been a 
strong voice for his clients and for consumers.
    The top executives of Ohio's Fortune 500 companies, Proctor 
and Gamble, Limited Brands, Forest City, American Electric 
Power, strongly endorse his nomination. Two fine 
representatives of Ohio financial institutions, both of whom 
are here today, Mike Van Buskirk of the Ohio Bankers League, 
John Koslowski of the Ohio Credit Union League, are here today 
in support of Rich's confirmation. Steve Rasmussen, the CEO of 
Nationwide Insurance, a Fortune 500 company and national leader 
in insurance and banking and mortgage products, believes Rich 
will embrace the partnerships he has built with the business 
community as leader of the CFPB.
    Rich has the bipartisan support of former Ohio Attorneys 
General, including the current one, former Republican U.S. 
Senator Mike DeWine. That he would win the praise of his former 
opponent speaks to his integrity and his professionalism.
    And, Mr. Chairman, I have letters that I would like to 
submit for the record, one signed by Mike Van Buskirk of the 
Ohio Bankers League, one signed by Steve Rasmussen, the CEO of 
Nationwide Insurance, one signed by our former colleague and 
national hero John Glenn, all of whom are supporting this fine 
public servant.
    Mr. Chairman, if for no other reason we should confirm him, 
Rich Cordray was a five-time Jeopardy champion.
    [Laughter.]
    Senator Brown. I actually tried out for Jeopardy once and I 
did not get through the first round, so----
    [Laughter.]
    Senator Brown. I am not sure what that says, but 
nonetheless, Rich Cordray is I was very excited about this 
appointment. I am very proud to introduce my friend and a 
terrific public servant in Ohio, Richard Cordray.
    Chairman Johnson. Thank you, Senator Brown.
    Mr. Cordray, I look forward to hearing your testimony. Will 
the nominee please rise and raise your right hand.
    Do you swear or affirm that the testimony you are about to 
give is the truth, the whole truth, and nothing but the truth, 
so help you God?
    Mr. Cordray. I do.
    Chairman Johnson. Do you agree to testify before any duly 
constituted committee of the Senate?
    Mr. Cordray. Yes, I do.
    Chairman Johnson. Please be seated. Please be assured that 
your written statement will be part of the record. Please also 
note that the Members of this Committee may submit written 
questions to you for the record and you should respond to these 
questions promptly in order for the Committee to advance your 
nomination.
    Mr. Cordray, if you would like, please introduce your 
family and friends who are in attendance before beginning your 
statement.

STATEMENT OF RICHARD CORDRAY, OF OHIO, TO BE DIRECTOR, CONSUMER 
                  FINANCIAL PROTECTION BUREAU

    Mr. Cordray. Thank you, Mr. Chairman. I will take you up on 
that suggestion. I am glad to have with me today, and I feel 
like I do not need to introduce them at this point because they 
have been commented upon, my wife Peggy and our twins, Danny 
and Holly, who are 12 years old and they are excited to be here 
today, in part because they missed a day of school, I think.
    I also would echo Senator Brown in thanking Mike Van 
Buskirk, the President of the Ohio Bankers League, and John 
Koslowski, the General Counsel of the Ohio Credit Union League, 
who are in the hearing room today. I thank them for their help 
and support over the past month and for the work we have done 
together over many years.
    And I also want to acknowledge, I believe that Chairman Jon 
Leibowitz of the Federal Trade Commission was here earlier and 
had to leave. Commissioner Julie Brill of the FTC is here. They 
have been tremendous partners to our bureau in helping us set 
up operations and have forged a collaborative enterprise for us 
that I think will mark the years ahead.
    There are other friends here, but I will not task the 
Committee's patience. I am grateful for their presence.
    If it is appropriate at this time, Senator, I do have an 
opening statement.
    Chairman Johnson. Yes.
    Mr. Cordray. OK. Thank you, Chairman Johnson, Ranking 
Member Shelby, and Members of the Committee. I am honored to be 
here as nominee to be the Director of the Consumer Financial 
Protection Bureau.
    I appreciate deeply the confidence that the President has 
shown in me, and I thank Professor Elizabeth Warren for her 
painstaking and thoughtful work to turn the Consumer Bureau 
from an abstract idea into what is now a tangible, vibrant 
agency.
    And I am grateful to the Committee Members for your 
courtesy to me and your advice over the past month, which I 
have welcomed and will always welcome.
    Let me briefly discuss how my background and experience may 
help inform your consideration. As was mentioned, from 
childhood, my parents taught me the value of work that seeks to 
improve the lives of others. My dad, Frank, who is now 93 years 
old, spent his entire career working with children and adults 
who have developmental disabilities. My mom, Ruth, who died of 
cancer when I was in college, was a social worker who founded 
the first foster grandparent program for the developmentally 
disabled in Ohio at the same time she was doing all the things 
that a mother does to raise three pretty rambunctious boys.
    Over the past 20 years, through my work in State and local 
government, I became deeply engaged in consumer finance issues 
and I developed a deep resolve to address these issues that I 
have found to be so basic to our communities. Working with 
troubled taxpayers, I quickly learned there is no one-size-
fits-all solution as you seek to help people who just want to 
do the right thing and, when necessary, to thwart those who 
would take advantage of others.
    On a variety of issues, I sought to find new partners, and 
we, frankly, experimented with new approaches. Seeing the 
struggles people had to make basic financial decisions, a group 
of people and I pushed our legislature successfully to pass a 
new law requiring high school students to receive personal 
finance education before they graduate. We then implemented 
that law by developing a curriculum and training hundreds of 
teachers.
    As we saw the foreclosure crisis wreaking havoc in many 
neighborhoods and I saw--this is in early 2004, 2005--I saw 
subdivisions where a dozen foreclosures would wreck the dreams 
of every resident in the subdivision, we created a ``Save Our 
Homes'' task force that brought together businesses and banks, 
nonprofits and Government, to combine their perspectives to 
assist people who were just frantic not to lose their homes.
    As State Treasurer, I continued to work on financial 
literacy issues and foreclosure prevention, now on a State 
level. I also noticed that we had a neglected low-interest 
lending program to help small businesses create jobs and to 
help farmers access affordable credit in our rural communities. 
We revived that program, sought to expand it, and reached out 
to community banks to work with them to understand how we could 
make the program accessible and usable for them. Over the time 
I was Treasurer, we pumped hundreds of millions of dollars in 
low-interest lending into our communities, especially the 
smaller towns where community banks are the economic backbone 
of those communities. All of this work reinforced for me how 
imaginative strategies can benefit both businesses and 
consumers who have many interests in common.
    Immediately before coming to the Bureau as Chief of 
Enforcement, I served as Ohio's Attorney General. In that role, 
I worked with law enforcement, police and sheriffs throughout 
the State. I represented our pension systems in the courts. And 
I enforced the State consumer protection laws. My main 
objectives in consumer protection in particular were to help 
empower people to make better informed financial decisions for 
themselves and their families and to stop the scams and frauds 
that not only cheat consumers, but also undercut law-abiding 
businesses.
    At every stage of this work, I believed and I believe today 
that law enforcement which is evenhanded, fair, and reasonable 
not only protects consumers, but it also supports what I call 
the honest businesses in two key ways. First, the businesses 
that cheat can gain a significant and unfair advantage and law 
enforcement protects the honest businesses against the 
cheaters. Second, keeping the marketplace clean is crucial to 
giving consumers the confidence they need to be encouraged to 
participate in that market.
    At the Consumer Bureau, I have found that Congress has 
given us a broad range of tools to address these issues, 
including research reports, rulemaking, enforcement, market 
guidance, and consumer education. Congress also gave us the 
critical ability to examine both large banks and nonbanks so 
that participants in the same market would be subject to the 
same rules and the same burdens and to resolve compliance 
issues, in many instances more quickly and effectively, without 
resorting to litigation.
    I am also--I have become convinced that we will find many 
opportunities to streamline regulations and disclosures. For 
example, our ``Know Before You Owe'' project is already working 
to combine the mortgage disclosure forms under overlapping 
mortgage laws in order to make the costs, risks, and 
responsibilities of a home loan clearer to consumers, but at 
the same time reducing the paperwork burden for lenders. That 
is a true win-win. I believe that we will find that same sweet 
spot as we review now the thicket of regulations that we have 
inherited from other Federal agencies.
    In closing, Chairman Johnson, Ranking Member Shelby, and 
Members of the Committee, I appreciate your consideration. If I 
were to be confirmed as the first Director of the Consumer 
Financial Protection Bureau, I can promise you that you would 
have one person who is accountable to you for how we carry out 
the laws that you, the Congress, enact, and that I will always 
be keenly interested in your thoughts about our work.
    Thank you again, and I appreciate the opportunity to answer 
any questions you may have.
    Chairman Johnson. Thank you.
    Without a Director in place, CFPB will not be able to 
exercise its examination and enforcement powers over nonbank 
financial institutions like private student lenders and credit 
bureaus. Do you agree that this authority is essential to level 
the playing field between responsible small community banks and 
their nonbank competitors?
    Mr. Cordray. I do, Senator, Mr. Chairman. I think it was 
one of the key principles that was embodied in this new law. 
And I can tell you, I remember a conversation I had with a 
community banker in Ohio--this would have been around 2007 when 
I was the State Treasurer--talking to me about the fact that 
people were coming in seeking loans that were not feasible, 
that were not sustainable loans. And when he would tell the 
customers that, he would see them go down the street to 
unlicensed, unregulated, unscrupulous lenders who would make 
those loans even though those loans were destined to fail.
    So our good community banks and credit unions for their 
pains, because of the imbalance in the market, were losing 
market share by upholding their standards. And then, of course, 
it was that imbalance and the mortgage lending that it led to 
that was so terrible, liar's loans, no document loans, people 
often on mass scale falsifying income and occupation that led 
in part to the financial crisis. And now the community banks 
have suffered the second double whammy, which is credit has 
dried up and it is very difficult for them to maintain their 
operations.
    One of the things that we absolutely will not do at the 
Bureau, at least under my leadership, is to impose further 
burdens on the community banks and credit unions, who, as I 
said, from working with them and recognizing how we had to 
overhaul programs to make them accessible to them so they could 
use them have different constraints, they have different 
abilities to comply with excessive regulations, and that is 
something that we will not do on my watch. We can exempt them. 
We can do two-tier regulation. And we can listen closely to 
their concerns, which I will do.
    Chairman Johnson. When I was home in South Dakota this past 
month, I heard a lot of concerns from small community banks and 
credit unions about the CFPB adding to the regulatory burden. 
Mr. Cordray, can you elaborate, if you are confirmed, how do 
you propose to have the CFPB address these concerns?
    Mr. Cordray. Mr. Chairman, we have heard the same concerns 
directly, and I will say that I have heard those concerns over 
and over again from the Senators on this Committee, those who 
have taken the time to meet with me. So it is impressed upon me 
how important this is for us to get this right. I will refer 
again to my own experience. I have worked closely with larger 
banks and community banks on our low-interest lending program 
where the easy, convenient way for us to have administered that 
program was to pass all the money out through the large banks. 
The harder way was to sit down and work with community banks, 
understand that they needed a form that could be filled out in 
30 minutes or less. We put it on line. That we gave them a 
decision. We promised it within 72 hours of turn-around time 
and we met that standard. And that made it possible for them to 
work with us.
    So they are a different character. They thrive on customer 
relationships. They thrive on their knowledge of the community. 
If they can have a level playing field to compete, they will do 
very well. One thing that we will not do, we do not examine 
those institutions of $10 billion in assets or less. We do not 
enforce the law against them under the new statute. We do have 
regulatory power, but again, through exemptions, through two-
tier regulation, and through listening closely to their 
concerns, which is something I did both as Treasurer and as 
Attorney General, we will be able to take account of those 
burdens and avoid heaping more difficulties on our community 
banks.
    Chairman Johnson. As we have discussed, there are a number 
of mechanisms in place to make the Director and Bureau 
accountable. As Director, what steps would you take to ensure 
accountability?
    Mr. Cordray. Mr. Chairman, there are a number of--it is 
kind of a mosaic of interlocking pieces in the law that create 
accountability for the Bureau. I can also say that from my own 
experience, the most important thing in any Federal independent 
agency is to follow the law, follow it carefully, follow it 
closely. That includes as we do rulemaking that we comply with 
the requirement that we consider costs and burdens carefully 
before we embark on any rulemaking. It means that we should be 
attentive to legislative oversight, which I have been as a 
State executive official at the State level and would be here.
    And it means that we pay close attention to audits. I have 
found that to be a very useful tool in the offices I have 
headed. Every office I came into had audit findings against it. 
In each case, we cleaned those up. At the CFPB, we will take 
our audit obligations very seriously, and I have found that an 
internal audit, make sure that the policies you have do not 
just gather dust on a shelf but they are actually lived in 
practice by the agency. That is something I commit to, as well.
    Chairman Johnson. Senator Shelby.
    Senator Shelby. Mr. Chairman, I yield to Senator Corker.
    Senator Corker. Thank you, Mr. Chairman, and thank you, 
Ranking Member.
    We have been on recess and I went to 60 events or so and I 
am a little bit shocked coming back into the Banking Committee, 
which has typically been very nonpartisan, to hear the spewing 
that I have heard from almost everyone on the other side of the 
dais. I have got to tell you, I am a little shocked by that and 
some of the half-truths, mistruths, untruths that have been 
stated.
    The fact is, the only two people that I am aware of on this 
dais that were directly involved in negotiations to create this 
consumer agency are sitting on this side of the dais. That is 
an absolute fact. The only two people that I am aware of 
sitting at this dais today that negotiated day after day after 
day to create this organization are sitting on this side of the 
dais.
    So I am a little shocked at some of the comments that have 
been made and actually disappointed at the rancor here in this 
meeting. The fact is that what we have talked about, and you 
and I talked about this in the office, is the fact that the 
only way any of this, the Oversight Council can challenge 
something that the head of this agency puts in place is if it 
threatens the stability of the financial system, which is a 
pretty big hurdle. The Chairman of this Committee compared this 
to the SEC and the FDIC and the Fed, all of which are either 
commissions or boards. Therefore, they have people who help the 
executive in prudent rulemaking.
    So I am stunned at the untruths that have been stated today 
and the partisan nature in which they have been relayed. I am 
sorry that you are caught up in all of this. I know that you 
and I talked in our office about the fact that almost all of 
this would go away if the Administration would just sit down 
and put appropriate checks and balances in place. I talked to 
Mrs. Warren about this and I talked with you about this. And I 
am wondering how those conversations went between you and the 
Administration regarding the conversation that we had and the 
possibility of actually just having some degree of check and 
balance for this new position that you hope to hold.
    Mr. Cordray. Senator--and I appreciated the opportunity to 
meet with you and hear your concerns firsthand as well as today 
at the hearing--I did convey the substance of those 
conversations back to the Administration. I have not sought to 
inject myself in legislative discussions that may be between 
the Congress and the President.
    My job at the Bureau has been, as you know, Chief of 
Enforcement, and our role there is to take the laws that 
Congress has enacted, whatever they may be, and to enforce them 
to the letter, and that is what we are trying to do. We are 
trying to do that very carefully. I think the initial Inspector 
General reports on the Bureau were good in suggesting that we 
did, in fact--in fact, finding that we did identify all of our 
required mandates under the law, that we have begun 
implementing those in a sensible way, and we have communicated 
broadly to our stakeholders and to other agencies, which goes 
in part to your question about the Financial Stability 
Oversight Council.
    We are required by law to communicate and consult with our 
fellow banking agencies. We would be a very poor example of 
Government at work if we did not take that very seriously. I 
would hope and expect that concerns that they may have about 
our work or concerns we may have about their work are things 
that we will discuss regularly, that we will work those issues 
out when we do have disagreements, as I am sure will occur from 
time to time, and it would never be necessary to actually 
invoke some sort of super process to override our rules.
    If they talk to us about their legitimate concerns that a 
rule might threaten the safety and soundness of the banking 
system, we should take that to heart. We should think very 
carefully about what we are doing and we should work toward a 
consensus. I think that is what we will do.
    Senator Corker. Would the agency, though, be not 
independent if it had a board? Would that make it not an 
independent board, or----
    Mr. Cordray. I think, Senator, that different independent 
agencies are structured in different ways. The Comptroller of 
the Currency has had a single director for 100 years and 
Congress has blessed that. FHFA has a single director. Other 
agencies do have a board. It can work both ways. But the 
Congress created us and gave us a director. We are trying to 
implement that law. It is difficult not having a director in 
place, as the Chairman mentioned, a level playing field----
    Senator Corker. Is the threshold pretty high, meaning that 
unless a rule that you create threatens the stability of the 
entire financial system, it cannot be challenged. That is a 
pretty high threshold, is it not?
    Mr. Cordray. I do not know how to evaluate that in the 
abstract. I know this provision does not apply----
    Senator Corker. Well, just--do not do it in the abstract. I 
mean, would you agree that unless you create a rule that 
destabilizes the entire financial system, that that is a pretty 
big threshold for any of the other regulators to challenge 
whatever you solely decide again?
    Mr. Cordray. Again, it is a standard that does not apply to 
any other agency in Government, solely to the Consumer Bureau. 
It is a high hurdle, but not an inappropriate one, I think, 
because we will be consulting regularly, both in the 
examination function and as they do safety and soundness 
regulation, we do consumer protection regulation. I think the 
two are largely in harmony and it will make sense for us to go 
together as we do our work. That would be my intention if I 
were the director.
    Senator Corker. Well, I do hope that we will continue to 
work on this. I still do not understand why the Administration 
will not work in some way to solve this, nor why they allowed 
this to be the lightning rod that it did not have to be when 
there was support on both sides of the aisle, large support, 
for a Consumer Protection Agency.
    But let me just move to you for one moment.
    Mr. Cordray. Sure.
    Senator Corker. First of all, I have had a very pleasant 
meeting with you and again compliment you on your family. One 
of the things we talked about in the meeting that we had in our 
office was the fact that it is not typical to have sort of a 
political activist in State party politics announced to be head 
of a national organization. Typically, you pick people who have 
had experiences in that regard. And when we--and that is not 
the case with you, and again, you seem like an outstanding 
individual in many ways.
    You had announced that you wanted to run for Governor of 
Ohio, which makes it even more odd. Typically, we do not have 
regulators come up here running agencies that can make rules 
over the entire financial system, quote, that might be able to 
make a name for themselves in doing so when their goal is to go 
back to their home State and run for Governor. You seem to 
indicate maybe that was not the case now, but I wonder if you 
would speak to that, because as you can imagine, especially in 
the way this organization has been set up, that would create 
some question marks and flags.
    Mr. Cordray. Yes, and I appreciate the opportunity to 
address that issue squarely. I did say that last year before I 
came to work at the new Consumer Bureau. I can tell you, 
Senator, I have no plans to run for any political office. I 
understand that the work of a Federal independent agency and 
law enforcement work, in particular, must be completely 
absolved of politics. The two do not mix. And that is how I 
have approached my job.
    Senator Corker. How do you feel about late fees on credit 
cards and mortgages?
    Mr. Cordray. When I was the Treasurer of Ohio, the Federal 
Reserve was first proposing some rules and regulations to curb 
some of the practices that had come up with late fees and I 
supported those changes in the rules, which eventually were 
adopted by Congress in the CARD Act, which I think was a good 
set of reforms in the credit card industry. One of the jobs of 
the Bureau will be to monitor compliance with those new laws, 
and we had a conference early this year at which we found, 
interestingly, that compliance was pretty good with the new 
laws and that it had not restricted credit and did not seem to 
be raising the price of credit for people and so those seemed 
to be sound and sensible reforms that Congress had adopted.
    Senator Corker. So you are not concerned about people who 
pay their bills on time having fees higher because of people 
who do not pay their bills on time, and while you are answering 
that, just strategic defaults in general. I mean, we are 
creating an environment, it appears to me, in this country 
where we are encouraging people on economic grounds, self-
interest grounds, to default. I mean, we have actually agencies 
of Government that now are encouraging that. Do any of those 
kinds of things concern you, as especially someone who is going 
to be in major ways overseeing big parts of this?
    Mr. Cordray. They do, Senator, and I think that is part of 
the balance that has to be drawn with any of these types of 
regulations. I am somebody who--I have credit cards. I try to 
pay those balances very diligently on time. I do not want to 
pay any additional fees beyond what I have to. I do not want to 
be billed for the problems of others. I also think that the 
credit card practices, as they were reformed by the CARD Act, 
have been good reforms. I think Congress acted wisely there, 
and we will be attempting to ensure that that law is being 
followed as Congress enacted it. So I guess that is my attitude 
toward the issue.
    Senator Corker. The Chairman has been very generous. I 
thank you, and I might stay for a second round. Thank you.
    And thank you for your testimony and thank you for bringing 
your family.
    Mr. Cordray. Thank you, Senator.
    Chairman Johnson. Senator Reed.
    Senator Reed. Well, thank you very much, Mr. Chairman, and 
thank you for your willingness to serve, Mr. Cordray, in a very 
difficult time and in a very challenging office.
    You also served as the State Treasurer in Ohio. That is 
correct?
    Mr. Cordray. I did, yes.
    Senator Reed. And so you come to this job with multiple 
skills. One is as an Attorney General who had to go out and 
protect people, but, two, as essentially the chief financial 
manager for the State of Ohio. And so suffice it to say--and 
you can elaborate--you are certainly, I think, aware of and not 
only aware of but sensitive to some of the legitimate concerns 
of the banking industry about the predictability, about the 
soundness of financial institutions, about the needs that they 
have. Is that fair to say?
    Mr. Cordray. I think I am, Senator. As you mentioned, I was 
both a State and a county treasurer. It was a AAA-rated county, 
which is an unusual thing in American local government 
finances. But most notable perhaps is my tenure as Treasurer at 
the State was the time leading up to the financial crisis. It 
was 2007-08. It was one of the most difficult times to try to 
manage and safeguard public funds that I think we have seen in 
my lifetime. We were very careful and conservative about how we 
invested the public's money, how we safeguarded that money. We 
suffered no losses when I was the State Treasurer in any of our 
funds, including our local government fund, which was not true 
of a number of States around the country. I am very proud of 
that.
    But I also think that work gave me a very close working 
relationship with banks in Ohio because they partnered with us 
in a lot of the work we did to manage the State's finances, 
both as custodians of pension funds and in terms of debt 
management and debt issuance and the like, both large and small 
banks. So it gave me a good working sense of their operations, 
of their concerns. I created a Banking Advisory Council when I 
was State Treasurer and carried forward the same approach as 
Attorney General. So we would meet regularly, I would hear 
their concerns, and they would talk to me about whatever issues 
were on their mind. I think that is the accessibility I have 
tried to foster, and I would bring that to the Bureau.
    But I do have that background, and I think it is part of 
what maybe would be kept in mind in assessing my 
qualifications.
    Senator Reed. One office within your proposed purview is 
the Office of Servicemember Affairs, led now by Holly Petraeus. 
Can you comment upon your view of its importance? Many of us 
here think it is critical because these are employees of the 
Federal Government and they are usually far from their homes, 
and their ability to connect with a local Attorney General or a 
State's attorney is limited. And, you know, this goes back 
about 35-plus years. I can recall how they were victims of many 
consumer frauds, and now I am hearing because of the Internet 
it is even worse and even more difficult for local authorities 
to deal with it. But now we have a Federal office so you might 
comment on that.
    Mr. Cordray. Thank you, Senator. I had some awareness of 
these issues. When I was Ohio Attorney General, we had a pro 
bono group that provided legal advice to soldiers, 
servicemembers who were being deployed, often on short notice, 
and to their families. But I will say that since coming to the 
Bureau, I have learned a lot, and I expect to continue to learn 
a lot. And part of what I have learned has been from Mrs. 
Petraeus, who, as you say, is an outstanding colleague of mine 
and heads our Office of Servicemember Affairs. She has taught 
us all, I think, about the special needs of servicemembers, how 
deployments and even forced transfers within this country 
create hardships for their families. She herself talks about 
how she and her husband have moved--I think she said--23 times 
in 36 years over the course of his long and distinguished 
career. But also the fact that they are now finding that if you 
have consumer finance issues as a citizen, they are bad enough, 
they are tough enough. You might face bankruptcy or 
foreclosure. As a servicemember, you can lose your security 
clearance. You may not be able to continue to do the job you 
are trained for. That is not good for the servicemember, it is 
not good for the military, it is not good for the country. So 
these are very serious issues, and she continues to bring them 
to our attention.
    Recently, she and I met with the JAG Corps of all branches 
of the service to begin to coordinate on enforcing the law to 
protect servicemembers and the special needs around military 
bases, which are a magnet for a lot of financial predators. And 
so this is something we are excited about. It is something we 
hope to be able to deliver for those servicemembers, that 
someone will stand on their side. And I hope that that will be 
one of the marked successes of the new Bureau.
    Senator Reed. Thank you very much.
    Thank you, Mr. Chairman.
    Chairman Johnson. Senator Shelby.
    Senator Shelby. I have no questions. I do have an 
observation. I enjoyed talking with you when you visited me in 
the office. I am sure that you have a good background. You have 
got a fine family. I do like those smiles, like all of us do.
    Mr. Cordray. Thank you.
    Senator Shelby. But you are caught between a big 
substantive debate here, as you well know, and that is going to 
have to be resolved, I think, before we move this nomination 
farther. I discussed that with you in the office, and I think 
Senator Corker did, too.
    Mr. Cordray. Yes.
    Senator Shelby. But I want to join Senator Corker. Just for 
the record, Mr. Chairman, Senator Corker and I were very 
involved in the banking legislation. We had advocated a 
consumer agency. But we wanted accountability with it, and we 
still do.
    Thank you, Mr. Chairman.
    Chairman Johnson. Senator Brown.
    Senator Brown. Thank you, Mr. Chairman. I appreciate 
Senator Shelby's comments, because that is really the point, 
that during this whole process, Senator Corker, Senator Shelby, 
Senator Dodd, and others were in the midst of a negotiation to 
work out legislation. That is what we do around here. Many, 
many elements of the consumer part of the bill in Title X, 
especially, I know, Senator Corker, that you worked with 
Elizabeth Warren on, were done with major concessions on both 
sides. There were some things in that bill--Senator Shelby 
supported an amendment I had that the largest banks were, in 
fact, too large and we should find a way to do something about 
those six largest banks. He and I tried on the Senate floor. We 
lost. We had----
    Senator Shelby. They were too big to exist.
    Senator Brown. Yes. And so, you know, that is what happens 
here. You win some, you lose some. But I guess I am puzzled by 
Senator Corker's comments about excessive partisanship here 
because, you know, we wrote this bill, it passed with some 
number of Republican votes. It got over 60 votes. But there was 
certainly consistent and frequent Republican input, much of 
which was accepted in this bill. I understand in the end you 
did not vote for the legislation, but it passed both Houses. It 
was signed by the President. And I go back to what the Senate 
historian told me, that never have we seen in this Senate a 
party say no to confirming--putting people in place to run an 
agency because the one party, a minority party, a large 
minority, is opposed to parts of the law, so we are going to 
just take our ball and go home and then call it partisanship. I 
do not really--I just do not quite understand that.
    I think in the end, the question is: Is Richard Cordray 
qualified for this position? And I do not think anybody has 
made the case that he is not, and most of us have made the case 
that he is. And it is a pretty strong case.
    So, you know, I hear sort of the unaccountability question, 
that one Senator said this is unaccountable consumer protection 
czar. And I want to run through and then get your comments--and 
I will speak for a couple of minutes walking through this--what 
I think the bill does about the so-called unaccountable 
rulemaking process. I will give just a couple of examples on 
each.
    Before proposing the law, if there is a consumer disclosure 
involved, the Paperwork Reduction Act requires you to seek the 
review and clearance of OMB. You must consider the potential 
benefits and costs to consumers and financial services 
provides, consult with banking regulators and other Federal 
agencies regarding the rules. This is all before proposing the 
role. If there is a significant economic impact, you must 
follow the Small Business Regulatory Enforcement Fairness Act. 
You must under the Regulatory Flexibility Act prepare an 
initial regulatory flexibility analysis.
    When proposing the role, the way I read the law, you must 
give public notice of proposed rules, offer the public the 
opportunity to comment under the Administrative Procedures Act, 
consult with the appropriate banking agencies, pursuant to the 
Regulatory Flexibility Act conduct a final regulatory 
flexibility analysis.
    After the rule has been finalized--again, this is all--this 
does not sound unaccountable to me, but after the rule has been 
finalized, if any member of the Financial Stability Oversight 
Council objects to a regulation, they can petition--the member 
agency that objects can petition the FSOC to get it removed. 
They can stay or set aside any regulation passed. Pursuant to 
the Congressional Review Act, submit a report to the House, the 
Senate, and the GAO. Under Dodd-Frank, it requires the CFPB to 
review each with significant rules or orders within 5 years of 
enactment to address the rule's effectiveness.
    Is your understanding similar to that of the whole process 
of accountability, the statutory requirements that you would 
face as Director to issue a rule? And I will ask a couple other 
questions and answer it generally if you would. Does a private 
party have an opportunity to challenge one of your regulations 
in court? What recourse ultimately does the President have? Can 
the President remove a runaway Director because he or she is 
unhappy with the Director's ideology or direction or rulemaking 
or whatever? And are these checks similar to those that apply 
to other agencies? I would like you to sort of spell that out 
for us.
    Mr. Cordray. All right. That was several questions, 
Senator. I will do my best to address them.
    First of all, as with any independent agency, the 
leadership of the Consumer Bureau, as with every other agency, 
is not subject to direct removal by the President, as are 
Cabinet departments. My understanding is Congress sets up 
agencies in that manner in order to keep those agencies close 
to Congress. Our job is to carry out the laws enacted by 
Congress, and we are subject to your oversight in doing so.
    The long list of restrictions and/or process guidance that 
you laid out in terms of rulemaking by the Bureau I believe was 
pretty comprehensive. I was trying to take notes as you went.
    I would also say that for us in particular, one thing I 
want to emphasize is I think we have a real opportunity here 
inheriting many regulations from other agencies that we did not 
help to write, and that in the aggregate may have created undue 
burdens, particularly as there was sort of a fever for 
disclosure over the last 30 years, and it got to the point 
where often the disclosures were so long and confusing that 
they did not really help consumers but they certainly imposed 
burdens on lenders. There is an opportunity to try to 
streamline that and cut that back, and that is something that 
will be a priority for me if I am the Director of this Bureau.
    We also are subject to oversight, you asked, by the courts. 
The D.C. Circuit Court of Appeals recently rendered a pretty, I 
would say, tough decision on rulemaking by Federal agencies in 
terms of making sure that the agencies do a careful cost/
benefit assessment of any rule and that they not simply reach a 
conclusion and then rationalize it after the fact. That is 
something we will take to heart in the work we do at the 
agency.
    But there are a number of checks that are similar to those 
of other agencies, and there are some checks on the Bureau that 
were imposed in the law that, in addition, are new compared to 
other agencies. But we will live with them all. Our job is to 
carry out the laws enacted by Congress, and we intend to do 
that to the letter.
    Chairman Johnson. Senator Schumer.
    Senator Schumer. Thank you, Mr. Chairman, and thank you, 
Mr. Cordray.
    As you may know, my interest in this agency--I was one of 
the original sponsors--came about after 10 years of trying to 
get very simple legislation, credit card disclosure 
legislation, or get the Fed actually to require that there be 
disclosure of what credit card interest rates are, and I just 
got basic ``they are busy with other things'' kind of thing. 
That is why I feel this agency is necessary. None of the other 
agencies put the consumer at the top of the list. It is not 
their mission. The Fed's is safety and soundness. And so an 
independent agency had a great deal of appeal to me, and that 
is why I was a strong advocate of it. It is an agency designed 
to finally put consumers first. It is under attack even before 
it is fully on its feet. And I do not want to go back to the 
old days where we go to the Fed or some other agency and say 
the consumer needs this reasonable protection. What I was 
asking with credit cards--we have gone beyond that now--is 
simple Adam Smith disclosure. No one knew what the interest 
rates were when they signed up for credit cards, and the Fed's 
interest was, to put it kindly, sporadic. And I like the Fed in 
general--but not on this area. They were not very good.
    And so here we have an attack that is sort of not in the 
ordinary. It is extraordinary, where two sides make their 
arguments, seek support from their colleagues, and put it to a 
vote. That is the ordinary. We fought those battles last year. 
Consumers won, I think in part because many people experienced 
what I did.
    But now that consumer protection has become the law of the 
land with its own agency to guard it, some of our colleagues 
want to reopen last year's debate. Because they could not win 
it through the ordinary legislative process, they have promised 
to block this nomination or any nomination until they get their 
way. It is hijacking the legislative process. You have a 
legislative battle, you lose, and then you say, ``I am not 
going to appoint anybody because I lost the legislative 
battle.'' It is not how things should work around here.
    So let us ask this question, which is a fair question: If 
this nominee loses, who wins? Well, consumers do not win. Many 
of the abuses we saw leading up to the financial crisis will be 
allowed to continue, and the new cop on the beat for consumers 
will be forced to stand down.
    Seniors do not win. They are going to remain vulnerable to 
predatory reverse mortgages, and the CFPB will have to fight 
with one hand tied behind its back to protect them.
    Servicemembers do not win. They will remain at the mercy of 
private lenders and debt collectors, and the CFPB will not be 
there to help.
    And banks that play by the rules do not win. They will be 
forced to compete with unscrupulous lenders, unregulated 
mortgage servicers. All the kinds of people who created a good 
part of this financial crisis because they were unregulated 
will remain unregulated while many of the banking institutions 
that are regulated will still be abiding by the rules. No doubt 
that is why the Ohio Bankers League supports your confirmation.
    So, in short, without a Director the CFPB has the least 
authority where it needs it the most. We should not relitigate 
the existence of the CFPB. We should be here to debate the 
qualifications of Mr. Cordray to lead the CFPB, a question that 
I think would be answered easily in the affirmative. So I am 
going to ask you a few quick questions.
    First, now Senator Shelby has met with you. He has said 
that, and that is to his credit. But how many of the other 43 
who signed the letter saying they would block your nomination 
actually met with you or asked you questions before they sent 
the letter?
    Mr. Cordray. Well, Senator, I was not a nominee at that 
time so I do not know that they would have known to seek me out 
to ask me any questions then.
    Senator Schumer. How about subsequently? Anybody?
    Mr. Cordray. Since I was nominated, we have made an effort 
to meet with each Member of the Banking Committee. I have not 
reached out extensively beyond the Banking Committee at this 
point, although I hope to do so in the near future.
    Senator Schumer. How many meetings did you get?
    Mr. Cordray. I got a number of meetings.
    Senator Schumer. Thanks. OK.
    I read a little bit about your background this morning, 
learned you got your first job at McDonald's. What did you do? 
And how much did you earn?
    [Laughter.]
    Mr. Cordray. I was a hamburger flipper, although it seemed 
like the manager always nominated me to clean the parking lot 
whenever it rained.
    Senator Schumer. I hope you used different tools for each 
job.
    [Laughter.]
    Senator Schumer. And how does a kid from Grove City, Ohio, 
who worked at McDonald's end up earning scholarships to 
Michigan State, Oxford University, and the University of 
Chicago Law School?
    Mr. Cordray. I worked hard in school, I had some really 
terrific teachers, and I think I was fortunate.
    Senator Schumer. And, finally, last question. What has it 
meant to you that Mike DeWine, who defeated you for Attorney 
General last year in the election, supports your confirmation?
    Mr. Cordray. Attorney General DeWine and I have attained a 
friendly relationship in the aftermath of what was a tough 
election. I think that is to his credit. I hope it is to my 
credit. And I have appreciated what he has had to say about me 
very much.
    Senator Schumer. OK. Well, let me conclude because my time 
is up.
    Mr. Chairman, in my opinion, Mr. Cordray's background and 
his experience show that he is the epitome of a public servant, 
and it will not only be bad for consumers if his nomination is 
hijacked. It will be bad for the country if he continues to be 
treated as a pawn in a cynical Washington game. So I hope you 
are here, and I hope my colleagues will change their mind, 
having met you and seen the quality that you show as a nominee.
    Mr. Cordray. Thank you.
    Senator Schumer. Thank you, Mr. Chairman.
    Chairman Johnson. Senator Menendez.
    Senator Menendez. Well, thank you, Mr. Chairman.
    Mr. Attorney General, in my estimation you seem to have a 
strong record on consumer protection issues, and you have been 
endorsed by several consumer advocates, but you have also been 
endorsed by Ohio businesses and bankers as well. Is that not 
fair to say?
    Mr. Cordray. I have been, yes, Senator.
    Senator Menendez. Now, as a matter of fact, Mr. Michael Van 
Buskirk I hope I am pronouncing his name well--who is the CEO 
of the Ohio Bankers League, wrote a letter of endorsement on 
your behalf, saying, ``While I retain reservations about the 
CFPB's structure, I believe Mr. Cordray would be an able 
Director. I know him to be very bright, ethical, committed to 
the public good. And while he and I have differed on specific 
policy decisions, you should know the consistency in his 
process to reach those decisions. He has welcomed competing 
ideas. Moreover, he has systematically reached out to encourage 
a steady flow of information that might bring him better 
insight.''
    So, in other words, while Mr. Van Buskirk may have 
reservations about the agency and may even disagree with you on 
some policy matters, he has still recognized your 
qualifications to lead the CFPB. Is that not correct?
    Mr. Cordray. Well, I do not want to speak for anyone else, 
Senator, but I will say of my relationship with the Ohio 
Bankers League I have always been open to hearing from them 
about their concerns, and I think that listening to those 
concerns made me do a better job as State Treasurer and as 
State Attorney General.
    Senator Menendez. Well, I appreciate your modesty, but 
couldn't you deduct from that letter that, in fact, there is an 
endorsement of your capability to do the job even if there may 
be disagreement about what the agency is about?
    Mr. Cordray. I think that they have come to respect my 
public service and understand that I try to be honest and 
straightforward and do the right thing. Sometimes it is 
difficult to know what the right thing is, but by getting broad 
advice and input from a lot of sources, including the bankers 
and businesses that I work with, I have found that it makes for 
better decision making.
    Senator Menendez. Let me ask you this: Have any of my 
colleagues on the other side of the aisle, to your knowledge, 
called into question your qualifications for this position?
    Mr. Cordray. I do not know of that, Senator.
    Senator Menendez. In your meetings with my colleagues on 
the other side of the aisle, has anyone called into question 
your qualifications?
    Mr. Cordray. We have had good, cordial meetings in which 
people--we had a frank exchange of views, and I tried to listen 
carefully to what was said to all the Senators, and I hope I 
will always have that--develop that reputation, and I think it 
will make my job easier and make my work better if I am 
listening closely to what you all have to say.
    Senator Menendez. Let me try again. Anyone say to you, 
``Mr. Cordray, I have problems with your qualifications to do 
this job''?
    Mr. Cordray. They have not.
    Senator Menendez. All right. Thank you.
    So let me ask you, I understand my colleague Senator Brown 
has gone through all the checks and balances that some believe 
do not exist, but, in fact, there is a large number of them. 
But let me ask you this: Isn't it true--or maybe you can 
enlighten me if I am wrong about this--that without a Director 
the Consumer Financial Protection Bureau does have supervisory 
authority over large banks and the ability to enforce existing 
banking laws, but it will not have supervisory authority for 
nonbank financial service providers such as payday lenders?
    Mr. Cordray. Senator, it is one of the unfortunate 
difficulties of the current situation, that without a confirmed 
Director the Bureau, it is widely agreed, has inherited full 
powers over the large banks, but there is considerable 
difficulty about what powers we have over some of the nonbank 
entities that are competing in the same market with them. And I 
am haunted by that conversation I mentioned earlier with an 
Ohio community banker in 2007 where they talked about what it 
meant for them that only part of the market was being regulated 
and they were consistently losing market share to the 
unscrupulous, unlicensed, unregulated lenders who did not play 
by the same rules and did not meet the same standards. And that 
is something I would hope we would not repeat.
    Senator Menendez. So, in other words, there will be an 
uneven and unbalanced playing field where community banks have 
to abide by the rules but their competitors, like private 
student loan lenders and payday lenders, will not have to?
    Mr. Cordray. That is the unfortunate difficulty of the 
current situation. We are hampered in that other authority, 
yes.
    Senator Menendez. It would certainly seem to me that 
community banks would think that is highly unfair.
    Furthermore, without a Director the Bureau cannot protect 
students from exploitative student loans, protect seniors from 
deceptive financial products marketed by nonbanks, and protect 
our troops from deceptive products by nonbank lenders. How is 
that fair for those banks that play by the rules and yet could 
lose business to competitors who do not have to play by the 
same set of rules?
    Mr. Cordray. I think it is not fair and it is not wise as a 
regulatory approach. I talked in my opening statement about law 
enforcement that is evenhanded, fair, and reasonable. By 
putting people under the same rules they can compete, and the 
good consumer-facing businesses that base their business on 
customer service and customer delivery, like our good community 
banks and credit unions, I think will prosper.
    Senator Menendez. Thank you, Mr. Chairman.
    Chairman Johnson. Thank you, Mr. Cordray, for your 
testimony today and for your willingness to serve our Nation.
    I ask that all Members of the Committee submit any 
questions for the record by close of business on Friday, 
September 9, and, Mr. Cordray, please promptly submit your 
answers to these questions in order for the Committee to 
advance your nomination.
    This hearing is adjourned.
    [Whereupon, at 4:49 p.m., the hearing was adjourned.]
    [Prepared statements and additional material supplied for 
the record follow:]

               PREPARED STATEMENT OF CHAIRMAN TIM JOHNSON

    On our next panel, we will consider the nomination of Richard 
Cordray to be the first Director of the Consumer Financial Protection 
Bureau.
    Mr. Cordray, welcome to the Senate Banking Committee and a warm 
welcome to your family and friends who are here this afternoon.
    The CFPB was born out of the failure by prudential regulators to 
hold financial companies accountable for complying with consumer 
protection laws. Congress created the CFPB to be a robust and 
independent agency focused on protecting consumers, like military 
families and older Americans, from abusive financial products. The CFPB 
was also created to streamline disclosures so consumers can make the 
best financial choices for themselves and their families. In fact, one 
of the CFPB's first projects is to simplify the long, confusing 
mortgage disclosure forms.
    The CFPB is an agency that the American people want. A recent 
bipartisan survey shows that Americans strongly support the creation of 
the CFPB.
    The Director of the CFPB will play an important role in maintaining 
the agency's independence, promoting an equitable and transparent 
consumer financial market place and exercising enforcement of consumer 
protection laws.
    On July 18, President Obama nominated Mr. Cordray to be the first 
ever Director of the CFPB.
    The purpose of today's hearing should be to consider whether Mr. 
Cordray is qualified for that job. Instead, a vocal minority is playing 
games with the process and holding Mr. Cordray's nomination hostage. 
This political gamesmanship is preventing Americans from receiving the 
consumer protections they deserve and putting community banks and 
credit unions at a competitive disadvantage to nonbank financial 
companies.
    This vocal minority insists on rehashing the same debate Congress 
had last year when it created the CFPB as an accountable yet 
independent regulator.
    The fact is that every regulatory agency is structured with 
different features that make it accountable. Each agency has a unique 
combination that fits its mission and independence. Last year, Congress 
decided on a structure for the CFPB which borrows some accountability 
features from other regulators, but also includes several new features 
unique to the consumer agency.
    The chart on display lists many of the ways the CFPB is 
accountable, for example:

    The Financial Stability Oversight Council has the power to 
        overturn CFPB regulations;

    By law, the CFPB's budget is capped; and

    The President has the power to fire the CFPB Director.

    So the misleading claim of no CFPB accountability--drummed up by 
special interests and put forth by a vocal minority--should be exposed 
for what it is: an attempt to destroy the Bureau's ability to do its 
job of protecting American consumers.
    I would remind my colleagues that in 2008 a bipartisan Senate, 
including Members on both sides of the aisle sitting here today, helped 
to create the Federal Housing Finance Administration. FHFA is also an 
independent agency, headed by a sole Director, subject to a GAO audit 
and purposely not subject to the Congressional appropriations process.
    Now let's talk about what the focus of a nomination hearing should 
be: the nominee. Richard Cordray has spent his career in public service 
caring about people. He has taken the time to understand and come up 
with the best, most practical solutions for their problems.
    Mr. Cordray supports small business and honest companies. He has 
been a member of his local chamber of commerce for 22 years. He 
believes in leveling the playing field so that small companies can 
compete fairly and that playing by the rules is good for business. Ask 
unanimous consent to include several letters of endorsement into the 
hearing record.
    Mr. Cordray also believes that people and corporations must be 
responsible for their own behavior and if they act responsibly they 
should get a fair shake.
    It is my hope that, if confirmed, Mr. Cordray will use his 
knowledge and experience as a law enforcement official and public 
servant to better protect American consumers and to enhance the quality 
of our consumer financial markets.
    We have seen many important nominations blocked in the Senate and 
denied an up-and-down vote on confirmation. The stability of our 
financial system, and of our economy, is simply too important to be put 
at risk by political games. It's time to allow the CFPB to do its job 
to the fullest extent of its authority with a Senate-confirmed Director 
in place.
                                 ______
                                 
            PREPARED STATEMENT OF SENATOR RICHARD C. SHELBY

    Thank you, Mr. Chairman.
    I don't think it will surprise anyone to hear that we believe that 
today's hearing is premature. We do not believe that the Committee 
should consider any nominee to be the Director of the Bureau of 
Consumer Financial Protection until reforms are adopted to make the 
Bureau accountable to the American people.
    Earlier this year, 43 of my Senate colleagues and I sent a letter 
to President Obama expressing our serious concerns about the Bureau's 
lack of accountability. We also proposed three reasonable reforms to 
the structure of the Bureau.
    We had hoped to work with the majority to address this issue before 
the President nominated a Director. Unfortunately, neither the 
President nor the majority has made any effort to work with us to 
improve the accountability of the Bureau. Instead, the President has 
nominated Mr. Cordray to be the first Director.
    It is regrettable that the President and the majority have chosen 
to ignore our request rather than work with us to improve the Bureau's 
accountability. It may be good politics for them, but it is certainly 
bad policy for the American people.
    One of our Nation's founding principles is that the Government 
should be accountable to the people. Yet, the majority structured the 
Bureau to grant its Director unprecedented authority over the lives of 
the American people without any effective checks.
    All of the Bureau's power is concentrated in the hands of its 
Director. The Director determines which rules are enacted and which 
enforcement actions are brought. The Director makes all hiring 
decisions and decides how the agency spends its resources. Because of 
the expansive jurisdiction of the Bureau, every American will be 
affected by the Director's decisions. The Director will single-handedly 
determine the financial products consumers can buy, as well as which 
consumers have access to credit, and which do not. Accordingly, the 
Director's decisions will impact whether Americans can buy a home, a 
car or even basic household goods. It is staggering the amount of 
control the Director will exert over the daily financial choices 
available to Americans.
    Despite having such broad powers, however, there is no meaningful 
check on the Director's authority. The Director cannot be removed 
except on extremely limited grounds of inefficiency, malfeasance, or 
neglect of duty. In other words, the Director cannot be removed for 
poor policy choices. In addition, bank regulators do not have a 
meaningful ability to ensure that the Director's actions do not 
needlessly undermine the safety-and-soundness of our banks. While some 
claim that the Financial Stability Oversight Council could overrule the 
Director, this so-called check is simply illusory. The requirements 
needed for the Council to act are so onerous that in practice the 
Council will never be able to exercise this authority. That shouldn't 
surprise anyone, it is the way it was designed.
    For example, the Director of the Bureau sits on the Council and 
will vote to determine whether or not the Council should overturn one 
of his decisions. It is not hard to guess how the Director will vote. 
As a result, the Director will be virtually free of any constraints on 
his authority during his 5-year term.
    No one person should have so much unfettered power over the 
American people. It blatantly violates the spirit of our democratic 
system of Government. Our pursuit of better consumer protections should 
not require us to compromise our basic Constitutional values. This 
should be something on which we can all agree.
    Moreover, the principle involved will have real consequences. 
Unless the Bureau is reformed, it is only a matter of time before this 
concentration of power is abused or misused to the detriment of 
American consumers and the economy.
    The jobs figures we have seen over the summer demonstrate how the 
Administration's heavy-handed regulatory agenda is crippling the 
economy with unnecessary costs and legal uncertainty. There could not 
be a worse time to give an unelected and unaccountable bureaucrat a 
blank check to impose even more ill-considered rules that could further 
undermine our weak economy. At a time when our Nation's unemployment 
rate is over 9 percent, this would be a very dangerous gamble.
    In closing, the Chairman today has attempted to turn the phrase 
``vocal minority'' into a pejorative. Over the years, however, Senators 
from both parties have agreed upon rules governing this chamber that 
are designed to protect the rights of the minority. The requests made 
by this particular vocal minority seek only to preserve the system of 
checks and balances embodied in the Constitution--that is not what I 
would call a radical undertaking.
    Thank you, Mr. Chairman.
                                 ______
                                 
             PREPARED STATEMENT OF SENATOR DANIEL K. AKAKA

    Mr. Chairman, I am very proud to join you in welcoming a 
distinguished constituent and a long-time friend of mine and her 
family. Ms. Patricia Loui has been nominated by President Obama to 
serve as a Member of the Board of Directors of the Export-Import Bank 
of the United States.
    As an accomplished international businesswoman who brings a wealth 
of experience in banking, business, and economic development, she is an 
excellent nominee for the Ex-Im Bank. I am pleased to join Senator 
Inouye in introducing her to the Committee.
    This is an exciting and challenging time for the Ex-Im Bank. It 
helps to create and maintain U.S. jobs by filling gaps in private 
export financing at no cost to American taxpayers. It just set a new 
all-time record for export finance authorizations. It had loans of over 
$24.5 billion at the beginning of August at a time when credit has been 
tight.
    It is providing opportunities for U.S. businesses to contribute to 
our Nation's international economic competitiveness at a time when the 
Nation is struggling to recover from the recession. It helps the small 
businesses that have always been the engine of our economy, the workers 
who are still seeking employment, and the families and communities that 
they support.
    During this exciting and challenging time for the Ex-Im Bank, Ms. 
Loui is the right nominee to join the Board.
    Under Ms. Loui's leadership over the past 30 years, her company, 
OmniTrak, has become a leading research and planning firm in Hawaii.
    It is recognized for its expertise and work in Asian markets in 
tourism, finance, health, communications, telecom, retail, Government, 
real estate, and land development. Ms. Loui previously served as 
President of the East West Center Association, as Vice President of the 
Bank of Hawaii, and as a development planner for the United Nations 
Development Programme and UNESCO in Asia. And of course, her work in 
the community--which includes being a member of the APEC host committee 
for the Leaders meeting in Honolulu in November--has been invaluable.
    In short, Ms. Loui has developed an expertise in business that 
perfectly aligns with her soon-to-be new role on the Ex-Im Bank. With 
her passion for business and drive for success, I have every confidence 
that she will make tremendous contributions to the bank.
    But her qualifications for this appointment goes beyond her 
impressive education, resume, and extensive experience. The 
entrepreneurial spirit runs in the family.
    Not only is OmniTrak Hawaii's largest market research firm, Pat's 
parents, brothers and sisters, and in-laws have all run business 
ventures ranging from restaurants, marine design and engineering, 
insurance, flowers, and furniture. And, according to family members, it 
is no surprise that business runs in the family--the matriarch and 
patriarch of the Loui family met because of business.
    Four generations ago, Shizuko Katashima owned a large market in 
Kapahulu, which she sold to Alicia Loui. Shizuko's daughter Alyce met 
and married Alicia's son Fred. And family and island history was made.
    Ms. Loui, please accept my congratulations on your nomination. 
Mahalo--thank you--for your dedication to public service.
                                 ______
                                 
                 PREPARED STATEMENT OF PATRICIA M. LOUI

 To Be a Member, Board of Directors, Export-Import Bank of the United 
                                 States
                           September 6, 2011

    Chairman Johnson, Senator Shelby, and distinguished Members of the 
Committee, thank you for the honor of appearing before you as a nominee 
for the Board of Directors of the Export-Import Bank of the United 
States. I am deeply grateful to President Obama for nominating me. May 
I also warmly thank Senator Inouye and Senator Akaka for their generous 
support.
    I would especially like to thank my husband, Michael Schmicker, and 
son, Christopher Schmicker, and other family kindly attending: Steven 
Loui, Kathleen Loui-Yasui, Kristyn Yasui, John and Annette Schmuecker. 
Though not here, thank you to my mother, Alyce, and late father, Fred, 
for their unconditional support.
    I feel that my professional career in small business, banking, and 
international development helps qualify me to make meaningful 
contributions to Ex-Im's programs, and, if confirmed, I will work 
diligently to help Ex-Im create and preserve US jobs. As a woman-owned 
small business, our company has introduced Midwestern manufacturers to 
new markets in East Asia, assisted an American entertainment 
corporation explore expansion from China to India, and helped U.S. 
farmers increase market penetration in Southeast Asia. Born into a 
small business family, I learned at the dinner table and then as an 
entrepreneur the challenges small businesses face when working capital 
financing dries up, as it did in 1998 and 2008. This gives me a 
visceral commitment to Ex-Im's Congressional mandate on small business.
    If confirmed, I look forward to contributing to American export 
growth, particularly to Asia. Fifty-five percent of world population 
and almost 40 percent of current global GDP is there, as are 3 of 9 Ex-
Im target countries representing 1.5 billion people: India, Indonesia, 
and Vietnam. Whether at home or as tourists to the U.S., Asians look 
with hope and optimism to the United States and express strong interest 
in buying American products. U.S. exports in infrastructure, energy, 
medical equipment, transportation, and brand name durables have 
tremendous export potential in this fastest growing region. My cross 
cultural training at the East West Center, development work with the 
United Nations, and 30 years in international marketing, positions me 
to contribute to the promotion of Ex-Im services in the culturally 
diverse countries where it is open for business.
    Besides increasing foreign market demand, it is important to grow 
domestic awareness of Ex-Im's services as only 1 percent of American 
companies export. As a former regional banker, I am especially 
interested in promoting Ex-Im's services to community and regional 
banks and small businesses. I understand both the benefits and risks of 
lending given my career as banker and businesswoman. By continuing 
sound financial practices and basing credit decisions on reasonable 
assurance of repayment, Ex-Im can remain financially self-sustaining 
while fulfilling its jobs mandate--a core covenant between Congress, 
Ex-Im, and the American people that I am committed to uphold.
    Even as our economy recovers, Ex-Im can, I believe, be mutually 
beneficial for private enterprises, for labor and management, and for 
your constituents across our Nation. Ex-Im's authority to lend, 
guarantee and insure benefits diverse stakeholders. By mitigating 
credit risk and providing competitive terms, Ex-Im encourages banks 
both small and large to finance exports. Businesses sell American 
products more competitively by offering financing, and a robust, 
exporting economy creates jobs for American workers and benefits for 
local communities.
    This is why I respectfully ask for your support to serve on the 
Board of Directors of Ex-Im. If confirmed, it would be an honor to give 
back to our country that has enabled my grandparents, my parents, and 
me to build successful careers and families around small business.
    Thank you for the opportunity to appear before you. I look forward 
to answering your questions.
                                 ______
                                 
                 PREPARED STATEMENT OF LARRY W. WALTHER

 To Be a Member, Board of Directors, Export-Import Bank of the United 
                                 States
                           September 6, 2011

    Thank you very much Chairman Johnson, Senator Shelby, and Members 
of the Committee. It is a great honor for me to be here today as a 
nominee to the Board of the Export-Import Bank of the United States. I 
am deeply grateful to President Obama for my nomination and to Senator 
McConnell for his recommendation and support.
    I would also like to acknowledge the support of Senators John 
Boozman and Mark Pryor of Arkansas, two men I have known for many years 
and for whom I have great respect.
    If I may, I would like to take this opportunity to acknowledge my 
wife of 41 years and my best friend Janice. Also here is my son Bill, 
an engineer for the Department of Defense in Pine Bluff, Arkansas. I am 
sorry that Bill's wife Tammy, a high school teacher, ultra marathoner, 
and the mother of two of our grandchildren could not be here. My 
daughter Mandy, a homemaker and the mother of five of our grandchildren 
and her husband Dr. Justin Carswell, a dean at the College of the 
Ozarks in Missouri also could not be here today. I appreciate each of 
them for the support they have always provided.
    I consider myself extremely fortunate to be here with you today. 
Early in my career, I entered the private sector with Southwestern Bell 
Telephone Company where I rose from an entry-level position as a 
switching engineer to Vice President of Corporate Services and Chairman 
of the SBC Foundation. During that time, I had a wide variety of 
assignments including engineering, economic analysis, marketing and 
pricing policy, regulatory relations, and philanthropic work. The 
majority of my career was spent in regulatory and public affairs where 
I worked with State regulatory commissions and State governments in 
both the legislative and executive branches.
    Since retiring from SBC, my career has focused on increasing 
commercial development both domestically and in the international 
arena. As the Executive Director of Arkansas Department of Economic 
Development (ADED), I was charged with increasing inward investment 
into the State of Arkansas as well as supporting Arkansas companies in 
their effort to export their products and services overseas. In my 3-
plus years as the Executive Director, I played a major role in bringing 
companies like Hino Motors, Denso Manufacturing, and automotive parts 
supplier Eakas Corporation to Arkansas. I was also involved in the 
initial discussions and negotiations in recruiting Welspun of India to 
invest in manufacturing facilities in Arkansas.
    Following my tenure at ADED, in 2007, I had the honor of being 
nominated by President Bush and confirmed by the United States Senate 
to be the Director of the U.S. Trade and Development Agency, a sister 
organization to the Export-Import Bank of the United States. I consider 
it a great privilege and honor to have served as the Director of USTDA 
and to have played an important part in assisting U.S. companies 
develop export opportunities throughout the world.
    As I have prepared for the opportunity to join the Board of the 
Export-Import Bank, I have found my passion and experience to 
complement nicely the work of the Bank. Finding innovative ways to 
assist businesses, both small and large, to expand their markets beyond 
our borders and in the process create more and better jobs for the 
American workforce is something that I am passionate about. I know U.S. 
products are in great demand around the globe and it is vitally 
important to make them available to those buyers that would otherwise 
not have access to the best products in the world. The Export-Import 
Bank is playing a critical role in bringing this important aspect of 
commerce and job growth to U.S. business and, if confirmed, I look 
forward to being a part of the Ex-Im Bank's team.
    Mr. Chairman, Senator Shelby, and Members of the Committee, thank 
you again for the opportunity to appear before you today as I seek your 
support for my nomination to be a member of the board of the Export-
Import Bank of the United States.
                                 ______
                                 
                 PREPARED STATEMENT OF RICHARD CORDRAY

          To Be Director, Consumer Financial Protection Bureau
                           September 6, 2011

    Thank you, Chairman Johnson, Ranking Member Shelby, and Members of 
the Committee. I am honored to be here today as the nominee for the 
position of Director of the Consumer Financial Protection Bureau.
    I am glad to have my wife Peggy and my twins Danny and Holly here 
with me today. I deeply appreciate the confidence that President Obama 
has shown by nominating me to serve as the first Director of the 
Bureau. I thank Professor Elizabeth Warren for all her painstaking and 
thoughtful work to turn the Bureau from an abstract idea into a 
tangible, vibrant new agency. And I am grateful to the Committee 
Members for all your personal courtesy and advice over the past month.
    From childhood, my parents taught me the value of work that seeks 
to improve the lives of others. My Dad, Frank, now 93, spent his entire 
career in programs that served children and adults who have 
developmental disabilities. My Mom, Ruth, who died of cancer when I was 
in college, founded the first foster grandparent program for the 
developmentally disabled in Ohio, in addition to doing all the things 
that a mother does to raise three rambunctious boys.
    After completing degrees in political theory, economics, and law, I 
worked for years as an attorney in the private sector with individual 
and business clients, and was in and out of public service, including a 
brief stint in the Ohio legislature. In 2002, however, my life took a 
different direction when I became the Franklin County Treasurer.
    The job required me to develop managerial skills and the knowledge 
needed to run a financial office and safeguard public funds. But there 
was also another, very significant dimension of the county treasurer 
work. From the beginning, I set out to collect millions of dollars of 
unpaid property taxes. The people who evade their taxes take advantage 
of all the law-abiding taxpayers and businesses who meet their 
obligations. I thought that was wrong, and I tried to fix it by 
leveling the playing field.
    As I went about that task, I was deeply impressed by the importance 
of consumer finance issues and the growing difficulties they pose for 
families and households. Although I found that many delinquent 
taxpayers were not willing to pay their share until we moved 
aggressively to enforce the law against them, I also found something 
different and noteworthy: many individuals did not want to be in 
trouble, and wanted to pay their share, but were in tough circumstances 
through no fault of their own. Sometimes it was because of the loss of 
a job. Other times I would find that it was because of a death or 
serious illness in their family or because of a divorce that heaped on 
the added expense of running two households instead of just one.
    Out of these experiences, I developed a strong resolve to address 
these kinds of financial difficulties that confront our communities. I 
quickly learned that there is no such thing as a one-size-fits-all 
solution as we seek to aid those who want to do the right thing and, 
when necessary, to thwart those who seek to take advantage of others. 
On a variety of issues, we experimented with new approaches, and we 
always sought to find new partners. We successfully pushed for a new 
law requiring high school students to receive personal finance 
education before they could graduate. As we saw the foreclosure crisis 
wreaking havoc in many neighborhoods, we created a ``Save Our Homes'' 
task force to bring together businesses and banks, nonprofits, and 
Government, to work together in assisting people who were just frantic 
not to lose their homes.
    Later I became the State Treasurer. In that position, it was my 
primary duty to protect the public's money during the financial crisis, 
a job I fulfilled by steering clear of risky investments. In addition, 
I continued to work on consumer issues. We expanded the ``Save Our 
Homes'' program into a statewide effort, and I cochaired a task force 
to work with mortgage servicers on a voluntary basis to seek fair 
treatment of their customers. The Chief Justice of the Ohio Supreme 
Court and I teamed up to start a foreclosure mediation program in the 
courts. And we implemented the new personal finance education law by 
developing a curriculum and training hundreds of teachers.
    Another major initiative we undertook during my time as Treasurer 
was the dramatic expansion of a low-interest loan program to help small 
businesses create jobs and to help farmers obtain needed funds on an 
affordable basis. We went out of our way to make this initiative 
available to the community banks that make credit available to 
borrowers and form the backbone of our smaller and medium-sized towns. 
All of this work reinforced for me how imaginative strategies can 
benefit both consumers and honest businesses, who share many common 
interests.
    Before coming to the Bureau as the chief of Enforcement, I also 
served as the Ohio Attorney General. There too, with a different set of 
tools, my main objectives in consumer protection were to help empower 
people to make sound financial decisions in managing their affairs. To 
protect seniors, we took on sweepstakes scams and other frauds 
targeting the elderly. We pursued many actions against foreclosure 
rescue scammers who were reaching into the pockets of desperate people 
in an effort to steal what little remained as they sought to keep their 
homes. And where necessary, we pursued those mortgage servicers who, 
despite strong warnings, repeatedly violated consumer protection laws.
    At every stage of our work, I believed--and I believe today--that 
law enforcement which is evenhanded, fair, and reasonable not only 
protects consumers, but it also supports what I call the honest 
businesses in two key ways. First, the businesses that cheat can gain a 
significant and unfair advantage, and law enforcement protects honest 
businesses against the cheaters. Second, keeping the marketplace clean 
makes sure consumers are treated fairly and gives them confidence they 
need to participate in that market.
    These are the experiences that brought me to the Consumer Financial 
Protection Bureau, where I have found that Congress provided us with 
both a range of tools and the resources to analyze and address the 
problems that consumers face. As Ohio's Attorney General, when I saw 
something wrong I typically had only two options to choose from: do 
nothing, or open an investigation that might lead to a lawsuit. We used 
that tool when it was necessary, though I deliberately instituted an 
early warning policy of notifying parties and giving them a chance to 
tell us their side of the story before we filed a lawsuit. On a number 
of occasions, this policy allowed us to resolve issues without going to 
court.
    At the Bureau, our bigger and more flexible toolbox includes 
research reports, rulemaking, market guidance, consumer education and 
empowerment, and the ability to supervise and examine both large banks 
and many nonbank institutions. I know from my own experience that 
lawsuits can be a very slow, wasteful, and needlessly acrimonious way 
to resolve a problem. The supervisory tool, in particular, offers the 
prospect of resolving compliance issues more quickly and effectively 
without resorting to litigation. We are continuing to build our 
capacity to make effective use of this entire range of tools.
    Enforcement, of course, will still have an important role at the 
Consumer Bureau. If people are ignoring or evading consumer protections 
laws--and seeking to gain an unfair advantage over their law-abiding 
competitors--then litigation is an essential tool, and we will use it 
judiciously.
    I also am convinced that the Bureau will find many opportunities to 
streamline regulations and disclosures. Our ``Know Before You Owe'' 
project is working to combine the mortgage disclosure forms required 
under two distinct but overlapping statutes to make the costs, risks, 
and responsibilities of a home loan clearer to consumers and at the 
same time to reduce paperwork burdens for lenders--which is a true win-
win. We are looking to find the same sweet spot in the thicket of other 
regulations we have inherited from other agencies.
    In closing, Chairman Johnson, Ranking Member Shelby, and Members of 
this Committee, I very much appreciate your consideration. If I were to 
have the privilege of being confirmed as the first Director of the new 
Consumer Financial Protection Bureau, I promise that you will have one 
person who will always be accountable to you for how we are carrying 
out the laws laid down by Congress and I will be eager to hear your 
thoughts about how we should do our work. Thank you again, and I will 
be pleased to answer your questions.

              Additional Material Supplied for the Record

LETTER OF SUPPORT FOR NOMINEE RICHARD CORDRAY FROM JOHN GLENN, RETIRED 
                  U.S. SENATOR FROM THE STATE OF OHIO



    LETTER OF SUPPORT FOR NOMINEE RICHARD CORDRAY FROM THE NATIONAL 
                       FRATERNAL ORDER OF POLICE



  LETTER OF SUPPORT FOR NOMINEE RICHARD CORDRAY FROM STEVE RASMUSSEN, 
      CHIEF EXECUTIVE OFFICER, NATIONWIDE MUTUAL INSURANCE COMPANY



  LETTER OF SUPPORT FOR NOMINEE RICHARD CORDRAY FROM THE OHIO BANKERS 
                                 LEAGUE





  LETTER OF SUPPORT FOR NOMINEE RICHARD CORDRAY FROM VARIOUS OHIO CEOS





    LETTER OF SUPPORT FOR NOMINEE RICHARD CORDRAY FROM VARIOUS OHIO 
                               SHERRIFFS





LETTER OF SUPPORT FOR NOMINEE RICHARD CORDRAY FROM VARIOUS CIVIL RIGHTS 
                                 GROUPS





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