[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
__________
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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
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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