I'D LIKE -- TO START TODAY'S --
INFORMATIONAL HEARING.
I WANT TO FIRST START BY OUT
WELL CAME WELCOMING EVERYBODY
HAD TO TODAY'S HEARING.
RELATED TO THE FEDERAL CONSUMER
FINANCIAL PROTECTION BUREAU AND
THE IMPACT IT'S HAD.
THE CFPB WAS ESTABLISHED IN THE
AFTERMATH OF THE FINANCIAL
CRISIS NEARLY TEN YEARS AGO.
THE CRISIS THAT RESULTED IN
HUNDREDS OF THOUSANDS OF
CALIFORNIA FAMILIES LOSING THEIR
HOMES.
AND PUT THE NATION ON THE BRINK
OF A FULL SCALE ECONOMIC
MELTDOWN.
LEADING UP TO THE FINANCIAL
CRISIS OUR COUNTRY'S FINANCIAL
REGULATORY AUTHORITY WAS SHARED.
OUR COUNTRY FINANCIAL REGULATORY
THIRTY WAS SHARED AMONG HALF A
pNOT COMMUNICATE OR COORDINATE
WELL TOGETHER.
FURTHERMORE NONE OF THE AGENCIES
HAVE A CLEAR MISSION TO PROTECT
CONSUMERS.
RATHER MANY WERE WORKING TOWARD
A VAGUE NOTION OF SAFETY AND
SOUNDNESS.
OF THE FINANCIAL SYSTEM.
IN HINDSIGHT THIS SYSTEM WAS
DOOMED TO FAIL.
LEARNING FROM THOSE MISTAKES
PRESIDENT OBAMA AND CONGRESS
ENACTED THE DODD FRANK WALL
STREET REFORM AND CONSUMER
PROTECTION ACT OF TWENTY TEN OF
THE MANY REFORMS INCLUDED IN THE
DODD FRANK.
THE FEDERAL GOVERNMENT ESTABLISH
A FINANCIAL REGULATORY AGENCY
THAT WOULD PUT CONSUMERS FIRST.
THE CLEAR MISSION OF PROTECTING
CONSUMERS ALLOWED THE CFPB TO
FLOURISH.
PRESIDENT OBAMA APPOINTED
RICHARD CORDRAY AS DIRECTOR OF
THE CFPB IN TWO THOUSAND TWELVE
WHERE HE SERVED UNTIL HIS
DEPARTURE IN.
TWO THOUSAND SEVENTEEN UNDER MR
CORD REYES LEADERSHIP THE CFPB
TWELVE MILLION BACK IN THE
POCKETS OF TWENTY NINE MILLION
CONSUMERS AS THE PURE PROTECT.
BROUGHT CASES AGAINST BANKS
LENDERS AND DEBT COLLECTORS FOR
ILLEGAL PRACTICES.
IT IS THE ABOLITION NEW
UNDERWRITING RULES FOR MORTGAGE
LENDERS TO MAKE A WRIT
REASONABLE DETERMINATION THAT
FARMERS HAVE THE ABILITY TO
REPAY THE LOAN.
AND DEVELOP HUNDREDS OF WELL
DESIGNED AND EASY TO UNDERSTAND
EDUCATIONAL MATERIAL SO THAT
CONSUMERS ARE ARMED WITH INFORM
INFORMATION TO HELP THEM GET THE
BEST DEAL POSSIBLE WHEN SHOPPING
FOR A MORTGAGE AN AUTO LOAN.
STUDENT LOAN.
OR PLANNING FOR RETIREMENT.
I AM EXCITED FOR TODAY'S HEARING.
AND THAT MISTER CORDRAY AND
OTHER FORMER CFPB OFFICIALS ARE
ABLE TO JOIN OUR CONVERSATION
ABOUT CONSUMER FINANCIAL
PROTECTIONS.
UNFORTUNATELY A LOT OF PEOPLE
FIND FINANCIAL ISSUES TO BE
CONFUSING OR NOT IMPORTANT.
DON'T ALWAYS KNOW HOW THE
SYSTEMS AND PRODUCTS ARE
DESIGNED TO WORK AND I CAN
UNDERSTAND IF THEY CHOOSE TO
FOCUS ON OTHER ISSUES THEY FEEL
MORE ARE MORE TANGIBLE OR MORE
IMPORTANT TO THEIR LIVES.
BUT ONE OF THE REASONS THAT I AM
MOST STRIVEN BY MY ROLE AS
BANKING CHAIR IS THAT FINANCIAL
SERVICES AFFECT.
ALL OF US ON A DAILY BASIS AND
HOW WE THINK ABOUT POLICIES
RELATED TO FINANCIAL SERVICES
PLAYS A CRITICAL ROLE IN WHETHER
CONSUMERS ARE GETTING A FAIR
DEAL WHEN THEY GAUGE WITH THESE
COMPANIES.
GETTING A BETTER INTEREST RATE
ON A MORTGAGE OR CAR LOAN CAN
SAVE A FAMILY THOUSANDS OF
DOLLARS A YEAR.
ALLOWING THEM TO SPEND THAT
MONEY ON OTHER THINGS THAT ARE
NEEDED.
AND CREATE A HEALTHY LIFE.
ELIMINATING PREDATORY BUSINESSES
AND PRODUCTS FROM THE MARKET CAN
HELP FAMILIES AVOID THE
DEVASTATING FINANCIAL
CONSEQUENCES BROUGHT ON BY
DAMAGE CREDIT.
WAGE GARNISHMENT OR CAR
REPOSSESSIONS.
THE ISSUES OF CONSUMER FINANCIAL
PROTECTION IS CENTRAL TO THE
WELL BEING AND SUSTAINABILITY OF
FAMILIES IN CALIFORNIA.
GIVEN WHAT IS OR IS NOT
HAPPENING AT THE FEDERAL LEVEL
WE HAVE AN IMPORTANT ROLE TO
PLAY IN CALIFORNIA AND FINING
OUR OWN WAYS TO LOOK OUT FOR
CONSUMERS.
I LOOK FORWARD TO TODAY'S
HEARING AND HOPE THAT IT BRINGS
THE MUCH NEEDED ATTENTION TO
THESE ISSUES.
WITH THAT I WOULD LIKE TO
WELCOME UP.
OUR FIRST WITNESS WHICH IS
MISTER RICHARD CORDRAY FORMER
DIRECTOR OF THE CFPB
.
MON AND MEMBERS OF THE COMMITTEE.
FOR INVITING TO TESTIFY MEET BE
TO TESTIFY TODAY MY NAME IS
RICHARD CORDRAY AND I HAD THE
HONOR TO SERVE AS THE FOUNDING
DIRECTOR OF THE U. S. CONSUMER
FINANCIAL PROTECTION BUREAU. FOR
ITS FIRST SIX YEARS.
MY TESTIMONY CONCERNS HOW
CALIFORNIA CAN TAKE THE
INITIATIVE TO PROTECT CONSUMERS
IN THE FINANCIAL MARKET PLACE.
AT A TIME WHEN THE FEDERAL
GOVERNMENT IS RETREATING FROM
THIS AREA.
IT WILL TOUCH ON THEORIES OF
FINANCIAL REGULATION THE PURPOSE
ROLE IN CURRENT STATUS OF THE
CFPB.
HOW FEDERALISM AFFECTS CONSUMER
FINANCE AND THE RATIONALE FOR
CALIFORNIA TO STEP UP AND
ENHANCE ITS OWN CAPABILITY TO
PROTECT CONSUMERS?
CALIFORNIA HAS ALWAYS PRIDED
ITSELF ON BEING A LEADER IN
LOOKING OUT FOR ITS PEOPLE AND
HAS A CHANCE TO DO SO AGAIN HERE.
FINANCIAL REGULATION IS
ENORMOUSLY IMPORTANT FOR PEOPLE
WHO OFTEN FEEL FRUSTRATED OR
MISTREATED IN THE FINANCIAL
MARKET PLACE THE PROBLEMS THEY
FACE AT A PERSONAL LEVEL ARE
MAGNIFIED THROUGHOUT THE ECONOMY.
THE LAST TWO GENERATIONS HAVE
SEEN AN EXPLOSION OF CONSUMER
DEBT WHICH IS RISEN FROM ABOUT
ONE THOUSAND PER PERSON THAN. TO
MORE THAN FORTY THOUSAND DOLLARS
PER PERSON TODAY.
THE MASS AVAILABILITY CONSUMER
CREDIT HAS CREATED NEW
OPPORTUNITIES FOR PEOPLE AND WE
SHOULD BE MINDFUL OF THAT.
BUT IT ALSO INCREASES THE RISKS
THEY FACE AND THE RISKS TO OUR
ECONOMY.
EXOTIC LENDING IN THE MORTGAGE
MARKET BROUGHT DOWN THE ENTIRE
AMERICAN ECONOMY IN.
TWO THOUSAND EIGHT COSTING
MILLIONS OF JOBS MILLIONS OF
HOMES AND TRILLIONS IN LOST
RETIREMENT SAVINGS.
THE REGULATORS LACK THE TOOLS TO
MONITOR THE CONSUMER MARKETS
EFFECTIVELY AND MISSED THE TELL%
TALE SIGNS.
IN THE END THEY WERE TOO LATE TO
STOP THE FINANCIAL CRISIS FROM
TURNING INTO THE GREAT RECESSION.
IN THE WAKE OF THAT CATASTROPHE
WHICH TURNED OUT TO BE WORLDWIDE
IN SCOPE THE COURSE OF EXPERTS
CALLED FOR AN OVERHAUL OF
FINANCIAL REGULATION.
THEY CONVERGED ON THE TWIN PEAKS
THEORY WHICH HAS BEEN BROADLY
ACCEPTED IS THE RIGHT APPROACH
FOR THE TWENTY FIRST CENTURY.
IT OPPOSES DISTINCT SEPARATION
FROM BETWEEN THE FIRST PEAK OF
FINANCIAL STABILITY.
WERE POTENTIAL REGULATORS ASSURE
THE STABILITY OF THE FINANCIAL
COMPANIES THEMSELVES.
AND THE SECOND PEAK OF FINANCIAL
CONDUCT WHERE OTHER REGULATORS
ARE RESPONSIBLE FOR CONSUMER
PROTECTION.
THIS APPROACH CREATES EFFICIENCY
BY HAVING THE SAME REGULATOR
OVERSEE THE CONDUCT OF BOTH
CHARTERED BANKS AND OTHER
FINANCIAL COMPANIES WHICH OFTEN
COMPETE WITH ONE ANOTHER IN THE
SAME MARKETS SUCH AS MORTGAGE.
AN AUTO LENDING.
THE SEPARATION THE TWO MAIN
FUNCTIONS IS ALSO ESSENTIAL TO
PREVENT ONE OF THESE GOALS FROM
SUBORDINATING THE OTHER.
IN THE TWENTIETH CENTURY MODEL
THE MISSING FOCUS WAS CONSUMER
PROTECTION.
WE NEGLECTED -- OVERSIGHT OF THE
CONDUCT THE FINANCIAL COMPANIES
AND IT COST ALL THIS DEARLY
INCLUDING FORTY MILLION
CALIFORNIANS.
THE GREAT RECESSION ALSO BROUGHT
IN A DEEP FISCAL CRISIS IN
CALIFORNIA THAT HAS ONLY
RECENTLY BEEN HEALED.
IN THE PAST DECADE MOST LARGE
WESTERN ECONOMIES HAVE ADOPTED
THE TWIN PEAKS MODEL US TRILLION
NEW ZEALAND THE UNITED STATES AT
THE FEDERAL LEVEL.
THE UNITED KINGDOM IRELAND SOUTH
AFRICA OTHERS A PROGRESSING
TOWARD THE SAME DESTINATION.
BUT RIGHT NOW CALIFORNIA STILL
OPERATING ON THE OBSOLETE MODEL
WITH ITS BUILDING CONFLICT OF
INTEREST BETWEEN PROMOTING THE
SAFETY AND SOUNDNESS OF
FINANCIAL COMPANIES.
VERSES REGULATING HOW THEY TREAT
CONSUMERS.
THE TWO GOALS ARE SOMETIMES AT
ODDS AND THE FINANCIAL REGULATOR
DEPENDS IN PART FOR ITS FUNDING
ON DUES PAID BY THESE COMPANIES.
THAT IS NOT THE RIGHT ANSWER FOR
STATUS IMPORTANCE CALIFORNIA
WHICH NOW BOASTS THE FIFTH
LARGEST ECONOMY IN THE WORLD.
FOR THESE REASONS CALIFORNIA'S
DESERVE A MODERNIZE STRUCTURE
WITH A MORE CONCENTRATED FOCUS
ON CONSUMER FINANCIAL PROTECTION.
AT THE FEDERAL LEVEL THE CFPB
WAS CREATED TO FULFILL THIS ROLE.
IN LESS THAN A DECADE IT'S
PROVED TO BE A GREAT SUCCESS.
AS THE CHAIRPERSON AND NOTED IN
HIS AMPLIFIED THE VOICES OF
CONSUMERS RECEIVING AND HANDLING
OVER ONE POINT SIX MAIN
COMPLAINT SINCE IT OPENED STORES.
IT'S ENFORCED THE LAW VIGOROUSLY
RETURNING NOW TWELVE POINT FOUR
BILLION DOLLARS TO MORE THAN
THIRTY MILLION AMERICANS WHICH
WORKS OUT TO ABOUT A BILLION
DOLLARS FOR CALIFORNIANS ALONE.
ITS REFORMS THE MORTGAGE AND
CREDIT CARD MARKETS HAVE SAVE
CONSUMERS BILLIONS OF DOLLARS
MORE PER YEAR.
PUTTING A HALT THE IRRESPONSIBLE
AND PREDATORY LENDING THAT
BROUGHT ON THE FINANCIAL CRISIS
DAMAGE TO OUR ECONOMY AND HURT
SO MANY AMERICANS.
IT ALSO HAS REIGNED IN HER
DRESSING DEBT COLLECTORS FORCED
IMPROVEMENTS TO THE CREDIT
REPORTING COMPANIES AND STOP
MANY SLOPPY OR ABUSIVE PRACTICES
BY OTHER LENDERS AND STUDENT
LOAN SERVICERS.
RIGHT NOW THE CFPB HAS BEEN
RETREATING FROM SOME OF ITS
RESPONSIBILITIES UNDER ITS NEW
LEADERSHIP.
IS BACKED AWAY FROM A STRONG
FEDERAL AND PAYDAY LENDING.
FROM ACTIONS TO PREVENT MILD
VIOLATIONS OF THE MILITARY
LENDING ACT AND FROM AGGRESSIVE
OVERSIGHT OF STUDENT LOAN
SERVICERS.
I'M A WHERE YOU'RE GOING TO HEAR
MORE ABOUT THESE ISSUES FROM
OTHER PANELISTS WHO ARE EXPERT
IN THESE AREAS AND WE DISCUSS
THEM IN MORE DETAIL.
BUT THIS IS THE PERFECT TIME FOR
CALIFORNIA TO STEP FORWARD TO
SHORE UP CONSUMER FINANCIAL
PROTECTION.
EVEN AS THE TRUMP ADMINISTRATION
IN WASHINGTON IS CURRENTLY
DEFAULTING AND SOME OF ITS
OBLIGATIONS UNDER FEDERAL LAW.
THE FINANCIAL FOR FORM WHAT THE
CREATED THE CFPB NOTICE THE DODD
FRANK ACT EXPRESSLY PROVIDED FOR
MORE EXPANSIVE PROTECTIONS AT
THE STATE LEVEL.
THEY CAN GO BEYOND FEDERAL
PROTECTIONS. TO PUT IT SIMPLY
THE LAW CLEARLY SAYS THAT
FEDERAL LAW SETS A FLOOR AND NOT
A CEILING ON CONSUMER FINANCIAL
PROTECTION IN THIS COUNTRY.
CONGRESS THUS OPENED THE DOOR
FOR MORE VIGOROUS PROTECTION OF
CONSUMER RIGHTS THE STATE
OFFICIALS WHO CAN INSURE THAT
THESE LAWS ARE STRONG AND THE
THIRD FORCED EFFECTIVELY.
THESE EFFORTS NOT ONLY PROTECT
CONSUMERS WHO SIMPLY DESERVE TO
BE TREATED FAIRLY BY FINANCIAL
COMPANIES.
BUT IT ALSO IN THIS IS IMPORTANT
LEVELS THE PLAYING FIELD BY
PROTECTING MORE ETHICAL
COMPANIES FROM HAVING TO COMPETE
AGAINST BAD ACTORS THAT ARE
WILLING TO CUT CORNERS AND
VIOLATE THE LAW. TO GET AN
ADVANTAGE IN THE MARKET.
THAT IS THE WORST FORM OF UNFAIR
COMPETITION AND STRONGER
ENFORCEMENT OF CONSUMER LAWS CAN
HELP ROUTED OUT.
WE ALSO NEED TO DO A BETTER JOB
OF EDUCATING PEOPLE ABOUT THE
RISKS AND CHALLENGES A MORE
COMPLICATED CREDIT PRODUCTS.
OVER THE PAST DECADE MANY
CONSUMERS HAVE BEEN EXPOSED TO
THE HAZARDS OF MORTGAGE
INSTRUMENTS WITH INCREASINGLY
EXOTIC FEATURES.
WE NOW HAVE ACCESS TO REVOLVING
CREDIT OFTEN IN MULTIPLE CREDIT
CARD ACCOUNTS WITH DIFFERENT
INTEREST RATES IN VASTLY
DIFFERENT TERMS.
AND THEY MAY BE JUGGLING VARIOUS
OTHER CREDIT APPLICATIONS AS
WELL.
YET NOBODY WOULD CLAIM THAT THIS
COUNTRY OR THIS STATE IS
SUDDENLY DOING A BETTER JOB OF
EDUCATING CONSUMERS ABOUT THEIR
OBLIGATIONS NOT IN THE HOME.
NOT IN SCHOOL NOT AT ORK AND
NOWHERE ELSE.
THAT'S A TASK WE NEED TO TAKE
MUCH MORE SERIOUSLY THAN WE NOW
DO OR HAVE DONE.
BY TAKING THE INITIATIVE
CALIFORNIA TO HELP LEAD OTHER
STATES FORWARD.
THIS WORK MATTERS GREATLY IN OUR
SOCIETY WHICH IS MARKED RIGHT
NOW BY GROWING INCOME INEQUALITY
AND HUGE WEALTH INEQUALITY.
THE FOCUS ON PUTTING MORE MONEY
INTO PEOPLE'S POCKETS SHOULD BE
MATCHED BY A SIMILAR FOCUS ON
KEEPING MORE MONEY IN THEIR
POCKETS.
RATHER THAN HAVING IT DRAIN AWAY
A NICKEL AND DIME FEES FRAUDS
AND SCAMS WERE ABUSES THAT MAY
BE PERPETRATED BY BIG FINANCIAL
COMPANIES.
IN A SIMPLER ERA BEEN FRANK
FRANKLIN DECLARED AS POOR
RICHARD'S ALMANAC THAT A PENNY
SAVED IS A PENNY EARNED.
IN TODAY'S WORLD A PENNY SAVED
FROM FINANCIAL PREDATORS IS A
PENNY THAT IS VERY WELL EARNED
INDY.
A SINGLE BAD FINANCIAL
EXPERIENCE CAN RUIN A PERSON OR
FAMILY AND A CONSTELLATION OF
BAD EXPERIENCES CAN UNDERMINE
ENTIRE COMMUNITIES AS WE SAW IN
THE RUN UP TO THE FINANCIAL
CRISIS.
JUST A DECADE AGO.
IN NINETEEN SIXTY TWO PRESIDENT
KENNEDY GAVE A SPEECH TO
CONGRESS IN WHICH FOR THE FIRST
TIME HE SPOKE DIRECTLY ABOUT THE
ROLE OF THE CONSUMER IN OUR
SOCIETY.
HE NOTED THAT THIS IS A QUOTE
CONSUMERS BY DEFINITION INCLUDE
US ALL.
THEY'RE THE LARGEST ECONOMIC
GROUP IN THE ECONOMY. TWO THIRDS
OF ALL SPENDING IN THE ECONOMY
IS BY CONSUMERS.
BUT THEY'RE THE ONLY IMPORTANT
GROUP IN THE ECONOMY WHO ARE NOT
EFFECTIVELY ORGANIZED WHOSE
VIEWS ARE OFTEN NOT HEARD.
HIS WORDS ARE JUST AS TRUE TODAY.
THE PUSH TO PROTECT CONSUMERS
LATER RESULTED IN SUCH LANDMARK
BIPARTISAN LEGISLATION IS THE
TRUTH IN LENDING ACT THE EQUAL
CREDIT OPPORTUNITY ACT AND THE
FAIR DEBT COLLECTION PRACTICES
ACT.
ENACTED UNDER BOTH REPUBLICAN
AND DEMOCRATIC ADMINISTRATIONS.
THIRTY YEARS LATER THESE EFFORTS
AT THE FEDERAL LEVEL HAD FALLEN
BEHIND THE RAPID PACE OF
DEVELOPMENTS IN THE FINANCIAL
MARKET PLACE.
THE LAW IS NEEDED TO BE UPDATED
AND AN OUTMODED REGULATORY
STRUCTURE MEANT THAT THE LAWS
WERE BEING SYSTEMATICALLY UNDER
ENFORCED WITH GRAVE CONSEQUENCES
FOR ALL AMERICANS.
THE CFPB WAS AN ESSENTIAL AND
WELCOME CENTER PIECE OF THESE
REFORMS.
AS THE FEDERAL GOVERNMENT NOW
AGAIN SEEMS TO BE ADVOCATING ITS
ROLE IT'S CRUCIAL FOR THIS
COUNTRY THAT THE STATE TO TAKING
UP THE MANTLE OF CONSUMER
FINANCIAL PROTECTION.
I'M ENCOURAGED TO SEE THAT
CALIFORNIA IS PREPARED TO LEAD
THE WAY.
THANK YOU I'D BE GLAD TO ANSWER
ANY QUESTIONS YOU MAY HAVE.
THANK YOU MISTER CORDRAY.
MEMBERS ANY QUESTIONS.
ASSEMBLY MEMBER MARK STONE.
THANK YOU MISTER CORDRAY AND I
ALSO MERCED PRECIADO BEING ABLE
TO WORK WITH YOUR OFFICE OVER
THE YEARS AS WE'VE BEEN.
STRUGGLING WITH STUDENT LOANS TO
MOST SERVICES AND I KNOW THAT
SECTIONS COMING UP A LITTLE BIT.
WHICH I'M LOOKING FORWARD.
TO BUT WHAT DOES THAT LOOK LIKE
FOR THE STATE TO STEP IN AND HOW
DO WE MAKE SURE THAT WE AND
APPRECIATE YOUR COMMENT WHICH I
BELIEVE IS TRUE THAT.
CONGRESS MEANT TO SET THE FLOOR
GIVING US SOME LATITUDE BUT
OFTEN TIMES WHEN WE TRY TO TAKE
THOSE STEPS.
THAT PREEMPTION THE NOTION OF
PREEMPTION GETS REYES WHAT IS
THIS AS AN APPROPRIATE STATE
STRUCTURE LOOK LIKE SO THAT WE
CAN HAVE THE RIGHT CONVERSATIONS
AROUND CONSUMER PROTECTION AND
HAVE.
AN APPROPRIATE.
PROTECTION SCHEME REGULATORY
SCHEME TO ENSURE THAT CONSUMERS
HAVE THAT BOYS AND THAT WE
PROVIDE THAT THAT BALANCE AND
THAT PROTECTION.
SO GOOD QUESTIONS IN THESE ARE I
THINK THE KEY ISSUES WERE
TALKING ABOUT FIRST.
UP WHAT IS THE STATE STRUCTURE
LOOK LIKE -- IT COULD TAKE A
VARIETY OF DIFFERENT
ADMINISTRATIVE FORMS I THINK AND
AS I UNDERSTAND THE THE BILL
THAT WE HAVE IN FRONT OF US
RIGHT NOW ITS PRELIMINARY AN
AGNOSTIC AS TO EXACTLY.
WHERE THIS WOULD BE LOCATED IN
THERE COULD BE DIFFERENT
APPROACHES TO THAT?
BUT THE KEY IS THAT THERE BE AN
INDEPENDENCE OF REGULATION OF
FINANCIAL CONDUCT HOW IT AFFECTS
CONSUMERS PROTECTING CONSUMERS.
AND REGULATION OF THE SAFETY AND
SOUNDNESS OF THE INSTITUTIONS
THEMSELVES IT'S ALMOST AS THOUGH
WITH THE WITH THE REGULATORS
FACING THE INSTITUTION OR FACING
AWAY FROM THEM TO THEIR
CUSTOMERS.
AND THE TWO ARE SOMETIMES.
IN HARMONY AND SOMETIMES AT ODDS
AND SO I THINK IT'S IMPORTANT TO
HAVE A INDEPENDENCE OF A
FINANCIAL REGULATOR THIS GOING
TO PROTECT CONSUMERS.
AGAINST FINANCIAL MISCONDUCT
THAT'S WHAT WE DID AT THE
FEDERAL LEVEL THAT'S WHAT'S
BEING DONE IN MAY MANY COUNTRIES
AROUND THE WORLD.
AND NOTABLY A NUMBER OF THOSE
COUNTRIES HAVE SMALLER ECONOMIES
THAN THE STATE OF CALIFORNIA.
STATE CALIFORNIA'S A SAID IS THE
FIFTH LARGEST ECONOMY IN THE
WORLD IF THIS IS THE RIGHT
APPROACH TO FINANCIAL REGULATION
IN THE TWENTY FIRST CENTURY.
IT'S THE RIGHT APPROACH FOR
CALIFORNIA AND I ALSO THINK
CALIFORNIA WOULD ESTABLISH
LEADERSHIP AMONG THE STATE'S UP
BUT AGAIN AS TO THE
ADMINISTRATIVE DETAILS OF
EXACTLY WHERE THIS WOULD LANDED
WHAT THE AUTHORITIES WOULD BE I
THINK THAT THERE'S A PRIDE A
DIFFERENT WAYS.
THAT COULD BE PURSUED YOU'RE
ALSO RIGHT TO RAISE THE ISSUE OF
FEDERAL PREEMPTION THERE WILL BE
BATTLES AT TIMES OVER FEDERAL
PREEMPTION.
OF THAT MAY BE HAPPENING IN
STUDENT LOANS AND STUDENT LOAN
SERVICING WE WILL SEE.
UP BUT AT THE SAME TIME THE DODD
FRANK ACT SPOKE VERY CLEARLY
ABOUT THIS IT SAID THAT THE
STATES HAVE LATITUDE TO PROTECT
CONSUMERS.
UP BEYOND WHAT FEDERAL LAW DOES
IT ALSO GAVE STATES THE
AUTHORITY TO ENFORCE FEDERAL LAW
WHICH WAS AN UNUSUAL PROVISION
BUT IT.
MADE VERY CLEAR THAT CONGRESS
INTENDED NOT ONLY TO HAVE A
STRONG PROTECTIONS IN THE LAW
FOR CONSUMERS BUT THAT THEY BE
STRONGLY ENFORCED ALL ACROSS THE
COUNTRY.
AND I THINK THAT THEY RECOGNIZE
THAT THERE WOULD BE A MOMENT
WHERE THE FEDERAL GOVERNMENT
WOULD BE BACKING AWAY FROM THIS
AND THE STATE'S WOULD BE ABLE TO
CARRY.
A PICK UP THE TORCH AND CARRY
THE BALL AND I THINK THAT THAT'S
THE MOMENT WE'VE ARRIVED AT
TODAY.
THANK YOU AND I JUST WANNA MAKE
SURE WE UNDERSCORED EXACTLY
THOSE POSITIONS AND WE HAVE HAD
A VERY WILLING PARTNER IN DE
VITO WHO TENDS TO BE THE
REGULATORY AGE YOU HAVE.
BY THAT THEN DEPENDS ON THE
ADMINISTRATOR IT DEPENDS ON THAT
STRUCTURE AND AND FOR US WITH
WHAT WE'VE BEEN DOING PERHAPS
THIS HAS BEEN A MISSING
COMPONENT TO HAVE A CONSUMER
FACING.
ADVOCATE WHO HAS A CERTAIN LEVEL
OF AUTHORITY.
AND THAT RELATIONSHIP THAN WITH
THE D. B. O. WITH WHAT WHATEVER
THAT STRUCTURE IS.
IS REALLY WHAT THE MODERN
APPROACH IS AND I THINK THAT'S
SOMETHING THAT WE NEED TO TO
FIGURE OUT HERE SO THAT WE DON'T
OVERLY BURDEN. ONE REGULATOR
WITH ALL OF THE ABOVE OR CREATE
CONFLICTS WITHIN THAT
ORGANIZATION.
BUT SET UP PROPRIOCEPTION ISMS
AND AS CALIFORNIA HAS LED IN
SOME OF THESE AREAS OTHER STATES
ARE DEFINITELY FOLLOWING US.
AND WITH THE FEDERAL GOVERNMENT
BACKING AWAY FROM THEIR
RESPONSIBILITIES THERE I THINK
IT IS LED TO US SO I THINK THIS
IS A GOOD APPROPRIATE
CONVERSATION FOR US TODAY THANK
YOU.
THANK YOU AS A MEMBER WICKS.
THANK YOU THANK YOU MISTER
CARTER FOR COMING TODAY I HAD
THE HONOR OF WORKING IN THE
WHITE HOUSE ON THE EARLY STAGES
OF THE CREATION OF THE CONSUMER
FINANCIAL PROTECTION BUREAU.
WORKING FOR PRESIDENT OBAMA --
AND LEGACY I WAS VERY HAPPY TO
SELL YOUR WORK THERE -- YOU KNOW
WITH THE THE CFPB FEDERALLY
ANOTHER SORT OF THREE PROMISE
EDUCATION FORSMAN RESEARCH
COMPONENTS TO IT -- CAN YOU TALK
SPECIFICALLY ABOUT ANY LESSONS
YOU LEARNED IN TERMS OF HOW
WE'RE REALLY PROTECTING LOW
INCOME COMMUNITIES IN PARTICULAR --
MANY OF WHOM ARE
DISPROPORTIONATE COMMUNITIES OF
COLOR -- AND SOME IT FROM SOME
OF THE SORT OF PREDATORY
PRACTICES.
SURE AND AND HAS GIVEN YOUR
BACKGROUND I'M SURE YOU'LL
REMEMBER THAT -- AT THE TIME OF
THE FINANCIAL CRISIS THE MILTON
IN THE MORTGAGE MARKET.
DEALT A HUGE BLOW.
TO WEALTH ACCUMULATION BY
COMMUNITIES OF COLOR IN THIS
COUNTRY YOU KNOW SOME SOME
COMMUNITIES MORE OF THEIR WEALTH
IS TIED UP IN BOND AND STOCK
MARKETS SOME OF THEM IT'S TIED
UP MORE AND HOUSING VALUES.
AMONG COMMITTEES A COLOR MORE
WEALTH TENDS TO BE TIED UP IN
HOUSING VALUES AND SINCE WITH
THE HOUSING MARKET THAT CRATERED
AND PROPERTY VALUES DECLINED
PRECIPITOUSLY IN SOME AREAS.
OFTEN LEADING TO FOR CLOSURE TO
THE PEOPLE ENTIRELY OUT LOST ALL
OF THEIR EQUITY IN THEIR HOMES.
AND THEN COULDN'T GET BACK IN
BECAUSE WITH A FOR CLOSURE ON
THE RECORD THEY COULDN'T GET
CREDIT TO GET A NEW MORTGAGE IN
AND BUY A NEW HOMES SO.
THAT WAS A TREMENDOUS BLOW TO
WEALTH INEQUALITY IN THIS
COUNTRY AND THAT GOES TO SHOW
THE KIND OF CONSEQUENCES YOU
KNOW IT ISN'T JUST WHETHER I GOT
INTO A BAD LOAN.
IT'S WHAT'S HAPPENING IN MY
COMMUNITY IN MY NEIGHBORHOOD IF
THERE'S A NUMBER FOR CLOSURES
BECAUSE OF OTHER PEOPLE'S CAN
AFFECT MY PROPERTY VALUES IT'S
GOING TO PUT ME AT RISK.
IF IT LEADS TO THE FREEZING UP
THE CREDIT MARKETS IT'S GONNA
COST BUSINESSES BEING ABLE TO
OPERATE IN THERE FOR PEOPLE LOSE
THEIR JOBS A LOT OF INNOCENT
PEOPLE ARE HURT.
BY THESE PROBLEMS AND HAVING.
A MORE SECURE SYSTEM AND MORE
SECURE APPROACH TO THIS IS IS
BOUND TO NOT ONLY BENEFIT
CONSUMERS.
BUT THE BENEFIT OF THE ECONOMY.
IN THE LONG RUN IN A STATE LIKE
CALIFORNIA THAT -- ENDED UP
HAVING TO DEAL WITH A HUGE
FISCAL CRISIS AND LOTS OF
FUNDING FOR LOTS OF THINGS GOT
CUT BECAUSE YOU DIDN'T HAVE.
THE REVENUES IN THIS LOWER
INCOME COMMUNITIES.
THE ISSUES ARE OFTEN VERY
FRAUGHT I WOULD SAY THAT HE WHAT
WE FOUND IS MANY LOWER INCOME
CONSUMERS ARE THE MOST CAREFUL
ABOUT THEIR MONEY BECAUSE IT
REALLY MATTERS THEIR LIVING ON
THE EDGE ALL THE TIME.
THE TRYING TO BE CAREFUL OF
EVERY DOLLAR YET THEY CAN MAKE.
UNFORTUNATE DECISIONS DECISIONS
THEY COME TO REGRET.
AND THEY ARE ALWAYS RUNNING INTO
THE PROBLEM OF TOO MUCH MONTH
NOT ENOUGH MY AND THE HIGH COST
FOR PEOPLE WHO WERE -- LOW
INCOME AND HAVE TO PAY TO GET
THE USE OF THEIR MONEY WHETHER
IT'S A CHECK CASHING OUTLETS FOR
THE LIKE.
MAGNIFIES THE PROBLEMS FOR THEM.
WE STILL HAVE A SIGNIFICANT
POPULATION THIS COUNTRY THAT IS
UNBANKED AND IN ANOTHER
SIGNIFICANT.
LEAP IN LARGER GROUP THAT IS
UNDER PAYING -- AND BEING ABLE
TO REACH THEM WITH THE BEST A
PRODUCTS MATTERS ENORMOUSLY SO
THERE'S QUITE A BIT THAT CAN BE
DONE THIS WAS ONE OF THE FOCUSES
FOR THE CFPB WE HAD.
AN OFFICE THAT DEALT WITH --
ECONOMIC EMPOWERMENT A AND
THAT'S THE KIND OF THING THAT
COULD BE A FOCUS OF OF THIS
ENTITY HERE OR UNITS ARE
WHATEVER IT WOULD BE IT'S VERY
DIFFICULT FOR THE BANKING
SUPERVISOR THE HEAD OF TPO. TO
DEAL WITH ALL OF THOSE ISSUES
AND TO FOCUS ON CONSUMERS
WHETHER ALSO TRYING TO FOCUS ON
THE LICENSED ENTITIES IT'S
REALLY TOO BIG A JOB WE WORKED
WELL WITH HIM LET NO ONE WHO'S
BEEN IN THAT POSITION FOR THE
LAST NUMBER YEARS.
ABOUT YOU DON'T WANT THIS TO
DEPEND ON A PERSONALITY OR
TEMPERAMENT OF THE ONE
INDIVIDUAL.
YOU WANT IT TO BE BUILT INTO THE
STRUCTURE AND THAT ECONOMIC
EMPOWERMENT CONCEPT WHAT IS THAT
SPECIFICALLY LOOK LIKE ON THE
GROUND FOR THE USER.
WELL IT LOOKS YOU MEAN WHAT IT
WHAT DIFFERENCES MAKE IN THEIR
LIFE YEAH YEAH JUST MORE SOME
POTENTIAL EXAMPLE.
WELL YOU KNOW IF IF SOMEBODY CAN
BE ABLE TO GET A LITTLE BIT
AHEAD AND BORROW AGAINST
THEMSELVES RATHER THAN BORROWED
A PAYDAY LOAN IT 210031004%
INTEREST.
IN A TOUGH PLACE YOU CAN BUILD A
BETTER FINANCIAL FUTURE.
IF THEY CAN HAVE ACCESS TO
BANKING SERVICES AND NOT HAVE TO
PAY.
SIGNIFICAN PREMIUMS EVERY TIME
THEY WANT TO ACCESS TO MONEY A
CHECK CASHING STORES OR OR
ANOTHER PRODUCT PREPAID CARDS
HAVE PROVEN TO BE A GOOD PRODUCT
THAT IS.
A NOW SAFER THE CFPB IF
FACILITATED THAT BY PUTTING
RULES IN PLACE THAT NOW PROVIDE
CONSUMER PROTECTIONS FOR PEOPLE
WHO HOLD PREPAID CARDS WASN'T
TRUE UNTIL JUST A COUPLE YEARS
AGO.
THESE ARE ALL THINGS THAT. EIGHT
MORE OPPORTUNITY.
YOU KNOW PREVENT THE
EXPLOITATION OF PEOPLE WHO WERE
LIVING AT THE MARGIN AND GIVES
THEM A CHANCE TO RISE WHICH IS
WHAT WE ALL WANT TO SEE HAPPEN.
THANK YOU.
THANK YOU AS A MEMBER GRAYSON
THANK YOU MADAM CHAIR AND MISTER
CORDRAY THANK YOU VERY MUCH FOR
BEING HERE TODAY TESTIFYING AS
WELL AS YOUR YEARS OF OF PUBLIC
SERVICE.
AND I I THOUGHT IT WAS
INTERESTING -- IN YOUR COMMENTS
OPENING COMMENTS HOW DO YOU
DISTINGUISH BETWEEN THE ETHICAL
COMPANIES VERSES THE BAD ACTORS.
AND HOW THAT THAT CREATES AN
UNLEVEL PLAYING FIELD BUT THE
INTERESTING PART OF THAT WAS YOU
WERE ACTUALLY DRAWING A
CONCLUSION OF ROOTING OUT THE
BAD ACTORS BY USING.
A CONSUMER PROTECTIONS.
AND FOCUSING ON TAKING CARE OF
THE CONSUMER AND THAT WOULD HELP
DIFFERENTIATE BETWEEN THE
ETHICAL VERSUS THE BAD ACTOR.
WHAT I HAVE FOR YOU TODAY --
JUST AS A QUESTION AS YOU MOST
LIKELY ARE AWARE OF THE
CALIFORNIA LEGISLATURE IS
CONSIDERING PUTTING UP 36% CAP
RATE ON INSTALLMENT LOANS OVER
TWENTY FIVE HUNDRED DOLLARS.
AND THE THE OPPOSITION THE
CONVERSATION FROM OPPOSITION HAS
REALLY BEEN AROUND -- CONSUMER
PROTECTION VERSES ACCESS TO
CAPITAL AND WHAT I WOULD BE
INTERESTED IN IS YOUR
PERSPECTIVE ON THIS AS FAR AS
DURING YOUR TIME AT SEA -- CFPB --
IN THE DEVELOPMENT OF
REGULATIONS HOW DID YOU WORK TO
ENSURE THAT CONSUMERS ARE
PROTECTED WHILE AT THE SAME TIME
MAINTAINING ACCESS TO CAPITAL.
YEAH IT'S IT'S A GREAT QUESTION
OUT OF TRINITY GOING TO LONG AND
MY ANSWER IF I DO JUST JUST LET
ME KNOW THAT.
I'VE WORN OUT YOUR PATIENTS.
AT THE FEDERAL LEVEL THIS IS THE
DILEMMA IN TERMS OF SPEAKING TO
SHORT TERM LOANS ARE RATHER
CREDIT MARKETS AS WELL.
IS BETWEEN PROTECTING THE
CONSUMER IN PROVIDING ACCESS TO
CREDIT.
USUALLY THE TWO CAN BE
HARMONIZED PRETTY WELL -- IN
TERMS OF THE SHORT TERM LENDING
MARKET.
WHAT WE FOUND WAS THAT SOME OF
THE PRODUCTS WE THOUGHT WERE
QUITE EXPLOITATIVE I MEAN?
PEOPLE LIVING THEIR LIVES OFF OF
210031004% RATES OF INTEREST IS
NOT A RECIPE FOR A SOUND
FINANCIAL FUTURE.
MOST PEOPLE GET INTO THOSE LOANS
THINKING THEY'RE GOING TO GET
INTO A SHORT TERM LOAN AND GET
OUT OF IT AGAIN.
BUT MANY OF THEM GET STOCK THE
END UP PAYING FEE AFTER FEE
THERE NEVER ABLE TO REALLY PAY
DOWN THE PRINCIPAL THEY WILL END
UP OFTEN DEFAULTING.
DRIVING THEMSELVES INTO
BANKRUPTCY HAVING PAID OUT
THOUSANDS OF DOLLARS -- AND IT'S
IT'S REALLY A A MODEL THAT AIMED
AT THE CONSUMER WHO IS NOT ABLE
TO REPAY THE LOAN WHICH IS NOT A
NORMAL TYPE OF LENDING NORMALLY
A LENDER WANTS TO MAKE SURE THE
BORROWER CAN REPAY THE LOAN
BEFORE THEY MAKE THE LA.
BUT IF YOU CAN FIND A MODEL
WHERE YOU CAN MAKE ENOUGH MONEY
OFF OF THAT BORROWER WE DON'T
HAVE TO CARE IN THE END WHETHER
THE EVEN REPAY THEIR LOAN.
THAT TO ME IS A BROKEN MARKET AT
THE FEDERAL LEVEL WE APPROACH
THAT BY ADOPTING AN INABILITY TO
REPAIR A RULE THAT IT BEFORE
MAKING A SHORT TERM LOAN YOU HAD
TO ASSESS.
REASONABLY ASSESS IN A SHORTHAND
WAY BECAUSE YOU CAN'T DO THE
SAME UNDERWRITING FURS FOR SHORT
TERM LOAN -- THAT THE PERSON HAD
THE REASONABLE ABILITY TO REPAY
THAT LOAN -- WHEN IT CAME DUE?
OUT WE DID NOT HAVE THE
AUTHORITY AT THE FEDERAL LEVEL
UNDER OUR LAW TO IMPOSE A RATE
CAPS.
THAT'S WHAT MANY STATES HAVE
DONE IN FACT BY THE WAY AS I'M
SURE YOU KNOW.
STATES TYPICALLY HAVE HAD RATE
CAPS FOR HUNDREDS OF YEARS AND
IT WAS ONLY RECENTLY THAT THEY
ALLOWED EXCEPTIONS TO THE RATE
CAPS THAT FACILITATED A PAYDAY
LENDING INDUSTRY.
AND MANY STATES NEVER.
NEVER WENT THAT DIRECTION OR
HAVE REVERTED BACK TO IT.
AND IT'S ABOUT NINETY MILLION
AMERICANS LIVE IN STATES WITH
36% -- CAP OR THEREABOUTS -- AND
IS PEOPLE.
SEEM TO GET ALONG JUST FINE
THEY'RE NOT WORSE OFF THAN
ELSEWHERE -- AND THERE'S LOTS OF
ALTERNATIVES AVAILABLE ALTHOUGH
THEY HAVE TO FIND THEM -- AND I
THINK THE SAME WOULD BE TRUE IN
CALIFORNIA -- SO AGAIN ACCESS TO
CREDIT IS IMPORTANT BUT IT
SHOULD BE RESPONSIBLE CREDIT.
AND IF IT'S CREDIT IT'S
PREDATORY AND IT'S GONNA DRIVE
PEOPLE INTO OUT WORSE FINANCIAL
SITUATIONS THAT I THINK WE NEED
TO PUT MORE EMPHASIS ON THE
PROTECTIONS.
THANK YOU [inaudible]
ASSEMBLYMEMBER CHOI.
THANK YOU CHAIR OF THE THING I
THANK YOU MISTER NOW CADRE --
THIS IS A VERY IMPORTANT ISSUE
FOR THE CONSUMERS TO HAVE -- FOR
FINANCIAL LAW NOW PROTECTION
REGULATIONS AND IS -- OF VERY
IMPORTANT TO AMONG MANY OF THE
FACTORS THAT THAT WE CAN TALK
ABOUT -- YOU STRONGLY AGREE WITH
YOUR STATEMENT THAT THE WE NEED.
TO EDUCATE THE BETTER EDGEMONT
BETTER JOB OF EDUCATING
CONSUMERS WHAT THEY ARE GETTING
INTO.
BUT SOMETIMES I GUESS I THEY
HAVE NO CHOICE TO ONCE THEY GET
INTO AND THEY CANNOT MEET THE
OBLIGATIONS SO THAT'S WHY.
NOW YOU CAN -- CLASSIFIED AD
LENDERS AND THE GOOD TO THEM
THERE SO.
IN THE BED COMPLAINTS OF BUT
YEAH THAT COMPANIES ETCETERA --
SO IS A MATTER OF I THINK -- I'M
MAKING.
RESOURCES SO MORE CHOICES.
AVAILABLE FOR THE CONSUMER SO SO
THAT THEY CAN -- HAVE A BETTER.
MALL COMPARISON SHOPPING RATHER
THAN HAVING FOR HIM.
LIMITED TO TO A SUDDEN BAD
COMPANY SYSTEMS SPEAKER.
SO THE US -- IN ON MY A A
FEEDBACK CUT TO THAT.
I'M WONDERING -- YOU ARE SAYING
THAT THE TRUMP ADMINISTRATION OF
CURRENTLY IS THAT THE FOURTEEN
IN -- REGULATING -- THE SOME OF
THE OBLIGATIONS SO.
UNDER FEDERAL LAW IS THAT THE
FED THE WORST JOB WHY ARE IS
THAT THE AGENCY IS SO IN THE
STATE THAT WE NEED.
TO REGULATE.
AND THE IF YOU CAN GIVE ME SOME
SPECIFIC XAMPLES OF WHAT THE IN
THE AREA SO.
INSTANCES SAID THAT THE FEDERAL
GOVERNMENT THIS AT THE FOURTEEN
IN REGULATING THEIR LAW OKAY
OKAY GOOD AND BY THE WAY I I
AGREE WITH YOU I THINK MORE
CONSUMER CHOICE IS GENERALLY
GOOD.
ALTHOUGH IF THAT CHOICE CROSSES
THE BOUNDS INTO THE POTENTIALLY
FRAUDULENT AND EXPLOITATIVE AS
WE SAW SOME OF THE EXOTIC
MORTGAGE MORTGAGE PRODUCTS
LEADING UP THE CRISIS THEN -- IT
IT IT CROSSES THE LINE AND IT
NEEDS TO BE RAINED OUT BACK IN.
IN TERMS OF WHERE OF THIS THE
STATE COULD BE STEPPING UP FIRST
OF ALL UNDER UNDER THE DODD
FRANK ACT INTERESTINGLY IN THIS
IS NOT THE NORMAL.
APPROACH IT SPECIFIED THAT STATE
OFFICIALS HAD THE ABILITY TO
ENFORCE FEDERAL LAW THEY SEEM TO
BE QUITE CONCERNED THAT FEDERAL
LAW WOULD BE SYSTEMATICALLY
UNDER ENFORCED AND THEY WANTED
TO BRING MORE.
TEAMMATES TO THE TO THE JOB OF
MAKING SURE FEDERAL LAW WAS
ENFORCED SO CALIFORNIA DOES HAVE
THE ABILITY TO ENFORCE FEDERAL
LAW. TO A SIGNIFICANT DEGREE IN
CONSUMER FINANCIAL PROTECTION SO
THAT'S ONE PIECE -- ALSO IT HAS
THE AUTHORITY TO PASS ITS OWN
LOS.
AREAS WHERE I WOULD SAY THAT I
THINK THE FEDERAL GOVERNMENT HAS
BEEN PULLING BACK I'M MENTIONED
A FEW OF IN MY TESTIMONY.
I THINK THAT THEY HAVE NOT BEEN --
NOT BEEN -- EXERTING THE PROPER
OVERSIGHT OVER STUDENT LOAN
SERVICERS WHO ARE CAUSING ALL
KINDS OF PROBLEMS FOR STUDENT
LOAN BORROWERS.
I THINK THAT THEY'RE WALKING
BACK FROM THE PAYDAY LENDING
RULE WHICH WOULD HAVE IMPOSED A
REASONABLE.
MODEST -- PUBLICATION ON LENDERS
TO ASSESS THE REBEL BILLETED
REPAIR OF THE POWER BEFORE
MAKING THE LOAN -- AND THEY HAVE
WALKED AWAY FROM PREVENTIVE
REGULATION UNDER THE MILITARY
LENDING ACT WHICH WHICH AGAIN IS
MEANT TO PROTECT OUR SERVICE
MEMBERS IN OF VULNERABLE
POPULATION WHO.
IF THEY'RE DEPLOYED IN OVERSEAS.
HE REALLY THEY REALLY CAN'T BE
MONITORING THEIR FINANCIAL
AFFAIRS BACK HOME VERY WELL AND
SO WITH THE CONGRESS VERY
SENSIBLY IMPOSED A LIMIT.
ON THE INTEREST RATE THAT COULD
BE CHARGED ON PRODUCTS TO THE
MILITARY AS A WAY OF PROTECTING
THEM AND SIMPLIFYING THEIR LIVES
SO THEY CAN FOCUS ON DOING WHAT
THEY'RE SUPPOSED TO DO WHICH IS --
RISKING THEIR LIVES TO DEFEND
ALL OF US SO.
THESE ARE AREAS WHERE THEY
WALKED BACK I DON'T KNOW WHAT
AREAS FURTHER IS THEY MAY WALK
BACK FROM.
BUT IT'S IMPORTANT FOR STATES TO
STEP UP IN CALIFORNIA AGAIN IS
THE LARGEST ECONOMY THE LARGEST
STATE IN THE NATION AND A REAL
LEADER WHOSE EXAMPLE WOULD
MATTER TO OTHER STATES AND BRING
THEM ALONG I THINK.
AS YOU INDICATED THOSE OTHER
AREAS -- THAT THE WE SEE YOU SEE
THAT HAS NOT BEEN THE OF CLOSELY
MONITORED THE AND IN CALIFORNIA
WHICH AGENCY IS SOMEONE
RESPONSIBLE TO WILL MONITOR.
AND ENFORCE THE LAW.
WELL AS I UNDERSTAND IT THERE'S
THERE'S TWO POSSIBILITIES HERE
ONE IS THE ATTORNEY GENERAL'S
OFFICE AND ONE IS THE DEPARTMENT
OF BUSINESS OVERSIGHT -- WE
WORKED WELL WITH BOTH -- THE
CURRENT ATTORNEY GENERAL A AND
WHEN HE WAS IN CONGRESS BEFORE
THAT AND ALSO -- THE HEAD OF THE
DEPARTMENT OF BUSINESS OVERSIGHT
BUT I THINK IT DOES MATTER IF
THE STRUCTURE -- SECURES THIS
PROTECTION AND IT DOESN'T DEPEND
ONLY ON ONE INDIVIDUAL AND ALSO
THERE CAN BE SUCH A THING AS TOO
MANY JOBS BEING GIVEN TO ONE
INDIVIDUAL. TO OVERSEE THE
LICENSING AND THEN THE SAFETY
AND SOUNDNESS OF ALL OF THESE
DIFFERENT FINANCIAL COMPANIES
AND THERE'S THOUSANDS OF THEM.
AND THEN ALSO TO BE EXPECTED TO
PROTECT CONSUMERS IT'S VERY
DIFFICULT TO GET THE RIGHT FOCUS
ON THAT AND THAT'S WHY AROUND
THE WORLD OVER NOW OVER NOW
COUNTRIES ARE SPLITTING THOSE
TWO THINGS SO THAT EACH OF THEM.
CAN HAVE SOMEBODY DEDICATED TO
BEING -- WHOLLY FOCUSED ON THAT
PARTICULAR JOB.
MAYBE THAT I CAN TALK ABOUT THE
SOME.
IMPROVEMENTS WE CAN MAKE A IN A
BETTER ENFORCEMENT.
OKAY.
THANK YOU ASSEMBLY MEMBER
MELENDEZ.
THANK YOU MADAM CHAIR -- MISTER
CORDRAY THANK YOU VERY MUCH FOR
COMING TODAY THIS IS THE FIRST
OPPORTUNITY THAT I'VE I'VE I'VE
HAD TO MEET YOU SO IT'S A
PLEASURE -- DID HAVE YOU
SPEAKING WITH US TODAY I I'M%
LOOKING THROUGH YOUR PURE
PRINTED TESTIMONY.
AND I SEE WHERE YOU SAY THAT IN
LESS THAN.
I THINK REFERRING TO YOUR
LEADERSHIP AT CFPB THAT IN LESS
THAN A DECADE ED PROVED TO BE A
GREAT SUCCESS.
AND THEN IT FURTHER GOES ON TO
STATE THAT NOW YOU FEEL THAT --
CPB IS RETREATING FROM SOME OF
ITS RESPONSIBILITIES -- UNDER
NEW LEADERSHIP SO IT SEEMS YOU
ARE TRYING TO TO TO DRIVE VERY
DISTINCT LINE BETWEEN THEIR ROLE
IN THEIR SUCCESS AS WHEN YOU
WERE THERE AS OPPOSED TO WHAT IT
IS NOW IS THAT AN INCORRECT
ASSUMPTION FOR ME TO ME YEAH
ALTHOUGH.
ALTHOUGH -- THAT'S A LITTLE
OVERSTATED BECAUSE THE NUMBERS
THAT THEY GAVE YOU HERE ARE
NUMBERS THAT INCLUDE SOME WORK
THAT'S BEEN DONE UNDER MY
SUCCESSORS.
SO THEY HAVE TAKEN SOME
ENFORCEMENT ACTIONS I THINK THE
NUMBER WAS TWELVE BILLION.
UNDER THE SIX YEARS THAT I WAS
THERE IT'S NOW TWELVE POINT FOUR
BILLION SO THEY'VE TAKEN SOME
ENFORCEMENT ACTION SINCE THEN
THEY HAVEN'T COMPLETELY
RETREATED -- THE NUMBER OF
CONSUMER COMPLAINTS HANDLED WAS
ONE POINT THREE MILLION AT THE
TIME I LEFT AND IT'S NOW UP OVER
ONE POINT SIX PROBABLY ONE POINT
SEVEN OR ONE POINT EIGHT SO THEY
CONTINUE TO WORK IN THOSE AREAS.
THEY HAVEN'T RETREATED ACROSS
THE BOARD FROM EVERYTHING BUT
THEY'VE RETREATED ON SOME KEY
ISSUES AND I'M WORRIED THAT THEY
MAY RETREAT SOME MORE BUT IN
GENERAL YES THAT'S THE
DISTINCTION I WAS.
TRYING TO POSE WAS BETWEEN
AGGRESSIVE EFFORTS TO PROTECT
CONSUMERS AND WHAT I THINK HAVE
HAVE BEEN -- SOMEWHAT SOMEWHAT --
LESS AGGRESSIVE EFFORTS
CERTAINLY UNDER THE CRY THINK
THEY WOULD AGREE WITH THAT
THEMSELVES.
OKAY WELL THAT'S FAIR ENOUGH OF
AN ANSWER -- UNDER YOUR
LEADERSHIP WERE YOU -- I GUESS
WERE YOU ABLE TO SUCCESSFULLY
INVESTIGATE THE WELLS FARGO
FRAUD THAT WAS TAKING PLACE.
BUT WE WERE AND WE DID THAT
THROUGH A TEAM EFFORT INCLUDING
THE LOS ANGELES CITY ATTORNEY'S
OFFICE WHO PLAYED A SIGNIFICANT
ROLE IN THAT -- AND WE HAD THE
FEDERAL PARTNER THE OCC WHO WAS
PART OF THAT AS WELL BUT YES WE
WERE ABLE TO EXPOSE.
WHAT WAS THE SIGNIFICANT SCANDAL
AND ONE THAT STILL SHOCKS A LOT
OF PEOPLE THAT THERE COULD HAVE
BEEN MILLIONS OF CREDIT CARD AND
BANKING ACCOUNTS?
OPEN BY EMPLOYEES OF WELLS FARGO.
WITHOUT THE KNOWLEDGE OR CONSENT
OF CUSTOMERS I MEAN WHAT WE
THINK ABOUT WHEN WE PUT OUR
MONEY IN A BANK WE ASSUME THAT
IT WILL BE KEPT SAFE THERE.
THAT THEY WON'T DO ANYTHING WITH
IT THAT WE DON'T INTEND THEM TO
DO AND THAT WILL KNOW EVERYTHING
THAT'S HAPPENING WITH OUR MONEY
THAT'S THE KIND OF TRUST THAT
THIS RELATIONS BUILD UPON.
AND WELLS FARGO VIOLATED THAT
TRUST VERY SEVERELY I THINK
WHICH CAUSED ALL THE OUTRAGE.
OKAY WELL IT'S MY UNDERSTANDING
THAT -- CFPB WASN'T REALLY
TERRIBLY SUCCESSFUL IN EXPOSING
THAT PRIDE AND THAT WAS PART OF
THE FAILURE OF THE DEPARTMENT IN
GENERAL -- THERE YOU MAY
DISAGREE WITH THAT ASSESSMENT
BUT I ALSO KNOW THAT THE I. G.'S
OFFICE ADMONISHED TO SEE A P. B.
ROUTINELY FOR GETTING IN THE WAY
OF CONGRESSIONAL OVERSIGHT.
AND I DON'T KNOW IF YOU WANT TO
COMMENT ON THAT -- SURE LIKE A
COMMON IN BOTH OF THOSE THINGS
WYOMING LINED I'D LIKE TO FINISH
MY SENTENCE RUN YOU CAN
CERTAINLY RESPOND I'D LOVE TO
HEAR THE RESPONSES -- IN
ADDITION I GUESS I'M I'M
STRUGGLING TO UNDERSTAND --
YOU'VE COME HERE TODAY TO
TESTIFY NEED TESTIFIED IN THE
PAST -- BUT I FEEL AS THOUGH --
YOUR COMMENTS IN YOUR AGENDA OUR
ART ADAM.
MORE POLITICALLY BIASED THEN --
THEY SHOULD BE IN YOU'VE COME
HERE -- TO DRAW THE THE THE
CLEAR LINE OF DISTINCTION
BETWEEN -- YOUR POLITICS AND THE
POLITICS THAT ARE CURRENTLY
RESIDE IN THE WHITE HOUSE AND
I'M NOT SURE THAT THAT'S
TERRIBLY HELPFUL WE ALL I THINK
ON THIS COMMITTEE WANNA MAKE
SURE THAT PEOPLE ARE TAKING
ADVANTAGE OF AND EXPLOITED.
AND I MOST CERTAINLY AGREE WITH
YOU THAT WE HAD SOMEONE'S OUT
THERE SOME PRODUCTS THAT WERE
DEVASTATING -- TO MANY AMERICANS
I DON'T DISAGREE WITH YOU THERE
BUT I I WORRY THAT YOUR COMMENTS
HERE TODAY AND PERHAPS COMMENTS
IN THE PAST -- ARE ARE ARE
COMING FROM A PLACE INSIDE OF
YOU THAT IS VERY POLITICALLY
MOTIVATED AND REALLY THAT'S NOT
WHAT WE'RE HERE TO DO TODAY I
KNOW THERE IS.
SOME VERY SERIOUS SEXUAL
HARASSMENT CLAIMS MADE AGAINST --
YOUR DEPARTMENT IN YOUR OFFICE I
MEAN I KNOW THE INSPECTOR
GENERAL HAD SOME ISSUES WITH
YOUR DEPARTMENT SO THERE ARE A
LOT OF THINGS RIGHT THERE'S JUST
THIS CLOUD.
I FEEL LIKE THAT -- YOU KNOW
WHICH IS HANGING ABOVE YOU WHEN
YOU COME IN HERE AND YOU START
TO POINT FINGERS BACKWARDS --
INSTEAD OF FOCUSING ON THE
FUTURE AND WHAT THINGS -- CAN BE
DONE AND WHAT WHAT SUCCESS IS
THERE WERE IN THE PAST SO YOU'RE
WELCOME TO COMMENT ON THERE'S I
DON'T KNOW THAT WILL NECESSARILY
AGREE -- BUT I JUST WANTED I
FELT IT WAS IMPORTANT THAT --
BOTH SIDES OF THE STORY WERE
EXPRESSED HERE TODAY AND THAT
YOU KNEW -- CLEARLY BY NOW
YOU'VE FIGURED OUT THAT I'M A
REPUBLICAN -- BUT I KNOW THAT
YOU HAD SOME DISPARAGING REMARKS
TO MAKE.
ABOUT REPUBLICANS IN THE PAST
REFERENCES COMMENTS ABOUT ****
THAT I KNOW YOU WALKED BACK BUT
I THINK THAT.
I NEVER AYE ONES ARE QUESTION
HERE YEAH I'M WRAPPING UP MY
COMMENTS.
X. BUT I WANT YOU TO UNDERSTAND
THAT.
ON IN THIS PARTICULAR COMMITTEE
WE THERE IS NO ROOM FOR
POLITICAL BIAS WHAT WE'RE TRYING
TO DO IS ACCOMPLISH THE SAME TAX
WHICH IS.
MAKE SURE PEOPLE ARE PROTECTED.
THANK YOU OKAY WELL WELL IF I
MAY.
I ALSO THINK IT DOESN'T MATTER
TO ME WHETHER YOU'RE REPUBLICAN
OR DEMOCRAT OR INDEPENDENT I
DON'T THINK THAT SHOULD MATTER.
YOUR CONSUMER YOUR SOMEBODY WHO
PARTICIPATES IN OUR ECONOMY AND
YOU HAVE RIGHT TO BE TREATED
FAIRLY LIKE EVERYBODY ELSE
SHOULD BE.
AND THAT'S WHAT THIS PROTECTIONS
ABOUT SO I AGREE WITH YOU THAT
REALLY SHOULD NOT BE POLITICAL
I'D WISH THAT IT WOULD NEVER
BECOME POLITICAL IN WASHINGTON
BUT THERE WERE A LOT OF PEOPLE
WHO.
TRIED TO POLITICIZE IT SOME OF
THE THINGS THAT YOU REFERRED TO
WERE ACTUALLY NOT TRUE THEY WERE
PART OF THE POLITICAL THEATER
THAT SURROUNDED.
THE BEER AT TIMES WE NEVER HAD
ANY SEXUAL HARASSMENT COMPLAINTS
YOU SAID THAT WOULD THAT WOULD
NOT -- WE DID COMPLY WITH
CONGRESSIONAL OVERSIGHT NOT
ALWAYS TO THEIR SATISFACTION BUT
WE PRODUCE THOUSANDS OF
DOCUMENTS TO THEM -- AND AND
CONSTANTLY SOUGHT TO RESPOND. TO
THEIR DEMANDS.
IN IN TERMS OF WHETHER -- I SAW
THIS IS POLITICAL OR NOT I
SAUCES TRYING TO WORK TO PROTECT
CONSUMERS -- YOU AND YOUR FAMILY
AND AND YOUR FAMILY'S FAMILY AND
EVERYBODY ELSE HERE AND THEIR
FAMILIES FAMILY THAT'S WHAT WE
WERE TRYING TO DO.
AND BY THE WAY WE RESPONDED TO
LOTS AND LOTS OF COMPLAINTS THAT
WERE FORWARDED TO US FROM THE
OFFICES OF REPUBLICAN
CONGRESSMEN AND AND DEMOCRATIC
CONGRESSMAN.
DIDN'T MATTER TO US THEY WERE
AMERICANS THEY WERE PEOPLE WE
WERE SUPPOSED TO SERVE AND WE
WORK TO SERVE THEM.
AND SO -- AND MAYBE WE CAN FIND
SOME COMMON GROUND HERE AROUND
HERE YOUR POINT WHICH I VERY
MUCH AGREE WITH AND ACCEPT.
THAT THIS SHOULD BE ABOUT
PROTECTING PEOPLE ARE AND MAKING
REASONABLE JUDGMENTS ABOUT HOW
BEST TO DO THAT AND I DO THINK
AGAIN CALIFORNIA CAN BE A LEADER
IN THAT.
IT WOULD BE REALLY IMPORTANT TO
THE COUNTRY FOR CALIFORNIA TO TO
TAKE ON THAT ROLE.
THANK YOU.
THANK YOU NUMBER AT GRAYSON THEN
CERVANTES.
THANK YOU FOR REPEAT CHAIR AND
MADAM CHAIR I I JUST WANT TO
FOLLOW UP ON SOMETHING THAT.
IS IMPORTANT TO WERE WHERE WE'RE
AT TODAY AS FAR AS CALIFORNIA
AND THE PRESSURES.
THAT WERE FACING -- IN THE STATE
AS FAR AS THE SMALL DOLLAR
LENDING AND THE TRIPLE DIGIT
RATE.
THAT -- IF -- IN YOUR EXPERIENCE
WE HEAR THAT RATE CAPS WILL LEAD
TO LESS ACCESS FOR PEOPLE AND
THEN PUSH THEM INTO AN
UNREGULATED INTERNET.
TYPE ENVIRONMENT OR MARKET OF
LENDING.
IN YOUR EXPERIENCE OR IN YOUR
PERSPECTIVE WHAT WHAT DO YOU OR
HOW DO YOU SEE CONSUMER
CONSUMERS RESPONDING TO A RATE
CAP AND HAVING A MORE
ADVANTAGEOUS REGULATED MARKET.
YEAH I THINK WE CAN AGAIN WE CAN
LOOK UPON THE EXPERIENCE OF
THEIR SIXTEEN OR SEVENTEEN
STATES THEY HAVE A RATE CAP IT'S
ABOUT NINETY MILLION AMERICANS --
AND PEOPLE IN THOSE STATES DON'T
HAVE ACCESS TO THESE HIGH COST
PAYDAY LOANS.
AND THEY TEND TO DO WHETHER
THINKS THEY CAN GET A PAYMENT
PLANS FROM UTILITY COMPANIES
THEY CAN GET.
LOANS FROM CREDIT UNIONS WHICH
FILL THE GAPS ENORMOUSLY IN THIS
AREA AND COMMUNITY BANKS OFTEN
WILL MAKE SUCH LOANS.
THEY CAN USE CREDIT CARDS AND
CREDIT CARD VANCE'S WHICH ARE
NOT CHEAP BUT CONSIDERABLY LESS
EXPENSIVE THAN A PAYDAY LOAN --
THERE ARE SOME COMMUNITY AND AND
THAT CHURCH BASED OPTIONS THAT
PEOPLE CAN DO OR GO TO FRIENDS
AND FAMILY LOTS OF DIFFERENT
THINGS THE UNREGULATED INTERNET
IS REALLY NOT AN ANSWER BECAUSE
IT IS ILLEGAL. FOR A COMPANY TO
MAKE LOANS INTO A STATE WITH
RATE CAPS IF THOSE LOANS VIOLATE
THE RATE CAPS NOW IT'S NOT
ALWAYS EASY TO ENFORCE THAT.
AGAINST OUT OF STATE OR EVEN
INTERNATIONAL A COMPANIES MANY
OF WHICH ARE FRAUDULENT TO THEIR
CORE -- BUT THAT'S THAT'S THE
LAW AS IT STANDS SO AGAIN THAT'S
NOT AN EASY ISSUE -- BUT WHAT I
WOULD -- RECOMMEND IS WE FOUND A
LOT OF INSIGHT ON THOSE ISSUES
FROM FAITH BASED ORGANIZATIONS
FROM.
MINISTERS AND PRIESTS AND NUNS
AND RABBIS WHO HAD MEMBERS OF
THE CONGREGATION COME TO THEM
AND DESCRIBE THEIR EXPERIENCES.
AND I THINK THAT SOME OF THAT
INSIGHT WOULD BE HELPFUL IN
TRYING TO UNDERSTAND HOW PEOPLE
DO COPE WITH THESE WITH THESE
ISSUES AND THEY DO.
BUT PUTTING THEM INTO THREE
ENTERED 4% LOANS DOESN'T BUILT
THEIR FINANCIAL FUTURE IT JUST
DOESN'T THANK YOU.
DECEMBER CERVANTES THANK YOU
THANK YOU FOR BEING HERE TODAY
AND JOINING US IN THIS
CONVERSATION FOR THE PAST DECADE
THE DEPARTMENT OF DEFENSE HAS
pMEMBERS AND THEIR FAMILIES.
ARE FOUR TIMES MORE LIKELY TO BE
TARGETED BY PREDATORY LENDING
UNTIL RECENTLY HAS BEEN UNDER
THE MILITARY LENDING ACT THE
DEPARTMENT OF DEFENSE REQUIRED
SUPERVISORY.
REQUIREMENTS UNDER THE C. F. P.
P. B. CAN YOU SHARE WITH US THE
RAMIFICATIONS OR IMPACTS THAT.
ARE THIS HAS HAD TO SERVICE
MEMBERS VETERANS AND THEIR
FAMILIES AND WHAT WE CAN DO IS A
STATE TO ADDRESS IT.
YEAH BUT IT'S IT'S A GREAT
QUESTION IT'S A CONCERN
CURRENTLY I THINK.
IT'S ALWAYS BEEN THE CASE THAT
SERVICE MEMBERS ESPECIALLY ON
SERVICE MEMBERS ARE TARGETED BY
PREDATORY LENDERS. FOR TWO
REASONS ONE IS MANY OF THEM ARE
YOUNG THEIR WAY FROM HOME FOR
THE FIRST TIME IF YOU.
LOOK AT THE MAPPING OF WHERE
LENDERS SET AROUND MILITARY
BASES THEY CONGREGATE THERE THEY
KNOW THEY HAVE A GUARANTEED
PAYCHECK FROM THE US GOVERNMENT
SO THEY ARE RIPE TARGETS -- FOR
ABUSE AND THAT'S I BELIEVE MY
BIG PART OF WHY THE MILITARY
LENDING ACT WAS PASSED WHICH
CAPS THE RATE ON LOANS -- TO
SERVICE MEMBERS -- THESE ARE
PEOPLE WHO ARE GONNA END UP
DEPLOYING THERE'S A LOT OF
TRAINING THAT WE'RE PUTTING INTO
THEM AND IF THEY END UP WITH
SOME PROBLEM WITH THEIR KIDS
SECURITY CLEARANCE HAS FINANCIAL
PROBLEMS CAN LEAD THEM.
TO THAT'S A VERY EXPENSIVE THING
FOR US TO LOSE THAT SERVICE
MEMBER AND HAVE TO TRAIN SOMEONE
ALL OVER AGAIN TO GO INTO THEIR
PLACE OR GOD FORBID THAT THEY BE
DISTRACTED FROM THEIR DANGEROUS
MISSION OVERSEAS BY TRYING TO
DEAL WITH SOMETHING BACK HOME --
THAT -- THEY REALLY SHOULDN'T
HAVE TO DEAL WITH SO THAT'S THE
THAT'S THE THINKING THAT WENT
INTO THE MILITARY LENDING ACT.
NOW THE THE THE POINT YOU'RE
RAISING IS THAT RIGHT NOW THIS
ONE OF THE THINGS THE CFPB IS
WALKING BACK.
THEY HAVE THE ABILITY TO ENFORCE
THE MILITARY LANDING ACT -- THE
QUESTION IS WHETHER THEY HAVE
THE AUTHORITY TO USE PREVENTIVE
MEASURES SUCH AS SUPERVISING
ENTITIES TO MAKE SURE THEY'RE
COMPLYING WITH THE MILITARY
LANDING ACT.
I SHOULD THINK WE WOULD WANT TO
HAVE THEM USE THE PREVENTIVE
SUPERVISORY MEASURES TO ROOT OUT
THESE PROBLEMS RATHER THAN.
PUTTING THE ONUS ON SERVICE
MEMBERS TO HAVE TO COMPLAIN TO
THEM ABOUT PROBLEMS THAT THEY'VE
ALREADY RUN INTO -- I'VE HEARD
IT HEARD THE COMPARISON MADE TO
PREVENTING OF FIRE RATHER THAN
PULLING SOMEBODY OUT OF A FIRE
AND YOU DON'T HAVE TO PULL
SOMEBODY OUT OF A FIRE WHEN
THEY'RE A SERVICE MEMBER WHO MAY
BE SERVING OVERSEAS ARE IN A
DANGEROUS OCCUPATION --
IMPORTANT TO THE DEFENSE OF OUR
COUNTRY SO THE PREVENTIVE
MEASURE THAT THEY SEE A BABY'S
WALK BACK FROM I ACTUALLY THINK
IS REALLY THE FIRST THING THEY
SHOULD BE DOING HERE.
AND I'M REALLY PUZZLED AS TO WHY --
THEY HAVE CHOSEN -- TO TO
RETREAT FROM THAT ROLE I THINK
IT DOESN'T REALLY MAKE A LOT OF
SENSE [inaudible]
THANK YOU [inaudible]
AT MR CORD RATE.
YOU'VE GIVEN US AN OVERVIEW OF A
NUMBER OF ISSUES THAT THE CFPB
WORKED ON SPECIFICALLY ARE THERE.
AREAS THAT DESERVED HEIGHTENED
AWARENESS FOR THE STATE.
WELL I THINK THERE'S QUITE A FEW
AREAS -- I DO THINK THAT STUDENT
LOAN SERVICING IS AN AREA OF
HEIGHTENED PORTS FOR THE STATE'S
I THINK SMALL DOLLAR LENDING IS
AN AREA OF HIGH IMPORTANCE FOR
THE STATE'S.
I THINK DEBT COLLECTION IS AN
AREA OF HEIGHTENED IMPORTANCE
FOR THE STATE'S.
THERE'S SEVENTY MILLION
AMERICANS AND IF YOU BREAK THAT
DOWN FOR CALIFORNIA IT'S
PROBABLY -- EIGHT OR TEN MILLION
CALIFORNIANS WHO MIGHT HAVE A
DEBT OUTSTANDING AND COLLECTION
IN ANYTIME OR SUPPOSEDLY
SOMETIMES THOSE ARE WRONG THEY
ACTUALLY DON'T REALLY -- THAT
DEBT WHERE THE NUMBER NUMBERS
THAT ARE BEING QUOTED IN THEM
ARE WRONG.
AND YET THEY CAN BE SUBJECT TO A
GREAT DEAL OF HARASSMENT MUCH OF
WHICH IS AGAINST THE LAW BUT
DEBT COLLECTORS ARE VERY --
AGGRESSIVE AT TIMES AND THEY
WILL VIOLATE THE LINE OF PEOPLE
DON'T KNOW HOW TO PROTECT
THEMSELVES IT'S VERY DIFFICULT
SITUATION FOR THEM SO I THINK
THAT COLLECTIONS ANOTHER AREA
WHERE THE STATE'S COULD DO MORE --
I THINK SOME OF THE ENFORCEMENT
OF THE MORTGAGE LAWS -- AT THE
STATE LEVEL -- THE REAL ESTATE
SETTLEMENT PRACTICES ACT IS VERY
HIT OR MISS IN TERMS OF HOW WELL
THAT'S ENFORCED.
AT THE STATE LEVEL UP SO THERE'S
THERE'S A VARIETY OF PLACES
WHERE I THINK STATES.
THAT COULD BE MORE BUT I THINK
THAT.
RATHER THAN ME TRYING TO GUESS
AT WHAT THOSE ARE.
IF YOU HAD A CALIFORNIA UNIT
THAT WAS FOCUS VERY SPECIFIC ON
THIS ISSUE AND THEY WERE HEARING
FROM CALIFORNIA'S ABOUT EXACTLY
WHAT KINDS OF PROBLEMS THEY WERE
FACING IN THEIR LIVES.
THEN I THINK THEY WOULD HAVE A
VERY GOOD FINGER ON THE PULSE OF
HOW THEY COULD BE MORE EFFECTIVE
IN PROTECTING CALIFORNIA'S
LOOKING OUT FOR THEM.
THANK YOU.
NOW THERE'S A TOPIC WE HAVEN'T
REALLY TALKED ABOUT BUT A TOPIC
THAT'S EMERGING -- EMERGING HERE
IN.
NOT JUST IN CALIFORNIA BUT
REALLY IT ACROSS THE WORLD IN
ITS FIN TECH -- CAN YOU.
THINK YOU TO SHARE YOUR THOUGHTS
ON HOW STATE.
CAN DEAL -- WITH THE EMERGING
FINTECH SPACE -- PARTICULARLY
BECAUSE THERE REALLY ARE NO
LAWLER PRECEDENTS AROUND AND NEW
INNOVATIVE TECHNOLOGY WHICH CAN
BE VERY HELPFUL -- BUT CERTAINLY
WE WE DON'T KNOW AT WHAT
DIRECTION IT CAN OR WILL GO.
YEAH I I WOULD SAY THIS IS ONE
OF THE ISSUES I'M NOT SURE WE
EVER FELT WE FULLY FIGURED OUT --
CLEARLY WITH THE NEW INNOVATIVE
PROVIDERS YOU WANT TO GIVE THEM
SOME RUNNING ROOM TO SEE IF THEY
CAN BUILD A BETTER MOUSE TRAP
AND BETTER SERVE CONSUMERS.
AND YOU DON'T WANT TO STIFLE
INNOVATION.
ON THE OTHER HAND THEY ALL HAVE
TO GET LICENSES TO OPERATE AT
SOME POINT IF THEY'RE GOING TO
ACTUALLY SERVE THE CONSUMER
PUBLIC.
AND IT GIVES YOU SOME ABILITY TO
SUPERINTEND THEM AND SEE WHAT
THEY'RE DOING WE TRIED -- TO
APPROACH THIS WITH A GREAT DEAL
ABOUT REACH WHERE WE WOULD HAVE
SESSIONS BACK AND FORTH AND WE
CAN UNDERSTAND WHAT THEY WERE
DOING -- WE TRIED TO FOCUS THEM
ON CONSUMER FRIENDLY PRACTICES --
BUT YOU KNOW UNLESS SOMEBODY'S
VIOLATING THE LAW THEY CAN SERVE
CONSUMERS.
RELATIVELY POORLY OR THEY CAN
SERVE THEM WELL IT'S REALLY UP
TO THEM TO COMPETE THAT WAY IN
THE FINANCIAL MARKET PLACE -- IF
THEY'RE SERVING CONSUMERS BETTER
THEY SHOULD BE DRAWING BUSINESS
TO THEMSELVES THAT'S WHY I THINK.
A PROGRESSIVE BANKING AN ETHICAL
OF FINANCIAL SERVICES TEND TO
WIN OUT IN THE LONG RUN.
BUT IN THE SHORT RUN THEIR
PRACTICES PEOPLE CAN ENGAGE IN
THAT CAN GAIN SOME MARKET SHARE
FOR TIME THEY PROBABLY WON'T WIN
OUT THE LONG RUN.
AND THE QUESTION IS WHETHER THE
REST THE MARKET FOLLOWS HIM IN A
RACE TO THE BOTTOM THAT HAPPENED
WITH MORTGAGE LENDING AND IT LED
TO THE FINANCIAL CRISIS -- BUT
IN TERMS OF FINTECH -- I'VE SEEN
A LOT OF FINTECH PROVIDERS THAT
I THINK ARE CONSUMER FRIENDLY
AND THEY ARE COMING UP WITH WAYS
TO PROVIDE.
MORE SPEED AND EASE AND
CONVENIENCE FOR CONSUMERS.
I WANT THEM TO HAVE SOME
LATITUDE TO PURSUE THOSE THINGS
AND SEE IF THEY CAN IMPROVE THE
MARKET PLACE.
ON THEIR OWN AND I DON'T WANT
THEM TO BE OVERSHADOWED BY TOO
MUCH OVERHANG OF GOVERNMENT
REGULATIONS -- IF THEY'RE
UNCLEAR OR IF THEY'RE CONFUSING
UP BUT THEY SHOULD HAVE TO
COMPLY WITH THE LAW LIKE
EVERYBODY ELSE NOBODY SHOULD BE
ABLE TO WIN IN THE MARKETPLACE
BECAUSE THEY DON'T HAVE THE SAME.
LEGAL OBLIGATIONS AS EVERYBODY
ELSE THEY SHOULD BE ON A LEVEL
PLAYING FIELD.
THANK YOU AND I'D LIKE TO THANK
YOU FOR YOUR TESTIMONY I THINK
IT'S BEEN PARTICULARLY HELPFUL
IN THINKING THROUGH I KNOW THAT
YOU'RE AN INDIVIDUAL -- WHO HAD
THE CAPACITY WORKING WITH BOTH
RED AND BLUE STATES -- AND
THEY'RE AT THIS AT WHAT I'VE
LEARNED FROM BEING IN THE IN THE
SPACES THAT IT'S NOT A PARTISAN
ISSUE -- THAT FINANCIAL SERVICES --
ARE ISSUES THAT IMPACT AS YOU
SAID CONSUMERS -- AND THAT IS IT
REALLY THE GOAL HERE AND HOW WE
PROTECT CONSUMERS ON HOW WE
ENSURE CONSUMERS -- ARE ABLE TO
LIVE IN OUR STATE TO IN OUR IN
OUR COUNTRY IN A WAY -- THROUGH
FINANCIAL PRODUCTS THAT IS
RESPONSIBLE IN A WAY THAT HELPS
THEM GET TO THEIR GOAL AS
OPPOSED TO INHIBITING THEM AND
MAKING THE IMPACT OR
CONSEQUENCES OF SOME OF THESE
NEGATIVE PRODUCTS -- GREATER --
AND IN REALLY INHIBITS THEY'RE
MOVING FORWARD AT SO THANK YOU
VERY MUCH FOR BEING HERE FOR
YOUR TESTIMONY AND FOR YOUR
FEEDBACK AN INSIGHT.
OKAY I COULDN'T AGREE WITH YOU
MORE IN WHAT YOU JUST SAID I
THINK ALL OF YOU SAID IN IN YOUR
OWN WAYS THAT THAT CONSUMERS
DESERVE TO BE PROTECTED AND IS
NOT A POLITICAL ISSUE IT'S NOT A
PERSONAL ISSUE.
IT'S A MATTER OF FAIRNESS IN OUR
SOCIETY SO THANK YOU THANK YOU.
NEXT -- TO WE WILL HAVE A CHRIS
PETERSEN FORMER SPECIAL ADVISER
IN THE OFFICE OF THE DIRECTOR.
AT THE CONSUMER FINANCIAL
PROTECTION BUREAU WHO WILL TALK
TO US ABOUT THE PAYDAY LENDING
RURAL.
THANK YOU CHRIS FOR BEING HERE
WITH US.
AND YOU ARE WELCOME TO BEGIN
YOUR TESTIMONY.
WELL THANK YOU CHAIR LEAVE ON
AND MEMBERS OF THE COMMITTEE
IT'S AN HONOR TO BE HERE TODAY --
MY NAME IS CHRISTOPHER PETERSON
I'M A I'M A LAW PROFESSOR AT THE
UNIVERSITY OF UTAH IN SALT LAKE
CITY -- BUT AND I ALSO -- AND AS
A SENIOR FELLOW AT THE CONSUMER
FEDERATION OF AMERICA IN
WASHINGTON DC -- FOR ABOUT FOUR
YEARS IT TOOK SOME TIME OFF FROM
MY CAREER AND AND WORKED AT THE
CFPB.
PLANNED ON WORKING FOR A YEAR
AND ADD UP SAYING FOR LONGER
ORIGINALLY I WORKED IN THE
OFFICE OF ENFORCEMENT.
WHICH IS THE OFFICE THAT
ENFORCES THE LAW STARTS FEDERAL
INVESTIGATIONS AND SITES.
BANKS OTHER FINANCIAL
INSTITUTIONS FOR BREAKING THE
RULES AND MY JOB WAS TO LEAVE
THE ISSUE TEAMS THAT FOCUSED ON
SMALL DOLLAR LOANS PAYDAY LOANS
VEHICLE TITLE LOANS SIMILAR
FORMS OF CREDIT AS WELL AS
CHECKING ACCOUNTS.
AND PAYMENT SYSTEMS SIR IS
SIMILAR TYPES OF FINANCIAL
PRODUCTS SO WAS NOT WITH THE
LITIGATORS BUT I HELPED ADVISE
THE ENFORCEMENT OFFICE ON HOW TO
DESIGN THEIR LEGAL THEORIES AND
CASES AND IDENTIFIED POTENTIAL.
ON SUBJECTS OF INVESTIGATIONS
THOUGH IN LATER ON IT MANAGED TO
SOMEHOW CONVINCE DIRECTOR
CORDRAY TO TO LET ME BE AN
ADVISER TO HIM IN HIS FRONT
OFFICE -- FOR A COUPLE YEARS AS
WELL BUT I ALSO -- GOT SENT OVER
TO THE DEPARTMENT OF DEFENSE AND
WORKED AT THE PENTAGON FOR A
PERIOD OF TIME -- ADVISING THE
GENERAL COUNSEL OF THE UNITED
STATES DEPARTMENT OF DEFENSE ON
THE MILITARY LENDING ACT.
AND ASSISTING THEM IN -- WRITING
THE REGULATIONS THAT IMPLEMENT
THE NATIONAL USE WE LIMIT ON
LOANS TO MILITARY SERVICE
MEMBERS -- AND WAS VERY PROUD OF
THAT IT AND SEE THAT IS ONE OF
THE HIGHLIGHTS OF MY CAREER.
WELL I'VE BEEN ASKED TO TALK
ABOUT PAYDAY LENDING TODAY AND
SIMILAR KINDS OF CREDIT AND I'M
GONNA START OUT WITH A LITTLE
BIT HISTORY AND BACKGROUND ABOUT
THE PAYDAY LENDING INDUSTRY.
THAN A TALK ABOUT THE C. F. P.
BEES WORK THEN LASTLY I'M GONNA
TALK ABOUT THINGS THAT
CALIFORNIA MY TO TO TRY AND
IMPROVE THAT MARKET PLACE.
SO FIRST OFF ON HISTORY IF I
COULD I'D LIKE TO BEGIN WITH TWO
QUICK STATISTICS THAT I THINK
WILL HELP SET THE TABLE AND HELP
YOU UNDERSTAND.
THE POTENTIAL PROBLEMS IN THAT
MARKET PLACE THE FIRST TO TO
STICK IS THE AVERAGE INTEREST
RATE OF THE NEW YORK CITY LE
COSA NOSTRA LOAN SHARKING
SYNDICATES THE ORGANIZED CRIME
FAMILIES AT THE HEIGHT OF THEIR
POWER IN THE NINETEEN SIXTIES.
THEIR AVERAGE INTEREST RATES
WERE TWO HUNDRED AND 50% VERY
EXPENSIVE LOANS HISTORICALLY --
BUT THE SECOND STATISTIC IS THE
AVERAGE INTEREST RATE ON PAYDAY
LOANS AT STOREFRONT LOCATIONS
ALL ACROSS AMERICA.
TODAY AND THAT AVERAGE INTEREST
RATE IS ABOUT FOUR HUNDRED AND
2410025% SO NEARLY TWICE AS
EXPENSIVE AS THE MOB CHARGED.
THAT IS A SIGNIFICANT HISTORICAL
FACT THAT'S HARD TO HIDE FROM NO
MATTER WHAT SIDE OF THE AISLE NO
MATTER WHERE YOU'RE FROM.
AND I THINK IT HISTORICALLY IF
YOU GO BACK TO THE EARLIEST
FOUNDATIONS OF OUR REPUBLIC ALL
THIRTEEN ORIGINAL COLONIES YOU
KNOW NEW YORK VIRGINIA SOUTH
CAROLINA GEORGIA.
THEY ALL HAD INTEREST RATE CAPS
EVERY SIGNATORY TO THE
DECLARATION OF INDEPENDENCE AND
EVERY A DELEGATE TO THE
CONSTITUTIONAL CONVENTION
RETURNED TO STATES THAT HAD
INTEREST RATE CAPS.
THEY WERE VERY LOW BY TODAY'S
STANDARDS THEY RANGE FROM 5% TO
UP AROUND NINE OR 10% 6% WAS THE
NORM BACK THEN AT THE FOUNDING
OF OUR REPUBLIC.
FREEDOM BACK IF THE FOUNDING OF
OUR REPUBLIC DID NOT MEAN THAT
YOU COULD CHARGE ANY INTEREST
RATE YOU WANT TO POOR PEOPLE
BENJAMIN FRANKLIN GEORGE
WASHINGTON THOMAS JEFFERSON.
WAS TESTED IN TOLERATE THESE
KIND OF LOANS THEY BANNED THEM
OUT RIGHT WITH VERY LOW INTEREST
RATE CAPS WELL AS TIME WENT ON
ALL STATES HAD INTEREST RATE
CAPS THROUGHOUT THE EARLY PERIOD
OF THE REPUBLIC IN THE BEGINNING
THE TWENTY CENTURY BE STARTED
REFORM OUR CONSUMER FINANCIAL
SERVICES MARKETS.
BY ALLOWING HIGHER INTEREST
RATES IN WHAT WERE CALLED
SPECIAL USE REALIZE AND THEY
INCREASED INTEREST RATES
TYPICALLY IN THE TWENTIETH
CENTURY SO BETWEEN EIGHTEEN TO
AS HIGH AS 42% BUT 36% WAS.
USUALLY SEEN AS THE UPPER
BOUNDARY THROUGHOUT THE VAST
MAJORITY OF THE TWENTY CENTURY.
SO THE GREATEST GENERATION SO
CALLED GREATEST GENERATION THAT
WENT AND SURVIVE THE GREAT
DEPRESSION AND FOUGHT THE SECOND
WORLD WAR -- IN JAPAN GERMANY
THEY ALL CAME HOME AND THEY HAD
INTEREST RATE CAPS THE
PROHIBITED.
A PAYDAY LOANS VEHICLE TITLE
LOANS BUT THEN LATER ON ABOUT
TWENTY FIVE OR THIRTY YEARS AGO
THINGS STARTED TO CHANGE A SMALL
DOLLAR LANDINGS TO INDUSTRY A
MERGE THAT SAID THEY WERE GONNA
MAKE SHORT TERM LOANS BY HOLDING
ON TO SOMEBODY'S THESE ARE JUST
SHORT TERM LOANS.
AND YOU JUST PAYING A FEE TO GET
A HOLD ON TO THE CHECK IN ITS
NOT REALLY ALONE ANYWAY YOU'RE
JUST HOLDING ONTO A CASHING A
CHECK.
RETURNED OUT THAT THEY'RE NOT
SHORT TERM LOANS EVERY STUDY
THAT HAS EVER LOOKED AT IT
INCLUDING BOTH INDUSTRY
SPONSORED STUDIES ACADEMIC
STUDIES AND ALSO EVENTUALLY THE
CONSUMER FINANCIAL PROTECTION
BUREAU WHICH I HAD THE ABILITY
TO GET MORE DATA ON THIS THAN.
EVER BEFORE LITERALLY IN THE
HISTORY OF THE PLANET FOUND THAT
THESE LOANS ARE NOT SHORT TERM
LOANS THAT IN FACT THEY GET
ROLLED OVER AGAIN AND AGAIN AND
AGAIN AND THE AVERAGE BAR WERE
ACTUALLY BARS ABOUT TEN TIMES
PER YEAR.
AND PAYS BACK NEARLY THE SAME
AMOUNT JUSTIN INTEREST BEFORE
THEY EVEN START MAKING A
PROGRESS ON THE PRINCIPAL
BALANCE.
AND THE INTEREST RATES ON THESE
LOANS ARE TRULY EXTRAORDINARY I
WISH I COULD SHARE WITH YOU SOME
OF THE SUFFERING THAT I'VE SEEN
IN MY OWN WORK AS AN EXPERT
WITNESS IN WORKING WITH CONSUMER
RIGHTS ORGANIZATIONS AND LEGAL
AID ORGANIZATIONS AROUND THE
COUNTRY.
THE SINGLE MOMS THAT WEEP ON THE
STAND WHEN THEY TALK ABOUT HOW
THEY CAN'T PUT FOOD ON THE TABLE
BECAUSE THEY'RE STRUGGLING TO
JUST MAKE INTEREST PAYMENTS.
THE CONSTRUCTION WORKERS THE
TEACHERS THE POST OFFICE WORKERS
THEY'RE JUST TRYING TO MAKE ENDS
MEET BUT ARE HAVING A HARDER
TIME DOING IT BECAUSE WELL BUT
BECAUSE THEIR SERVICING A LONG
TERM 41005100% INTEREST RATE
LOAN.
HI BEASTLY THAT'S NOT GOOD FOR
YOU AND THAT'S ALSO WHAT THE
EMERGING SOCIAL SCIENTIFIC
EVIDENCE AS MORE AND MORE
EVIDENCE IS COMING BACK IN STUDY
AFTER STUDY SUGGESTING THAT
PAYDAY LOANS.
ARE ON HEALTHY FOR YOU THE CAUSE
STRESS THEY CAUSE ANXIETY IN
FACT A UNIVERSITY OF CHICAGO
STORY A STUDY THAT JUST CAME OUT
ABOUT THREE MONTHS AGO.
LOOKED AT SUICIDE DATA IN
HOSPITALS WHERE IN COMPARED
SUICIDE REPORTS WHERE IN IN
LOCATIONS WHERE PEOPLE HAD
ACCESS TO PAY LOANS AND PLACES
WHERE THEY DIDN'T.
AND THEY FOUND A SIGNIFICANT
CAUSAL CORRELATION BETWEEN FIRST
TIME PAYDAY LOAN USE AN
ATTEMPTED SUICIDE.
IT MAKES A LOT OF COMMON SENSE
DOESN'T IT IF YOU'RE A SINGLE
MOM MARKETS SUCTION WORKER AND
YOU REALIZE THAT YOU DON'T HAVE
ENOUGH MONEY TO MAKE IT THE ENDS
MEET AT THAT THE END OF THE
MONTH.
IT'S EASY TO START FEELING
HOPELESS AND TO GIVE UP AND
THAT'S WHAT'S HAPPENING TO TOO
MANY AMERICANS ALL ACROSS OUR
COUNTRY.
LET ME TELL YOU NOW SECOND ABOUT
A LITTLE BIT ABOUT THE C. F. P.
BEES WORK ON CONSUMER ON ON A
HIGH COST LANDING.
INSTRUCTOR CORDRAY SAID.
THE CFPB DID NOT HAVE THE
AUTHORITY TO IMPLEMENT IN
STRAIGHT CAP CONGRESS DID NOT
PROVIDE FOR THAT BUT WHAT IT DID
SAY WAS THAT THE CFPB WAS
LEGALLY ENTITLED TO IDENTIFY AND
DEFINE AND PROHIBIT.
UNFAIR DECEPTIVE OR ABUSIVE
PRACTICES AND SO WHILE I WAS AT
THE CFPB DIRECTOR CORDRAY LED AN
EFFORT TO DO THE MOST
COMPREHENSIVE OUTREACH AND STUDY
OF PAYDAY LENDING IN THE HISTORY
OF OUR COUNTRY.
WE DID STUDY AFTER STUDY WE
ACTED CONSULTATIONS WITH SMALL
BUSINESSES WITH FAITH LEADERS
WITH THE MILITARY WITH -- THE
EXECUTIVES WITH TRADE
ASSOCIATIONS FOR INDUSTRY WE
HELD HEARINGS AND WE EVENTUALLY
DID A NOTICE AND COMMENT
RULEMAKING WERE OVER A MILLION
AMERICANS WAITING EMPHATICALLY
ABOUT THE VERY ISSUES NOT
EVERYBODY AGREED BUT ULTIMATELY.
UNDER DIRECTOR CORDRAY AS
LEADERSHIP THE CFPB CAME UP WITH
A COMPROMISE PROPOSAL IT'S A
COMPLICATED REGULATION -- BUT AT
ITS CORE IT HAS A SIMPLE IDEA
AND THE IDEA IS THIS.
IF YOU'RE GONNA MAKE A TRIPLE
DIGIT INTEREST RATE LOAN YOU
SHOULD PROBABLY CHECK WHETHER
NOT THAT BORROWER HAS THE
ABILITY TO REPAY THE DEBT%
INCLUDING THEIR OTHER PRE
EXISTING OBLIGATIONS AND MAKE
THEIR NECESSARY EXPENSES.
I PERSONALLY HAVE NEVER BEEN
THAT SATISFIED WITH THE
REGULATION BECAUSE I DON'T THINK
IT WENT FAR ENOUGH I THINK
THERE'S SOME LOOPHOLES AND I
THINK THAT -- WE HAVE TIME
TESTED LAWS THAT HAVE WORK
BETTER BUT IT WAS I THINK A VERY
REASONABLE PROPOSAL UNDER THE
CIRCUMSTANCES IT WAS A
COMPROMISE PROPOSAL THAT ALLOW
PAYDAY LENDING TO CONTINUE EXIST.
BUT ALSO A WOOD BAT CHOIR PSALM.
GUIDE RAILS TO TRY AND TEMPER
SOME OF THE WORST EFFECTS WELL
THE INDUSTRY IMMEDIATELY SU THE
CFPB.
GOTTEN JUNCTION AND AS SOON AS
THE ADMINISTRATION CHANGED
THEY'VE NOW DECIDED TO ROLL BACK
THAT PROPOSAL BEFORE IT EVER
LEAVES THE CRAB COMPLIANCE WAS
SUPPOSED TO BE REQUIRED IN
AUGUST OF TWENTY NINETEEN BUT
NOW IT LOOKS LIKE THAT
REGULATIONS NEVER TO SEE THE
LIGHT OF DAY -- AT I'M NOT YOU.
FOR FOR ME.
I'M NOT I'M IT'S NOT A POLITICS
FOR ME I DON'T REALLY CARE THAT
MUCH FRANKLY ABOUT YOU KNOW WHAT
PARTY'S OR WHATEVER. FOR ME IT'S
BUT THE SUFFERING SINGLE MOMS
THE CONSTRUCTION WORKERS THE
PEOPLE THAT ARE OUT THERE TODAY
RIGHT NOW TRYING TO PAY BACK
THEIR 5100% INTEREST RATE LOANS
AND NOT MAKING IT TO THE END OF
THE MONTH.
AND THE COLLECTING THEIR
CHILDREN AND THEIR OTHER
OBLIGATIONS BECAUSE OF THE
PRODUCTS THAT ARE NOT WORKING
FOR THEM.
WELL ALRIGHT SO THAT'S A A
LITTLE BIT ABOUT THE CFPB IS
WORK AND LAST I'D LIKE TO TALK
ABOUT WHAT CALIFORNIA MY TO
BECAUSE YOU KNOW I'M FROM A FROM
YOU TALK VERY CONSERVATIVE RED
STATE.
I GREW UP IN A CONSERVATIVE
FAMILY ON MY ON MY MY ANCESTORS
ALL YOU KNOW BRIGHT RED SCARLET
REPUBLICANS.
AND I GUESS I'M A REASONABLY
CONSERVATIVE GUY AS WELL BUT I
WILL SAY THAT GROWING UP OVER
THE KNEE ON THE OTHER SIDE OF
THE MOUNTAINS AND ACROSS THE
DESERT.
I ALWAYS LOOKED UP TO CALIFORNIA
IS A BRIGHT AND SHINING LEADER.
IN THE COUNTRY EIGHT YOU KNOW A
IN UTAH WE'RE LIKE THAT KINDA.
YOU KNOW DOOR KEY STEP BROTHER
OF CALIFORNIA -- AND AND AND IT
BUT BUT I LOOKED UP TO SAN
FRANCISCO IN THE SACRAMENTO THE
NEXT BIG METROPOLITAN AREA OVER
IS LEADERS IN THIS IN IN
TECHNOLOGY AND AND UNIVERSITIES
IN IN THINKING AND CULTURE.
BUT I'M GONNA BE HONEST WITH YOU
YOU'RE NOT DOING ANY BETTER THAN
WE ARE -- YOUR CURRENT LAWS ARE
A BIT OF A MASS -- THERE'D
DISLOCATED THEIR COPIES THE
COBBLED THEIR COMPROMISES -- YOU
DON'T HAVE INTEREST RATE CAPS AT
ALL AND LOANS ABOVE TWENTY FIVE
HUNDRED DOLLARS IN YOUR PAYDAY
LOANS ARE NEARLY AS BAD AS THEY
ARE IN MY HOME STATE OF UTAH.
I THINK THAT YOU ALL CAN DO
BETTER AND I THINK YOU SHOULD DO
BETTER AND YOUR DOCTOR CORDAY
POINT OUT THAT YOU OF THE FIFTH
LARGEST ECONOMY IN THE WORLD
WELL YOU KNOW THE FOURTH LARGEST
ECONOMIES JAPAN.
AND THE SIX LARGEST ECONOMIES
GERMANY AND THEY BOTH HAVE
INTEREST RATE CAPS TRADITIONAL
ONES THAT DON'T TOLERATE THIS
KIND OF STUFF IN A PUT UP WITH
THAT AND NEITHER OES.
THE UNITED KINGDOM FRANCE SOUTH
KOREA THEY DON'T.
HAVE INTEREST RATE CAPS THAT
PROHIBIT THIS KIND OF LENDING
AND FOR THAT MATTER SO DOES NEW
YORK.
AND IT'S NOT JUST LIBERAL PLACES
SO TO SOUTH DAKOTA WHICH IN THE
LAST IN THE PRESIDENTIAL
ELECTION TWENTY SIXTEEN HAD A
BALLOT INITIATIVE TO CAP
INTEREST RATES OF 36% SAME PRICE
IS THE DEPARTMENT OF DEFENSE.
AND BEAT PRESIDENT TRUMP BY TEN
POINTS IN A SCARLET RED STATE.
THERE IS AN OVERWHELMING
SUPERMAJORITY SUPPORT IN AMERICA
FOR HAVING TRADITIONAL OLD
FASHION INTEREST RATE CAPS THE
PROVIDE REASONABLE PROTECTIONS
FOR OUR CITIZENS.
AND IF YOU STEP UP TO THE PLATE
AND PROVIDE THOSE PROTECTIONS.
YOUR CONSTITUENTS WILL PROUD OF
YOU THEY WILL IS MYERS YOU AND
SO WILL LIE.
THANK YOU FOR YOUR TIME.
WOW THERE WE GO AND WITH THAT
ASSEMBLY MEMBER GRAYSON HAS A
QUESTION THANK YOU MADAM CHAIR
NOT JUST.
WOW I'M OVERWHELMED AT THE
TROPHY OF YOUR ADMIRATION.
WHAT YOU?
I'M ALMOST GIDDY ASSEMBLY MEMBER
YOU HAVE A PATH YOUR BILL YET.
THANK YOU FOR YOUR THANK YOU FOR
YOUR TESTIMONY AND REALLY YOU
HAVE ACTUALLY THROWN ME OFF BY
YOUR ADMIRATION.
I I DO FIRST WHY NEED A
CLARIFICATION FROM YOU AND THIS
MAY BE MORE A FAULT OF MINE.
YOU'RE YOU'RE USING THE TERM
PAYDAY LOANS -- OFTEN AND I
HAVEN'T HEARD MUCH ABOUT SMALL
DOLLAR ARE YOU USING THAT
SYNONYMOUSLY OR ARE ARE YOU
PURPOSING TO ONLY FOCUS ON
PAYDAY AND NOT SMALL DOLLAR.
YOU THAT'S A GREAT QUESTION SO I
WAS USING PAYDAY LOANS AND AN A
COLLOQUIAL TERM USED IN MY
EXPERIENCE.
THE INDUSTRY THE SMALL DOLLAR
LENDING INDUSTRY THEY'RE VERY
PARTICULAR WHEN THEY TALK TO
LEGISLATORS AND TO LAWYERS AND
JUDGES ABOUT WHAT THE WORD
PAYDAY LOAN MEANS BUT WHEN THEY
TALK TO THEIR CUSTOMERS IT'S ALL
THE SAME THING CORRECT IF YOU
ADVERTISE ON THE INTERNET
THEY'RE HAPPY TO GIVE YOU.
A PAYDAY INSTALLMENT LOAN AND
OPEN AND LINE OF CREDIT A LONGER
DURATION SOME ALONE YOU CAN
STRUCTURE WHAT I CALL A PAYDAY
LOAN IN ABOUT THREE OR FOUR
DIFFERENT WAYS -- AND THEY'RE
HAPPY I MEAN I REALLY CARED IN
THE DATE THE KEY THING.
IS TO FOLLOW THE MONEY IT'S THE
INTEREST RATE AND YOU CAN
PRETEND IT'S SOMETHING ELSE BUT
IT'S NOT THAT'S THE REAL KEY.
I APPRECIATE THAT AND NOW I'M
READY TO OFFER MY ADMIRATION TO
YOU -- IF YOU CAN FIX THIS
PROBLEM.
AND THAT IS -- THE DISCUSSION
FROM MUCH OF MY CONCERN.
IS HOW DO WE TAKE THE
UNDERSERVED THAT HAVE BECOME
VICTIMIZED.
BY THIS PREDATORY LENDING HOW DO
WE TAKE THIS.
PARTICULAR PART OF OUR COMMUNITY
AND LIFT THEM OUT OF POVERTY
WHAT POLICY OR WHAT WHAT MOVE
COULD WE MAKE CONSIDERATIONS WE
COULD TAKE THAT COULD ACTUALLY
FACILITATE.
SOME TYPE OF A PROGRAM OR PLAN
TO ACTUALLY LIFT PEOPLE OUT OF
POVERTY RATHER THAN BURY THEM
DEEPER INTO IT -- WITH THESE
WITH THIS FINANCIAL POLICY.
WELL I THINK IT'S A GREAT
QUESTION AND LOOK I I THINK THE
FIRST PLACE THAT USED TO START
BY LIFTING UP IS JUST TAKING
SOME OF THE TRAPS AWAY.
YOU KNOW ONE OF THINGS ABOUT OUR
COUNTRY IS WE ARE VERY TOLERANT
OF TRAPS THAT SINK FAMILIES AND
THAT'S WHAT THESE ARE THESE
LOANS ARE THEY ARE DEATH TRAPS.
AND THE TIME TESTED MOST
EFFECTIVE WAY TO GET THE LENDERS
TO DETERMINE WHEN OUR PEOPLE
HAVE THE ABILITY TO PAY IT'S
JUST LIMIT THE PRICES THEY CAN
CHARGE TO A REASONABLE INTEREST
RATE.
YOU KNOW THE DEPARTMENT OF
DEFENSE IN THE MILITARY LENDING
ACT REGULATIONS.
WE MANAGED TO DRAFT A REGULATION
THAT CUTS A LINE ACROSS THE
ENTIRE ECONOMY IN ALL OF THE
CREDIT CARDS THAT ARE WIDELY
AVAILABLE.
THOSE ARE STILL AVAILABLE THERE
WERE NO ADD ROLES ARE KERNELS
ARE GENERAL'S IT CAME YELLING AT
IS THAT WAIT A MINUTE YOU TOOK
AWAY MY CREDIT CARD.
THERE'S STILL TONS OF CREDIT
THAT'S OUT THERE -- I IF I COULD
TO YOU KNOW THERE'S THIS MYTH
OUT THERE THAT WE DON'T HAVE
ACCESS TO CREDIT BECAUSE IF WE
DON'T HAVE PAYDAY LOANS BUT THE
TRUTH IS.
EVERY CREDIT CARD IN AMERICA HAS
A BUILT IN FREE PAYDAY LOAN IF
YOU'RE NOT CARRYING A MONTHLY
BALANCE THEN THERE'S A TWENTY
ONE THREE DAY THREE WEEK --
GRACE PERIOD THAT IS THE SAME
THING IS A PAYDAY LOAN AND YOU
HAVE TO PAY FOR IT.
OF COURSE THE PROMISE THE PEOPLE
GET IN OVER THEIR HEAD.
IN AND THEN YOU'RE GONNA START
CARING A REVOLVING BALANCE AND
THEN THEY START YOU KNOW GETTING
FURTHER FURTHER BEHIND BUT THE
SOLUTION TO THAT PROBLEM IS NOT
DUMPING ANOTHER 4100% STRAIGHT
LOAN ON THEM THE PROBLEM THE
SOLUTION OF THE PROBLEM.
IS TRYING TO DISCIPLINE YOURSELF
PULL YOURSELF UP BY THE
BOOTSTRAPS AND HAVE SOME OF THAT
CALIFORNIA ENTREPRENEURIAL
SPIRIT.
SO.
I THINK THERE ARE LOTS OF THINGS
THAT CAN BE DONE TO ALLEVIATE
POVERTY AND I DON'T MEAN TO SAY
THAT AN INTEREST RATE CAP IS THE
ONLY THING.
BUT I THINK IT'S ONE OF THE VERY
MOST IMPORTANT FIRST STEPS.
AS A MEMBER STONE.
SO THAT PART OF THE SPEAKING OF
TRAPS THAT WE FALL INTO HERE AND
AND IT'S INTERESTING THAT YOU
TALK ABOUT THE JURISDICTIONS
THAT THAT DO IN FACT HAVE CAPS
BECAUSE AS WE'VE TRIED TO PUT
CAPS ON AND EVEN THE SAME.
AS UNDER THE MILITARY LENDING
ACT WE'RE TOLD.
OMEGA.
BY BLENDERS SMALL DOLLAR LENDERS
PAYDAY LENDERS HOWEVER YOU WANT
TO FRAME IT IT IT'S INTERESTING
THAT YOU DON'T DRAW THAT
DISTINCTION.
BECAUSE WE WE WE PARTS THOSE
WORDS VERY CAREFULLY AROUND HERE
UNFORTUNATELY.
WE'RE TOLD THAT ALL MY GOSH
THESE PRODUCTS WILL NOT BE
AVAILABLE AND THE POOREST AMONG
OUR COMMUNITIES.
WON'T HAVE ACCESS TO CAPITAL AND
AND I YOUR ENTHUSIASM IN THIS
NOTION OF SORT OF PULL YOURSELF
UP BY THE BOOTSTRAPS BUT FOR
MANY OF THE POOREST IN
CALIFORNIA.
THERE'S NO ABILITY TO DO THAT
BECAUSE THEY DON'T.
THEY DON'T SEE THE LIGHT THEY
DON'T SEE THE ABILITY OUT OF IT.
AND A LOT OF THEM ARE MAXED OUT
ON THE CREDIT CARDS WHICH IS
WHEN THEY BECOME VULNERABLE TO
TODAY PAYDAY LENDERS.
AND SO IF.
A JURISDICTION LIKE NEW YORK AND
PUT A CAP ON AND THEY OBVIOUSLY
THERE POOREST HAVE ACCESS TO
CAPITAL.
HOW IN THE WORLD DO THEY DO THAT?
WHEN OBVIOUS WHEN WE'RE TOLD WE
CAN'T DO THAT AND STILL GIVE
THESE COMMUNITIES ACCESS TO
CAPITAL?
WHAT?
FRANK FRANKLY I I THINK THERE
ARE LOTS OF SUPERIOR ALTERNATIVE
SAID TO PAY LOANS I ALREADY
MENTIONED CREDIT CARDS WHICH
INCLUDES NOT JUST PRIME CREDIT
CARDS BUT SUBPRIME CREDIT CARDS
THERE ARE A LOT OF CREDIT CARDS
THAT ARE SPECIFICALLY DESIGNED
WITH.
BELT OF THE SMALL BALANCES WITH
HIGHER INTEREST RATES AND SOME
FEES MAY BE SECURITY DEPOSIT
THAT ARE SPECIFICALLY TARGETED
TO PEOPLE THAT HAVE SOME OF THE
LOWEST CREDIT SCORES.
IT'S DIFFICULT FOR CONSUMERS TO
FIND OF THE HAVE TO SHOP A
LITTLE BIT AND THEY HAVE TO
APPLY BUT THOSE PRODUCTS ARE
AVAILABLE TO PEOPLE WHO HAVE
OTHER CREDIT CARDS MAXED OUT OR
STRUGGLING.
THERE ARE CREDIT CARD LOANS THAT
ARE AVAILABLE FOR THESE SAME
CALL EXTENSIVE POPULATIONS
SECOND.
THE FEDERAL CREDIT UNIONS HAVE A
PAYDAY ALTERNATIVE LOAN PROGRAM --
THAT HAS INTEREST RATES OF 28%
PLUS AN APPLICATION FEE THESE
ARE WIDELY AVAILABLE AT CREDIT
UNIONS ALL ACROSS AMERICA AND
NORMAL STATE LAWS DON'T APPLY
DON'T BECAUSE TO SOME SPECIAL
FEDERAL BANKING LAWS.
AND THESE ARE AVAILABLE FOR
PEOPLE WHO SEEK THEM OUT THEY
DON'T ADVERTISE THEM BECAUSE
THERE'S NOT A SUFFICIENT MARGIN
IN A 28% SMALL DOLLAR LOAN TO
BUY A LOT OF ADVERTISING OR OR.
PURCHASE EXPENSIVE BRICK AND
MORTAR STORE FRONT PROPERTY IN A
MAJOR THOROUGHFARE OR BY
ADVERTISING ONLINE A THIRD
EXAMPLE FINANCE COMPANIES.
WHICH HAVE SOME PRETTY ROUGH
LOANS AND TO BE HONEST INSTALL
LONGER DURATION STOP AT LUNCH
BUT STILL HAVE INTEREST RATES OF
ABOUT 36% OR LOWER VERY COMMON
IN STATES LIKE NEW YORK NORTH
CAROLINA AND OTHER STATES THAT
PROHIBIT PAYDAY LENDING.
FOURTH EXAMPLE ARE NEGOTIATED
FORBEARANCE AGREEMENTS I THINK
DIRECTOR CORDRAY MENTION THIS AS
WELL ONE OF THE BEST THINGS YOU
CAN DO IF YOU'RE IN A FINANCIAL
JAM.
IS SPEND SOME TIME NEGOTIATING
WITH YOUR VARIOUS CREDITORS
WITHOUT YOUR LAN ORDER TO
UTILITY COMPANY YOUR DENTIST
WHOEVER IT IS BECAUSE THEY WILL
OFTEN WORK WITH YOU AT MUCH
LOWER PRICES THAN PAYDAY LENDERS
DO.
FIFTH ANSWER WOULD BE THERE ARE
MANY IS SURPRISINGLY MANY
CHARITABLE ORGANIZATIONS TO
PROVIDE THE KIND OF EMERGENCY
CREDIT THAT IT IS A VIABLE COME.
CON COMPETITOR TO PAYDAY LOANS
AND THESE IN YOUR STATE THIS
WILL BE HARD AND SOME OTHER
STATES BUT YOUR STATE IS VERY
RICH IN THESE OPPORTUNITIES IF
YOU'D LIKE TO SEE SOME EXAMPLES
THE NOT PERSONAL FINANCIAL
ADVICE.
WEBSITE NERD WALLET DOT COM
MAINTAINS AN ACTIVE LIST OF OVER
A DOZEN A NONPROFIT -- BUT FAITH
BASED COMMUNITY TYPE
ORGANIZATIONS THAT ARE CURRENTLY
RIGHT NOW PROVIDING ALTERNATIVES
TO PAYDAY LOANS HERE IN THE
STATE OF CALIFORNIA AND THEN SIX
LAST.
YOU KNOW I'M NOT A BIG FAN OF
PAWN SHOPS THEY HAVE SOME ROUGH
LOANS ARE SOME DRAWBACKS.
BUT FRANKLY PAWN SHOPS HAVE BEEN
AROUND FOR THOUSANDS OF YEARS
AND HAVE BEEN THE CIVILIZED
LENDER OF LAST RESORT -- TIME
AND TIME AGAIN WHY BECAUSE IN A
PAWN SHOP LOAN YOU PRE PLAN YOUR
OWN EXIT STRATEGY FROM THE DEBT
BY.
TAKING SOME COLLATERAL WHETHER
THAT'S AN ITEM OF JEWELRY
ELECTRONICS AND PLEDGING
SECURITY AND THEN IF YOU CAN'T
PAY BACK THE LOAN YOU WALK AWAY
FROM THE DEAD AND YOUR THE ONE
THAT SHOWS WHAT YOUR EXIT
STRATEGY WAS.
YOU'RE ALSO FORCED TO DISCIPLINE
YOURSELF BY MAYBE TAKING A
LITTLE BIT SMALLER LOAN.
AND BUY ALSO HAVING A LITTLE BIT
THE PAIN UP FRONT NOT JUST ALL
THE CANDY AND AND YOU KNOW FREE
EASY MONEY UP FRONT.
AND PAWN SHOPS EXIST EVERYWHERE
THERE ARE ABOUT SIXTEEN THOUSAND
PAWN SHOPS THERE BALLOTS ACROSS
AMERICA AND THEY PROVIDE A MUCH
SAFER MORE REASONABLE
ALTERNATIVE TO PAYDAY LOANS SO
THAT'S ONLY SIX AM EXAMPLES BUT
I THINK I'VE GONE ON TOO LONG SO
TO STOP A PROBABLY.
FAKE MORE AT LIVE CREATE THAT IN
AND THEY THE DIFFICULT THING IS
FOR US TO CONVINCE OURSELVES
THAT THERE ARE OTHER OPTIONS TO
GET CAPITAL.
EVEN IF THERE ARE SOME BY
CREATING AT A CAP LIKE THE 36%
AND THEN THAT DOES NOT MAKE.
CERTAIN OTHER OPTIONS AVAILABLE
I THINK WHAT YOU'RE SAYING IS WE
CAN LIVE THROUGH IT AND THE
OTHER ASPECT THAT I VERY MUCH
APPRECIATE AND THAT WE GIVE CUT
SHORT SHRIFT TO IS THIS NOTION
OF FINANCIAL LITERACY.
AND THE ABILITY AND THE
WILLINGNESS TO ACROSS THE BOARD
EDUCATE PEOPLE ON HOW BETTER TO
TAKE CARE OF YOURSELVES AND WE
HAVE FOUND.
AT THE LOCAL LEVEL WHEN WE DO
THAT WE ALSO TAKE ADDITIONAL
STRESSORS OUT OF THOSE FAMILIES
AND THOSE COMMUNITIES AND OTHER.
ABUSE NOT YOUR ISSUE BUT THINGS
LIKE.
CHILD ABUSE AND SPOUSAL ABUSE
NEWS GO DOWN WHEN WE REMOVE
THOSE PRESSURES AND THIS IS
EXACTLY WHY CALIFORNIA PASSED AN
EARNED INCOME TAX CREDIT.
ADDING ON TO THE FEDERAL TO TRY
AND PUT SOME MONEY IN THE HANDS
OF THE PEOPLE WHO NEED IT THE
MOST TO TAKE SOME OF THESE
PRESSURES OFF.
AND KEEP THEM AWAY FROM.
THE LORD FOUR HUNDRED FIVE HER
PERCENT LOANS WHICH WHICH REALLY
ARE SHOCKING SHOULD BE SHOCKING
BUT SEEM TO BE SOMETHING THAT
WERE.
WILLING TO TOLERATE UNDER THE
EXISTING SYSTEM SO I IT I
APPRECIATE YOUR PERSPECTIVE
ESPECIALLY THE VIEW THAT YOU
HAVE.
ACROSS THE COUNTRY OF MANY
STATES AND AND WHERE THINGS OF
WORK BECAUSE I AGREE CALIFORNIA
WE HAVE THE ABILITY.
THE PEOPLE THE COMPASSION AND
WHETHER IT'S THE FACE BASED
ORGANIZATION LOCAL JURISDICTIONS
LOCAL CREDIT UNIONS WE HAVE A
WIDE VARIETY.
OF INDIVIDUALS AND ORGANIZATIONS
WHO COULD BE BROUGHT TO BEAR.
IF WE WERE WILLING TO DO THAT
AND I KEEP HOPING THAT WE WILL
FIND THAT ABILITY TO TO DO THAT
SO BUT I VERY MUCH APPRECIATE
YOUR TESTIMONY THANK YOU.
AS A MEMBER MELENDEZ.
THANK YOU MADAM CHAIR -- MISTER
PETERSON I'M YOU MENTIONED
SEVERAL OPTIONS -- THAT PEOPLE
MIGHT TAKE TWO INSTEAD OF A
PAYDAY LOAN OR INSTEAD OF A
SHORT TERM LOAN.
AND ALL OF THOSE OPTIONS ARE
CURRENTLY AVAILABLE WHETHER IT'S
THE PAWN SHOP OR GOING TO YOUR
IN LAWS ARE YOU KNOW THE VARIETY
OF OTHER THINGS THAT YOU MENTION.
SO I'M.
IF ALL OF THOSE THINGS ARE
AVAILABLE NOW WHY THEN ARE
PEOPLE STILL GOING TO THE TYPES
OF LENDERS THAT YOU IN YOUR
FORMER BAATHISTS.
SEEM TO BE SO ADAMANTLY OPPOSED.
TO IT. ONE I THREE THREE POINT
YOU KNOW IT YOU UNDERSTAND I'M
SAYING HE'S BEEN THERE SO
THEY'RE NOT USING IT AS MUCH AS
THEY USING THIS OTHER TYPES OF
LOANS.
SO FOR THE PSYCHOLOGY BEHIND
THAT IS THREE THREE POINTS ONE
IT'S IT'S NOT JUST ME AND MY
FORMER BOSS.
IT'S A SUPERMAJORITY OF ALL
AMERICANS -- IN REPUBLICAN
STATES AND DEMOCRATIC STATES
ACROSS THE BOARD OUR ARE IN LOCK
STEP ON THIS ISSUE BUT BUT
SECOND TO ANSWER YOUR QUESTION
WHAT WHY DO PEOPLE MAKE THESE
CHOICES WELL FIRST OFF.
BY HAD CHARGING A HIGHER
INTEREST RATE.
PAYDAY LENDERS VEHICLES
HIGHLANDERS AND OTHER SIMILAR
FORMS OF HIGH COST SMALL DOLLAR
LENDERS HAVE MORE MARGIN IN
THEIR LOANS TO MORE PROMINENTLY
PLACED THEMSELVES IN FRONT OF
PEOPLE WHO ARE DESPERATE AND
MIGHT MAKE A BAD DECISION.
SO THEY TAKE THEY THEY THEY BUY
UP THE STORE THE MAJOR
STOREFRONT LOCATIONS ALONG BIG
THOROUGHFARES HAVE BIGGER SIGNS
OUT THEIR ADVERTISING.
YOU IN TERMS OF THE BRICK AND
MORTAR STORES.
MUCH MORE PROMINENTLY THAN SAY
FEDERAL CREDIT UNION COULD
AFFORD TO DO ON A PAY ALTERNATE
ALONG WITH MUCH MUCH SMALLER
INTEREST RATE THAT ALSO HAPPENS
ONLINE TOO SO THE WAY THAT
PAYDAY LOANS ARE MADE ONLINE IS
PEOPLE WILL GO IN THOSE THE
SEARCH ON YAHOO.
BEING OR GOOGLE.
AND FOR PAYDAY LOAN AND THEN A
WHOLE HOST OF WEBSITES WILL POP
UP IN THOSE WEBSITES ARE NOT
USUALLY LANDERS WHAT THEY REALLY
ARE OR TO CALL LEAD GENERATORS
THAT TAKEN APPLICATIONS AND
THENCE TURN AROUND AND SELL THAT
APPLICATION.
BUT THAT THAT THAT THAT LEAD IN
A WHAT'S CALLED A REVERSE PAYING
TREE AKTION.
AND THE THE FIRST PERSON THE
FIRST COMPANY THAT GETS THE BID
ON THE LEAD.
PAYS THE HIGHEST AMOUNT FOR
FIRST LOOK LEAD AND IF YOU
CHARGE 6100% INTEREST RATE YOU
CAN BUY UP ALL THE LEADS FOR THE
REASONABLE LOAN APPLICATIONS
LONG BEFORE SOMEBODY EXCUSE ME
THAT -- YOU KNOW HAS IS ONLY
CHARGING 28% COULD EVER BY A
POLICE AND SO THEY MANAGE TO
DOMINATE THE MARKET NOT TO PRICE
COMPETITION BUT THROUGH MUCH
MORE AGGRESSIVE SALIENT
ADVERTISING AND MARKETING.
AND MANY OF THE CONSUMERS IN
THIS MY THE PLACE.
DON'T UNDERSTAND THAT YOU KNOW
EXACTLY WHAT THE PRICES MEAN
DON'T REALLY READ THE CONTRACTS
AND HAVE A HARD TIME IDENTIFYING
WHICH COMPANIES ACTUALLY
CHARGING A BETTER INTEREST RATE.
AND THAT'S THAT'S THE FIRST
REASON THE SECOND REASON IS THAT
PEOPLE GET STUCK ON THESE LOANS
AND I THINK IT OUT OF SO JUST
KEEP ROLLING THEM OVER AND OVER
AGAIN AND THAT'S AT 80% OPTION
CALIFORNIA DOING REAL WELL.
THE AYE AYE.
I'M SORRY SHOULD ICE THE CHAIR
OUR STATE [inaudible]
SO OF I MEAN IT'S SO.
THERE THERE ARE SOME
RESTRICTIONS TO TRY TO PREVENT
ROLLOVERS BUT IT WHEN THEY SEE
IF HE BE LOOKED AT IT WE GOT
DATA FROM ALL THE LENDERS
BECAUSE WE COULD GET IT THROUGH
OUR OUR SUPERVISORY EXAMS AND
HAD TO TURN IT OVER.
AND WE HAD OUR ECONOMISTS ARE
STATISTICIANS LOOK AT ALL THE
DATA AND CALIFORNIA BOTH PAYDAY
LOANS AND VEHICLE THAILAND'S.
THE ROOM OVER THE SAME PLACE
SAME AS EVERYBODY ELSE -- THEY
THAT BARBER'S AFTER THEY TAKE
OUT A LOAN -- THE BILL TRYING
HOPSCOTCH A MORE THOUGH IT MAYBE
THEY'LL PAY IT BACK AND THEN TWO
DAYS LATER THE COMING BY GET A
NEW ONE OR THEY CAN'T MAKE IT TO
THE END OF THE MONTH AND THEY
HAVE THE SAME.
REPEATED USE PATTERNS THE DO
EVERYWHERE ELSE IN THE COUNTRY.
OKAY RIGHT I THINK YOU'RE
CATEGORIZING IT AS A ROLL OVER
LAND WHEN IT'S SLIGHTLY
DIFFERENT BUT IT'S SAME IN
PRINCIPLE BUT OKAY SO -- WHEN
YOU WERE ACT CFPB -- EVEN PRIOR
TO BEING THERE.
WERE YOU EVER ABLE -- TO I GUESS
YOU KNOW THESE LINES ARE GOING
AWAY -- AND I AGREE WITH YOU
THAT MANY OF THEM ARE.
PREDATORY IN NATURE -- THANK YOU
IS THERE I APPRECIATE THAT
[inaudible]
HERE HOW -- IS THERE ANY WAS
THERE ANY EFFORT ON THE PART OF
SEE IF YOU NEED.
TO NEGOTIATE WITH BANKS TO GET
THEM TO OFFER SOMETHING THAT WAS.
MAYBE A LITTLE MORE ENTICING OR
PEELING AND FINANCIALLY MORE
RESPONSIBILITY CONSUMERS TO SORT
OF YOU KNOW.
CUT INTO THAT MARKET.
WELL I THAT WAS NOT MY JOB I
WOULD BEEN DELIGHTED TO DO THAT
BUT I GOT THE TICKET WHERE BUT
YEAH THE DEPARTMENT.
I MEAN THAT'S PART OF THE THE
THERE DEFINITELY WERE
COMMUNICATIONS THAT WENT ON THAT
ABOUT THAT SORT OF THING -- BET
IT'S BEEN MY AND MY SENSE IS
THAT THEY HAVE BORNE FRUIT AND
AND SO YOU KNOW THAT SOME OF THE
SUBPRIME CREDIT CARDS THAT HAVE
A SECURITY DEPOSIT ON THEM.
THOSE ARE VERY COMPETITIVE IN
THE SAME MARKET PLACE FOR THE
SAME OR VERY SIMILAR BORROWERS
IT IS THE PAYDAY LOAN MARKET.
AND WHAT I'M NOT WHEN WHEN MY
LITTLE SISTER TO BORROW MONEY ON
WHERE THE SUBPRIME CREDIT CARDS
BECAUSE THEY'RE THEY'RE PRETTY
ROUGH LOANS IT -- BUT YOU KNOW.
I MEAN THERE THERE ARE TEN TIMES
CHEAPER THAN THAT AND YOU KNOW
EVEN MODERATELY PRICED PAYDAY
LOANS AND THEY DON'T HAVE THE
SAME NASTY COLLECTION PRACTICES
AND THAT'S IT SO THERE ARE
BETTER BANK AND CREDIT UNION
ALTERNATIVES THAT ARE OUT THERE --
THEY CAN'T ADVERTISERS
AGGRESSIVELY CONSUMERS HAVE TO
SHOP FOR THEM IN ADVANCE A
LITTLE BIT MORE -- AND THEY'RE
ALSO PROBABLY LITTLE MORE LIKELY
TO CUT OFF THE CONSUMER A LITTLE
BIT QUICKER THAN THE PAYDAY
LENDERS ARE BUT SOMETIMES THAT'S
WHAT CONSUMERS NEED SOMETIMES
THEY NEED SOMEBODY TO SAY.
YOU KNOW WHAT NO YOU EAT YOU
BORROW TOO MUCH YOU CAN AFFORD
TO PAY THIS BACK AND WHAT YOU
NEED NOW IS SOME HELP FROM A
CHARITY OF FAITH ORGANIZATION.
BECAUSE YOU'RE IN OVER YOUR HEAD
AND YOU'RE HEADED STRAIGHT TO
BANKRUPTCY AND INSOLVENCY AND
BORROWING MORE MONEY AT 4100% IS
NOT GONNA HELP YOU.
THANK YOU THANK YOU THANK YOU
MA'AM.
THANK YOU THANK YOU FOR YOUR
TESTIMONY IN YOUR PRESENTATION I
THINK IT HAS BEEN VERY HELPFUL
AND WE APPRECIATE THEM ALL THE
FEEDBACK AND INSIGHT YOU'VE
GIVEN US THANK YOU CHAIR
APPLICATION THANK YOU SO MUCH
FOR THE INVITATION COMES AN
HONOR TO BE HERE TODAY.
NEXT WE HAVE A SET FRONTMAN --
FORMER STUDENT LOAN -- THAT'S
PERSON AT THE CFPB.
THANK YOU SET FOR BEING HERE
WITH US AND YOU'RE WELCOME TO
BEGIN YOUR TESTIMONY.
CHAIRMAN LIMóN MEMBERS OF THE
COMMITTEE THANK YOU SO MUCH FOR
THE HONOR OF TEST AT THE HONOR
OF TESTIFYING HERE TODAY.
THIS IS MY SECOND TIME
TESTIFYING BEFORE THE CALIFORNIA
LEGISLATURE.
I WAS LAST HERE IN TWENTY
SEVENTEEN AS CALIFORNIA BECAME
ONE OF THE FIRST STATES IN THE
COUNTRY TO TAKE THE CRITICAL
STEP OF OVERSEEING THE STUDENT
LOAN MARKET.
BUT AS I SIT HERE TODAY THE
SCOPE OF THE CHALLENGES THAT
CONSUMERS FACE ACROSS THIS STATE
IN THIS COUNTRY LOOM LARGER.
THE RISKS MORE SIGNIFICANT THE
HARMS MORE SEVERE THE THREATS
EVEN FROM THOSE SERVING IN POWER
ARE TANGIBLE.
AND WITH THAT THE SERIOUSNESS OF
THIS STATE'S COLLECTIVE RESPONSE
AND THE CENTRALITY OF THIS
COMEDIAN THAT RESPONSE MORE
CRITICAL THE DEEP SYSTEMIC
REFORMS MORE NECESSARY.
THE FINANCIAL FUTURES OF TENS OF
MILLIONS OF CITIZENS ACROSS THIS
STATE REST IN THE BALANCE.
THERE IS PERHAPS NO BETTER
DEMONSTRATION OF THIS PRECARIOUS
POSITION IN THE STUDENT DEBT
CRISIS GOING ON RIGHT OUTSIDE
THESE WALLS.
BECAUSE I COULD THINK OF NO MORE
APT EXAMPLE THAT CONVEYS THE
URGENCY OF THE REQUISITE ACTION
AND WHAT IS HAPPENED ACROSS THE
STUDENT LOAN MARKET.
IN JUST THESE PAST TWO YEARS.
A HUNDRED AND FORTY THREE
BILLION DOLLARS IN STUDENT DEBT
HAS BEEN ADDED NATIONALLY.
NOW BORROWERS COLLECTIVELY --
MORE THAN ONE POINT FIVE
TRILLION DOLLARS IN OUTSTANDING
LOANS.
MORE THAN HALF A MILLION PEOPLE
HAVE BEEN FORCED TO TAKE ON
STUDENT DEBT.
NOW THERE ARE MORE THAN FORTY
FOUR MILLION AMERICANS GETTING A
STUDENT LOAN BILL EACH MONTH.
THREE THOUSAND DOLLARS HAD BEEN
ADDED TO BORROWERS BALANCES NOW
STUDENT LOAN BORROWERS -- ON
AVERAGE MORE THAN THIRTY FIVE
THOUSAND DOLLARS IN STUDENT DEBT.
AND IN THE LOOK INTO THE TWENTY
FOUR MONTHS SINCE I WAS LAST
HERE TWO MILLION BORROWERS HAVE
DEFAULTED ON THEIR STUDENT LOANS.
NOW EIGHT POINT FIVE MILLION
STUDENT LOAN BORROWERS ACROSS
THIS COUNTRY ARE IN DEFAULT.
AND ACROSS CALIFORNIA THE
PICTURE IS EQUALLY BLEAK THREE
POINT EIGHT MILLION CALIFORNIANS --
MORE THAN ONE HUNDRED AND THIRTY
FOUR BILLION DOLLARS IN STUDENT
LOAN DEBT.
NEARLY HALF A MILLION OF THESE
BORROWERS LIVE IN RURAL
COMMUNITIES AND MORE THAN EIGHTY
THOUSAND OF THOSE BORROWERS ARE
AT LEAST THREE PAYMENTS BEHIND
OVER THREE HUNDRED THOUSAND OF
CALIFORNIA SENIORS -- STUDENT
LOAN DEBT.
BY HOLDING THIS HEARING TODAY
THIS COMMITTEE HAS AGAIN TAKEN A
CRUCIAL STEP IN RECOGNIZING THAT
CALIFORNIA IS IN A CRISIS.
BUT MORE IMPORTANTLY BY HOLDING
THIS HEARING TODAY THIS
COMMITTEE HAS RECOGNIZED ITS
POWER TO HELP AND A POWERFUL
COMBINATION OF CALIFORNIA'S
LANDMARK STUDENT LOAN SERVICING
Là.
COMBINED WITH ASSEMBLY MEMBER
STONE'S NEWLY INTRODUCED
BORROWER BILL OF RIGHTS WILL
RETOOL THE STATE'S OVERSIGHT OF
THE STUDENT LOAN MARKET IN
SIGNIFICANT WAYS.
BUT MORE THAN THAT IT CAN CREATE
A ROADMAP FOR HOW GOVERNMENT
OVERSEES ALL OF CONSUMER FINANCE.
YOU CAN PROVIDE THE BROUGH
BLUEPRINT FOR CALIFORNIA TO
BUILD OVERSIGHT FRAMEWORK THAT
MATCHES THE COMPLEXITY AND THE
FERRY IS MISS OF THE FINANCIAL
SECTOR THAT SEEMS TO KNOW NO
BOUNDS.
THE STUDENT DEBT CRISIS BOTH IN
CALIFORNIA AND ACROSS THE
COUNTRY IS ABOUT MORE THAN DEBT
LOADS AND BALLOONING BALANCES.
IS ABOUT MORE THAN HIGHER
EDUCATION POLICY IN COLLEGE
AFFORDABILITY.
THE STUDENT DEBT CRISIS IS A
SIGNIFICANT PERHAPS THE MOST
SIGNIFICANT CONSUMER FINANCE
FINANCE ISSUE THREATENING OUR
NATION AT THIS TIME.
WE HAVE DROPPED A TRILLION
DOLLARS OF DEBT ON THE BACKS OF
AMERICAN FAMILIES WITH LITTLE
THOUGHT TO THE OVERSIGHT
CONSUMER PROTECTION WERE
ACCOUNTABILITY THAT IS NECESSARY
TO MANAGE IT.
WE ENCOURAGE MILLIONS OF
STUDENTS TO TAKE ON BILLIONS IN
DEBT.
AND THEN TO ADD INSULT TO INJURY
WE SENT THEM INTO A MARKET WITH
A PIECEMEAL CONSUMER PROTECTION
FRAMEWORK THAT BUCKLED UNDER THE
WEIGHT OF THIS HISTORIC BURDEN.
FROM STUDENT LOAN SERVICERS THE
FOR PROFIT SCHOOLS FROM DEBT
COLLECTORS TO PRIVATE STUDENT
LENDERS FROM PRIVATE EQUITY
FIRMS TO GET RELIEF SCAMS ENTIRE
INDUSTRIES HAVE BUILT THEIR
PROFIT MODELS AROUND TAKING
ADVANTAGE OF STUDENT LOAN
BORROWERS.
THROUGHOUT AMERICA BIG BANKS AND
SMALL SCAMS HURT MILLIONS OF
BORROWERS AT EVERY POINT OF
THEIR FINANCIAL LIVES.
TENS OF MILLIONS OF STUDENT LOAN
BORROWERS NATIONALLY AND
MILLIONS RIGHT HERE IN
CALIFORNIA ARE TRAPPED IN A
BROKEN SYSTEM.
IF YOU ARE CHASING THE AMERICAN
DREAM YOU SHOULD NOT BE RIPPED
OFF AT EVERY TURN.
WHETHER YOU'RE PAYING A STUDENT
LOAN OR OPENING UP A SAVINGS
ACCOUNT.
FROM MORTGAGES TO MONEY ORDERS
FROM CREDIT CARDS TO CREDIT
REPORTING FROM PREPAID CARDS TO
PAY DAY LOANS.
ACROSS ALL OF THESE MARKETS THE
CONSUMER BUREAU HAD ONE MISSION
PROTECT CONSUMERS.
AND THEY KNOW WHERE WAS THIS
MISSION MORE IMPORTANT THAN IN
THE STUDENT LOAN MARKET.
A MARKET WHERE PRIOR TO THE CFPB
ANY NOTION OF OVERSIGHT CAME
FROM THE DEPARTMENT OF EDUCATION.
THE SELF DESCRIBED LARGEST
SPECIAL PURPOSE CONSUMER BANK IN
THE WORLD.
IN EFFECT LAWMAKERS PLACE THE
TRILLION DOLLAR BET ON THE
PROSPECT THAT A GIANT CREDITOR
COULD BE TRUSTED TO SELF POLICE.
THE WAITER THE FINANCIAL FUTURES
OF MILLIONS OF STUDENTS AND
THOSE STUDENTS LOST.
STUDENT LOAN BORROWERS NEEDED A
WATCHDOG THAT WAS NOT TAINTED BY
ITS ROLE AS A CREDITOR AND
CONTRACT ADMINISTRATOR.
THAT WAS NOT TRYING TO PUSH
DOLLARS OUT THE DOOR.
THAT WAS NOT SENDING OUT MIXED
MESSAGES PROMPTED BY PERVERSE
INCENTIVES.
THE CFPB COULD FILL THIS ROLE
BECAUSE ITS MISSION WAS CLEAR
PROTECT CONSUMERS.
THE CFPB WAS AN INDEPENDENT
AGENCY THAT UTILIZED EVERY
AUTHORITY BESTOWED UPON IT BY
CONGRESS FROM SUPERVISION TO
ENFORCEMENT FROM DOCUMENTING
COMPLAINTS TO HELPING INDIVIDUAL
CONSUMERS.
IT HELP OUR WITH IN ALL FIFTY
STATES AND EVERY US TERRITORY.
IT HELP OUR WAYS OF EVERY AGE
EVERY RACE EVERY GENDER.
IT HELPED AMERICAN FAMILIES.
THE CFPB OVERSAW ALL ASPECTS OF
THE STUDENT LOAN MARKET FROM
BANKS TO NON BANKS LENDERS TO
SERVICERS IT TOOK ENFORCEMENT
ACTIONS AGAINST THOSE WHO
BROUGHT BROKE THE LAW.
FROM SMALL SCAMMERS TO LARGE
FINANCIAL INSTITUTIONS LIKE
WELLS FARGO DISCOVERING NAV YET.
AND IT WORKED.
IN THOSE SEVEN YEARS THE CFPB
RETURNED MORE THAN SEVEN HUNDRED
AND FIFTY MILLION DOLLARS TO
STUDENT LOAN BORROWERS.
BUT WHEN THE FORMERLY
INDEPENDENT CFPB WAS PLACED
UNDER THE POLITICAL INFLUENCE OF
MICK MULVANEY KATHY CRYING
INJURE AND THEIR APPOINTEES
EVERYTHING CHANGED.
THE CFPB WALKED AWAY FROM THE
FORTY FOUR MILLION AMERICANS
WITH STUDENT DEBT.
WITH THE CFPB ONE STOOD PROUDLY
AS THE MOST VOCAL NVM IN
CHAMPION FOR STUDENT LOAN
BORROWERS IT IS NOW WILL FULLY
ABSENT.
IN THE SIXTEEN MONTHS SINCE
DIRECTOR CORDRAY LAUGHED THERE'S
NOT BEEN A SINGLE ENFORCEMENT
ACTION ANNOUNCED AGAINST THE
STUDENT LOAN COMPANY.
IN THOSE SIXTEEN MONTHS THERE'S
NOT BEEN A SINGLE EFFORT TO
EXPOSE THE RAMP IT BREAKDOWNS
BORROWERS FACE ACROSS THE
STUDENT LOAN MARKET.
IN THOSE SIXTEEN MONTHS THERE'S
NOT BEEN A SINGLE FOR PROFIT
SCHOOL A SINGLE BANK SINGLE
COMPANY HELD TO ACCOUNT FOR THE
HARM INFLICTED ON VULNERABLE
STUDENT LOAN BORROWERS.
IN THOSE SIXTEEN MONTHS THE
BUREAU HAS PRIORITIZE THE WISHES
OF THE MOST POWERFUL FINANCIAL
COMPANIES IN AMERICA.
OVER THE NEEDS OF THE VERY
PEOPLE THEY WERE TASKED BY
CONGRESS TO PROTECT ALL UNDER
THE SELECTIVE INVOCATION OF
STATUTORY RESTRAINT.
INSTEAD A ONCE INDEPENDENT
AGENCY NOW WAIT FOR PERMISSION
FOR A PERMISSION SLIP FROM THE
DEPARTMENT OF EDUCATION BEFORE
DOES ITS JOB.
BEFORE DOES THE VERY WORK THAT
IT WAS PASSED BY CONGRESS TO
DEAL.
THE CFPB HAS MADE THE DANGEROUS
DECISION TO KEEP TO THE US
DEPARTMENT OF EDUCATION.
THE SAME DEPARTMENT THAT UNDER
BETSY DEVICE HAS USED EVERY
OPPORTUNITY TO PLACE
CORPORATIONS ABOVE CONSUMERS.
THE MESSAGE IS CLEAR THERE IS NO
WHITE KNIGHT.
THE FEDERAL GOVERNMENT IS NOT
GOING TO RIDE TO THE RESCUE.
THERE IS NO CALVARY ON THE
HORIZON.
THAT IS WHY TODAY'S HEARING
MATTERS THAT IS WHY THIS
COMMITTEE MATTERS THAT IS WHY
STATE CONSUMER PROTECTION
MATTERS. FOR MORE THAN A HUNDRED
YEARS THE AMERICAN FINANCIAL
SYSTEM HAS RECOGNIZED THE
CRITICAL ROLE THAT STATES PLAY
IN OVERSEEING FINANCIAL MARKETS.
THE FOUNDATIONAL PREMISE OF ANY
STATE POLICE POWER IS THE
ABILITY TO OVERSEE THE WELL
BEING OF ITS CITIZENS.
THAT INCLUDES THE POWER TO
OVERSEE THE COMPANIES
RESPONSIBLE FOR THE FINANCIAL
FUTURES OF THE CITIZENS.
AND THE IMPACT OF STUDENT DEBT
ON THE LIVES AND LIVELIHOODS OF
BORROWERS IS UNIMPEACHABLE.
RESEARCH SHOWS THAT STUDENT LOAN
BORROWERS ARE LESS LIKELY TO BUY
HOMES START FAMILIES AND SEE FOR
RETIREMENT.
THEY ARE LESS LIKELY TO START
BUSINESSES OR SERVE THEIR
COMMUNITIES BUT THE IMPACT
DOESN'T END THERE THE RIPPLES
ACROSS NEIGHBORHOODS ACROSS THE
STATE.
WITH ONE HUNDRED AND THIRTY
BILLION DOLLARS AFFECTING NEARLY
FOUR MILLION PEOPLE ACROSS
CALIFORNIA.
THERE ARE FEW MARKETS AS
CONSEQUENTIAL TO THE WELL BEING
OF THIS STATE THEN THE STUDENT
LOAN MARKET.
RESEARCH NOW SHOWS THE EFFECTS
OF STUDENT DEBT ON COMMUNITIES
ACROSS THE ECONOMY INCLUDING
STYMIE ASSET ACCUMULATION
DRIVING INCOME RACIAL AND GENDER
INEQUALITY.
AND PREVENTING RESIDENTS FROM
ESTABLISHING LONG TERM TIES TO
THEIR COMMUNITIES.
AND WHEN THE STUDENT LOAN MARKET
FAILS COMMUNITY STRUGGLE.
AND THE STUDENT LOAN MARKET HAS
ALREADY FAILED.
COMMUNITY STRUGGLE AS THE
RESIDENTS FALL BEHIND IN
CRITICAL CREDIT MARKETS AND FIND
FEWER ECONOMIC AND JOB
OPPORTUNITIES THE STRUGGLE AS
LICENSE AS FEWER LICENSED
PROFESSIONALS ARE ELIGIBLE TO
SERVE IN HIGH DEMAND FIELDS.
THE STRUGGLE THAT THEIR AGING
POPULATIONS HAVE LESS FINANCIAL
SECURITY.
TAKING ACTION TO PROTECT STUDENT
LOANBORROWERS IS NECESSARY TO
THE HEALTH OF YOUR NEARLY THREE
TRILLION DOLLAR ECONOMY.
IT IS NECESSARY TO THE WELL
BEING OF YOUR NEARLY FORTY
MILLION CITIZENS IT IS NECESSARY
TO THE WELLBEING OF CALIFORNIA.
AND THAT IS WHY CALIFORNIA MUST
CONTINUE TO LEAD THE WAY. FOR
YEARS CALIFORNIA HAS BEEN A
NATIONAL LEADER IN THE FIGHT FOR
STUDENT LOAN BORROWERS RATES.
IN TWENTY SIXTEEN CALIFORNIA
PASSED ASSEMBLY MEMBER STONE
STUDENT LOAN SERVICING ACT
THIS LAW PROVIDED KEY BUILDING
BLOCK FOR THIS STATE TO ENGAGE
IN MEANINGFUL OVERSIGHT AND ROOT
OUT ILLEGAL PRACTICES THAT
PLAGUED THE STUDENT LOAN
INDUSTRY.
IN TWENTY EIGHTEEN ATTORNEY
GENERAL BASSIR STUDENT HAVE YET
ONE OF THE LARGEST YOU KNOW LOAN
SERVICERS IN THE COUNTRY FOR
HURTING EVERY TYPE OF BORROWER
WITH EVERY TYPE OF LOAN AT EVERY
STAGE OF REPAYMENT.
AND NOW GROUNDBREAKING NEW
LEGISLATION INTRODUCED BY
ASSEMBLY MEMBER STONE WILL MAKE
CALIFORNIA THE FIRST STATE IN
THE NATION TO GIVE STUDENT LOAN
BORROWERS THE SAME KIND OF
STRONG.
ENFORCEABLE RIGHTS LONG PROVIDED
TO CONSUMERS WITH MORTGAGES AND
CREDIT CARDS.
IT ALSO BRINGS REAL
ACCOUNTABILITY TO A STUDENT LOAN
INDUSTRY RESPONSIBLE FOR RIPPING
OFF BORROWERS AT EVERY TURN.
IT IS DEVILISH IS A NEW
CALIFORNIA STUDENT BORROWER
ADVOCATE TO HELP INDIVIDUALS
WHEN THEY RUN INTO TROUBLE.
AN INCREASE THE FIRST EVER
PUBLIC REPORT CARD FOR THE
STUDENT LOAN INDUSTRY ENSURING
REGULATORS LAWMAKERS AND THE
PUBLIC CAN SPOT EMERGING REST
THE BORROWERS.
MY ORGANIZATION THE STUDENT
BORROWER PROTECTION CENTER WITH
HONOR TO JOIN WITH NEXT GEN IN
CONSUMER REPORTS TO CO SPONSOR
AB.
THREE SEVENTY SIX DILIGENT
SUPERVISION PROACTIVE
ENFORCEMENT DELIBERATE RULE
MAKING SMART DATA COLLECTION AND
A DEEP COMMITMENT TO DEMANDING
ANSWERS WHEN CONSUMERS ASK FOR
HELP.
THESE ARE THE MEASURES THAT THIS
BILL WILL IMPLEMENT THE SAME
MEASURES THAT MADE THE CONSUMER
FINANCIAL PROTECTION BUREAU OF
FEARS ALLY FOR CONSUMERS.
THESE CRITICAL REFORMS ALSO
OFFER A PATH FOR STUDENT LOAN
BORROWERS BUT ALL CALIFORNIANS.
BECAUSE CONSUMER FINANCE AFFECTS
MORE THAN STUDENT LOAN BORROWERS.
IT'S ALL PEOPLE WHO ARE LEFT
BEHIND BECAUSE OF A BROKEN
SYSTEM.
CALIFORNIA FAMILIES ARE FACING
SIGNIFICANT CHALLENGES THAT THE
MAN SIGNIFICAN SOLUTIONS
SOLUTIONS THAT CAN MATCH THE
SERIOUSNESS AND SCALE OF THE
HARM PERPETUATE ACROSS THE
MARKET.
AS YOU'VE ALREADY HEARD FROM
DIRECTOR CORDRAY PROFESSOR PETER
SEN AND WHAT I AM SURE YOU ARE
CURRENTLY HEARING FROM YOUR
CONSTITUENTS.
IS THAT THE PEOPLE IS THAT
PEOPLE NEED HELP.
MILLIONS OF PEOPLE IN THIS STATE
NEED YOUR HELP.
AS THE FORMER ASSISTANT DIRECTOR
OF THE OFFICE FOR YOUNG
CONSUMERS I HEARD DIRECTLY FROM
A GENERATION BORN OF THE
FINANCIAL CRISIS.
A GENERATION FORCED TO INDOOR
CHALLENGES THAT THE PRIOR
GENERATION HAD NEVER FATHOM.
THE RATE OF YOUNG CONSUMERS
BEHIND ON THEIR CAR LOANS HAS
HIT RECORD LEVELS.
THEY ARE AMONG THOSE HARDEST HIT
BY OVERDRAFT FEES THAT SEND YOUR
FINANCES SPIRALING. TWENTY THREE
MILLENNIALS HAVE USED A PAYDAY
LOAN SENDING THEM INTO A VICIOUS
CYCLE OF DEBT.
AN ENTIRE GENERATION IS BEING
PREYED UPON BY FINANCIAL SYSTEM
SEEKING TO STRIP THEM OF THEIR
WEALTH BEFORE THEY EVER HAVE A
CHANCE TO EARN IT.
BUT THE PROBLEMS ARE NOT LIMITED
TO YOUNG CONSUMERS FOR FOUR
YEARS I HAD THE HONOR OF WORKING
FOR HOLLY PATRAS.
IN THE OFFICE FOR SERVICE MEMBER
AFFAIRS I HEARD FROM SERVICE
MEMBERS DOWN IN SAN DIEGO AT THE
MARINE CORPS RECRUIT DEPOT ABOUT
THE FINANCIAL PREDATORS THAT
LINE UP OUTSIDE THE GATES OF
INSTALLATIONS.
LIKE QUOTE BEARS AT A TROUT
STREAM.
I NEVER CALIFORNIA'S ADJUTANT
GENERAL AND HEARD TALES OF HOW
MILITARY CONSUMERS ARE TARGETED
BY SCHEMES FROM PENSION ADVANCES
THE PREDATORY LOANS.
BUT IT'S NOT JUST YOUNG PEOPLE
IT'S NOT JUST SERVICE MEMBERS
THE STAKES ARE SO MUCH BIGGER.
AT STAKE IS THE FUTURE OF THE
AMERICAN DREAM AND THE CHARACTER
OF OUR COUNTRY.
WHETHER THE AMERICAN DREAM WE
ALL RECOGNIZE HOUSE TO RAISE OUR
FAMILY A CAR TO GET TO WORK A
COLLEGE EDUCATION TO GIVE OUR
KIDS A BETTER LIFE.
WILL BE THE PROVINCE OF A SELECT
FEW WHILE THE REST HAVE THEIR
MONEY STOLEN AT EVERY TURN OR
WORSE FACE THE NILES AND
DISCRIMINATION BASED ON FACTORS
LIKE RACE OR SEX.
WHETHER WE LIVE IN A JUST AND
EQUITABLE SOCIETY WITH THE
AMERICAN DREAM IS OPEN AND
ACCESSIBLE TO ALL WHO SEEK IT.
OR WHETHER THAT AMERICA IS
RESERVED FOR ONLY A SELECT FEW.
CONSUMER FINANCE MATTERS BECAUSE
THE AMERICAN DREAM MATTERS TO
YOUNG PEOPLE TO SERVICE MEMBERS
TO ALL CONSUMERS TO THE THIRTY
MILLION ACROSS CALIFORNIA.
AND THE TWO HUNDRED AND SIXTY
MILLION ACROSS AMERICA.
THAT IS WHY CONSUMER PROTECTION
MATTERS AND THAT IS WHY
CALIFORNIA CONSUMER BUREAU
MATTERS.
A CALIFORNIA CONSUMER BUREAU CAN
DO WHAT THE FEDERAL GOVERNMENT
LACKS THE AUTHORITY TO DO.
A CALIFORNIA CONSUMER BROKEN
PUSH OTHER STATES THE FEDERAL
GOVERNMENT AND EVERYONE ELSE TO
DO BETTER.
A CALIFORNIA CONSUMER BROKEN
STAND UP WHEN THE FEDERAL
GOVERNMENT FALLS DOWN.
AND SO AS THIS COMMITTEE
UNDERTAKES THE IMPORTANT AND
NECESSARY WORK OF CRAFTING A
CALIFORNIA CONSUMER BEER OUT.
I WOULD LIKE TO OFFER SOME
OBSERVATIONS THAT I SPELL OUT IN
MORE DETAIL IN MY WRITTEN
TESTIMONY.
FIRST COMPLAINTS ARE A CRITICAL
COMPONENT OF CONSUMER DRIVEN
REFORM.
THE CFPB GAVE POWER TO AMERICAN
CONSUMERS BY GIVING THEM THE
ABILITY TO RAISE THEIR HAND AND
SAY THIS ISN'T RIGHT.
OVER A MILLION CONSUMERS WERE
HELP THROUGH THE C. APPEASE
SEABEES COMPLAIN PORTAL.
AND MORE IMPORTANTLY THE CFPB
LOOK AT THOSE MILLION COMPLAINTS
AND RECOGNIZE THAT THOSE WERE
NOT ISOLATED INCIDENTS. FOR
EVERY CONSUMER WHO COMPLAINED
ABOUT BEING RIPPED OFF TEN MORE
SAT SILENT DESPITE BEING HARMED.
BUT THROUGH THAT ONE COMPLAINT
THE CFPB COULD HELP ALL OF THEM.
FOR SIXTY YEARS THESE COMPLAINTS
WERE THE FOUNDATION OF THE CFPB
IS WORK.
THE CALIFORNIA CONSUMER BROKEN
DO MORE THAN REPLICATE THIS
APPROACH YOU CAN IMPROVE UPON IT.
INSTITUTIONS REGARDLESS OF SIZE
OR STRUCTURE SHOULD BE
STATUTORILY REQUIRED TO ENGAGE
IN A ROBUST COMPLAINT RESOLUTION
PROCESS.
AND MAKE THE CONSUMERS
COMPLAINTS PUBLIC.
SECOND DISTINCT POPULATIONS CAN
BRING UNIQUE INSIGHT.
CONSUMER DRIVEN REFORM IS NOT
LIMITED TO COMPLAINTS THE
DESIGNERS OF THE CFPB REALIZE
THAT SPECIAL POPULATIONS
INTERACT WITH CONSUMER FINANCIAL
MARKETS IN UNIQUE WAYS.
AND WITH THAT OFTEN COMES UNIQUE
PROBLEMS FROM THE OFFICE FOR
YOUNG CONSUMERS THE OFFICE FOR
SERVICE NUMBER AFFAIRS TO THE
OFFICE FOR OLDER AMERICANS.
DEDICATING RESOURCES TO
UNDERSTANDING THE PROBLEMS THAT
EXPERIENCES OF THESE POPULATIONS
WITH KEY TO THE CFPB SUCCESS.
A CALIFORNIA CONSUMER BUREAU CAN
DO THE SAME.
THE CALIFORNIA CONSUMER BUREAU
CAN ALSO MAKE SURE THAT THE
UNIQUELY DIVERSE POPULATION OF
THE STATE A REPRESENTATIVE.
AND OFFICE FOR NEW AMERICANS IN
OFFICE FOR ROLE AMERICANS AN
OFFICE FOR FINANCIAL INCLUSION.
THIRD MARKET SHOULD BE DEFINED
BY WHO NEEDS PROTECTION NOT WHAT
A PRODUCT IS CALLED OR WHETHER
AN INSTITUTION TAKE DEPOSITS.
ONE OF THE MOST SIGNIFICANT
LESSONS OF THE CRISIS WITH THAT
ALL FINANCIAL INSTITUTIONS
REGARDLESS OF HOW STRUCTURED
REGARDLESS OF PRODUCT OFFERED.
NEED ROBUST AND COMPREHENSIVE
OVERSIGHT IF WE WISH TO COUNTER
THE DEEP SEATED INTRINSIC
CONSUMER HARM THAT PLAGUES THE
MARKET.
THAT LESSON IS A TRUE NOW IS IT
IS WAS THAT.
CONSUMERS FINANCIAL LIVES DO NOT
FIT NEATLY INTO CATEGORIES LIKE
BANK AND NON BANK.
NOR CONSUMERS LIES ORGANIZED BY
THE TYPE OF PRODUCT THEY ARE
USING.
ANY MEANINGFUL EFFORT TO
SYSTEMICALLY REFORM THE CONSUMER
FINANCE MARKET MUST NECESSARILY
SHARE THIS PERSPECTIVE.
FOURTH BY CONSOLIDATING ALL
CONSUMER PROTECTION LAWS UNDER
ONE ROOF ONE AGENCY HAS THE
AUTHORITY AND ONE AGENCY HAS THE
ACCOUNTABILITY. ONE OF THE MOST
POWERFUL THINGS THE DODD FRANK
ACT DID WAS TO CONSOLIDATE THE
MOST ESSENTIAL CONSUMER
PROTECTION LAWS UNDER ONE ROOF.
THE TRUTH IN LENDING ACT TO THE
EQUAL CREDIT OPPORTUNITY ACT FOR
THE DAY ARE COULD THE FAIR DEBT
COLLECTION PRACTICES ACT TO THE
FAIR CREDIT REPORTING ACT.
THE CFPB HAD A RANGE OF
AUTHORITIES TO ENSURE THAT
CONSUMERS WERE PROTECTED.
A CALIFORNIA CONSUMER BUREAU
SHOULD ENJOY THE SAME RANGE OF
AUTHORITIES IN ORDER TO HOLD
COMPANIES ACCOUNTABLE FOR THE
SAME RANGE OF HARM.
IN CLOSING.
I WOULD LIKE TO ADDRESS SOME OF
THE COMMON RETORTS I KNOW YOU
WILL HEAR AS YOU UNDERTAKE THIS
AMBITIOUS AGENDA ON BEHALF OF
THE PEOPLE YOU SERVE.
SOME WILL TELL YOU THAT YOU CAN
ACT.
OR THAT THIS IS IN WHAT STATE
GOVERNMENT STILL.
SOME WILL SAY THAT YOUR
ASPIRATIONS ARE TOO GREAT AND
THAT YOU MUST ACCEPT THE STATUS
QUO.
THEY WILL SEE THAT THIS IS THE
WORK OF THE FEDERAL GOVERNMENT
AND SUGGEST THAT STATES MUST
ALWAYS PLAY SECOND FIDDLE.
THEY WILL TELL YOU TO TEMPER
YOUR EXPECTATIONS AND AMBITIONS
OF WHAT IS POSSIBLE.
THEY ARE WRONG THEY ARE WRONG
BECAUSE THEY DO NOT UNDERSTAND
THIS UNIQUE MOMENT IN TIME.
THEY DO NOT UNDERSTAND THE WILL
OF THIS COMMITTEE WERE OF THIS
ASSEMBLY TO ACT OF CALIFORNIA TO
ACT. TO SHOW A DIFFERENT PATH
THAN WHAT IS BEING OFFERED THREE
THOUSAND MILES AWAY. ONE THAT
PUTS PEOPLE ABOVE SPECIAL
INTERESTS ONE THAT STANDS OUT
FOR BORROWERS RIGHTS WHEN THAT
UNDERSTANDS THAT THE WELL BEING
OF THIS STATE OF THIS NATION IS
PREMISED ON PROTECTING IT'S
CONSUMERS WITH ITS FULL RANGE OF
AUTHORITIES.
WHEN THAT IS WILLING TO OVERCOME
INERTIA AND IN ACTION?
THEY ARE WRONG BECAUSE WE KNOW
THAT THIS COMMITTEE WILL STAND
UP IT WILL STAND UP FOR THE
THIRTY MILLION PEOPLE IN THIS
STATE CHASING THE AMERICAN DREAM.
AND IT WILL SHOW THEM THAT THERE
IS A DIFFERENT PATH.
THANK YOU [inaudible]
THANK YOU.
COMMITTEE ANY QUESTIONS.
ASSEMBLYMEMBER STONE AND THEN
THE PHONE NUMBER CERVANTES.
SAMBAR GABRIEL.
I THINK THE FIRST HALF OF THAT
IS THE CLOSE WHEN I PRESENT MY
BILL THANK.
YOU WE WE DON'T EVEN.
THANK YOU IN AND YOU PROVIDED A
GREAT DEAL OF TECHNICAL
ASSISTANCE AS WE TRY TO SORT
THROUGH.
DEALING WITH THAT THE LICENSING
BILL AND AND WE WERE ABLE TO GET
DONE IND OF WHAT WE COULD GET
DONE IN THAT BILL AND FROM THE
LICENSING PROGRAM.
BUT I THINK THERE ARE A LOT OF
GAPS THAT ARE STILL THERE AND I
THINK FROM YOUR TESTIMONY IN
PRIOR TESTIMONY DATA COLLECTION
IS OBVIOUSLY ONE OF THE KEY
COMPONENTS CAN YOU TALK ABOUT.
HOW CFPB WAS ABLE TO AND TWELVE
WHAT ASPECT DATA COLLECTION
PLAYED?
IN HOW YOU WERE THEN ABLE TO
ENFORCE AND AND MANAGES FIRST I
KNOW YOUR EXPERTISE AND STUDENT
LOANS AND SO WE CAN TALK ABOUT
THAT BUT I THINK IT TRANSLATES
TO THE BIGGER QUESTIONS ABOUT.
SO YOU KNOW ONE OF THE
FUNDAMENTAL PREMISES OF THE
CREATION OF THE BUREAU WAS A
REAL REALIZATION AFTER THE
FINANCIAL CRISIS.
THAT -- HOW COULD THE REGULATORS
HAVE MISSED THIS HOW COULD THIS
HAVE HAPPENED?
AND THEY INSTILLED THE BUREAU
BOTH THAT I THOUGHT ALREADY AND
THE MIND SET TO ENSURE THAT WE
WERE AWARE OF EMERGING RISKS.
AND RIGHT NOW I CAN THINK OF
REALLY NO LARGER AND MERGING
RISK THEN THE STUDENT LOAN
MARKET WE THERE'S ONE POINT FIVE
TRILLION DOLLARS IN STUDENT LOAN
DEBT -- ONE POINT TWO ONE POINT
THREE TRILLION DOLLARS OF THAT
DEBT HE IS HELD BY THE
DEPARTMENT OF EDUCATION BUT
SERVICE BY INDIVIDUAL COMPANIES.
AND IT'S ENTIRELY A BLACK HOLE.
THIS IS SOMETHING THAT THE
BUREAU TRIED TO WORK ON WHERE WE
ACTUALLY SUBMITTED -- A MARKET
MONITORING REQUEST WHICH IS
PROVIDED UNDER THE DODD FRANK
ACT TO GET A BETTER
UNDERSTANDING OF WHAT'S
HAPPENING IN THE STUDENT LOAN
MARKET HOUSE SERVICERS ARE
OPERATING WHERE BORROWERS ARE
GETTING HURT.
UNFORTUNATELY -- THIS IS JUST
ONE MORE EXAMPLE OF A VERY
COMMON SENSE STRAIGHT FORWARD.
A POLITICAL EXERCISE THAT WAS
COMPLETELY STYMIED SO THIS WAS
AN EFFORT THAT WENT INTO THE
OFFICE OF MANAGEMENT AND BUDGET --
IN -- TWENTY SEVENTEEN AND HAS
JUST NEVER COME OUT.
SO RIGHT NOW THIS EFFORT TO
BETTER UNDERSTAND WHAT'S
HAPPENING IN THE MARKET --
HASN'T EVEN GOTTEN OFF THE
GROUND AND NO ONE KNOWS IF IT
EVER WILL AT THE FEDERAL LEVEL.
AND THAT'S WHAT MAKES YOUR
LEGISLATION SO CRITICAL IS A
STATE LIKE CALIFORNIA A QUICK
THROUGH DB -- WORTH THROUGH A
NEW AGENCY TO GET ITS HANDS ON
WHAT'S HAPPENING TO CALIFORNIA
BORROWERS IS NOT ONLY ESSENTIAL
TO BETTER UNDERSTAND THEN
FORSMAN SUPERVISION RULE MAKING.
COULD BE A REAL.
HELP TO THE REST OF THE COUNTRY
AS THEY TRY TO TACKLE THE
STUDENT DEBT CRISIS.
AND IT SEEMS AND AND OF HOW
EXACTLY THAT THREAD IT SEEMS IT
WHAT WHAT WE DID ON STERN
LANCERS HIS WAS WITH THE BE --
ANDWE TALK ABOUT IN THE NEW
LEGISLATION A STUDENT LOAN
ADVOCATE BUT THAT PROBABLY
SHOULD BE SOMEBODY SEPARATE AND
OUTSIDE OBVIOUSLY OF D. B. S. O.
AND I WOULD HOPE THAT IF WE CAN
BE TALKING ABOUT.
SOME KIND OF THE CONSUMER
PROTECTION BUREAU THAT'S WHERE
THAT SHOULD RESIDE AND I I HOPE
WE CAN STILL HAVE THE
CONVERSATION ABOUT LOOKING FOR A
STUDENT ON ADVOCATE.
BUT I AGREE THAT WE NEED TO TAKE
ON SORT OF LITTLE THE LARGER
QUESTION ABOUT CONSUMER
PROTECTION IN CALIFORNIA AND
MAKE SURE WE'RE NOT IN THE END
PIECE MEALING SOME OF THESE
PIECES TOGETHER AND AND I THINK.
THAT YOU TO SORT OF START OUT
WITH THE STUDENTS BUT KIND OF
TIED SOME OF THE REST OF THAT
TOGETHER.
YES I THINK IT DEFINITELY
CRITICAL I'M OBVIOUSLY BIASED
TOWARDS THE POSITION BECAUSE
THAT WAS MY JOB FOR A FEW YEARS --
BUT I THINK HAVING.
IN DIRECTOR CORDRAY SAID THIS
MUCH BETTER THAN I COULD HAVING
AN AGENCY WHOSE SOLE MISSION IT
IS TO LOOK OUT FOR CONSUMERS.
AND THEN BEING LUCKY ENOUGH FOR
THE THE SUBSET OF THAT.
BUILDING THAT LOOKED OUT FOR
STUDENT LOAN BORROWERS EVERY DAY
I JUST SAW THE DIFFERENCE WHERE --
ME AND MY TEAM WORK UP EVERY DAY
ABOUT THINKING ABOUT STUDENT
LOANS.
NOT FROM AFFORDABILITY NOT FROM
AN ACCESS CRITICALLY IMPORTANT
STUFF BUT SIMPLY FROM A CONSUMER
PROTECTION ANGLE -- WAS
INCREDIBLE TO DO NOT ONLY THE
BORROWERS WE HELPED BUT ADDING
LIKE A REALLY VALUABLE PART OF
THE DISCUSSION IN WASHINGTON I
THINK I'LL BE HERE IN SACRAMENTO.
ABOUT HOW YOU HELP BORROWERS
AFTER THEY TAKE ON THE DEBT SO --
I THINK THAT -- IS ALSO VERY
HELPFUL TO HAVE ONE PERSON IN
GOVERNMENT SO WHEN YOU'RE
CONSTITUENTS COM MORE PEOPLE
JUST PICK UP THE PHONE THEY KNOW
WHERE TO GO TO TRY TO GET HELP.
AND THAT PARTS.
PROVING VERY POPULAR.
AS PEOPLE ARE WEIGHING IN ON
WHERE THAT POLICY IS AND AND
HAVING A PLACE TO GO.
SO THAT.
AS WE AS WE TRIED TO DO THE
LICENSING THING AND WE HEARD
FROM SOME THE LARGER SERVICERS
WHO WERE COSTLY TELLING US --
THERE'S A GOOD ACTORS THERE'S A
GOOD ACTORS.
NOW.
THE ATTORNEY GENERAL IS THAT
CALIFORNIA'S SUING THEM I KNOW
THEY'RE BEING SUED IN MANY MANY
OTHER STATES THAT THEY'RE DOING
BUSINESS.
SO IT'S SORT OF HARD TO FIGURE
OUT.
WHO ULTIMATELY THE GOOD ACTORS
ARE?
NOW THAT THERE'S AND I THINK
THERE'S AT LEAST ONCE WE DID THE
STUDENT LOAN SERVICING.
OVERSIGHT THE LICENSING PROGRAM
THERE WERE OVER A DOZEN STATES
THAT ARE DOING THE SAME THING
NOW THOSE.
THEY'RE RUNNING BACK TO THE
FEDERAL GOVERNMENT TO THE
DEPARTMENT OF EDUCATION LOOKING
FOR A LITTLE BIT OF COVER AND
CLAIMING SO WE'RE WE'RE GOING TO
HAVE TO THREAD THE ISSUE OF
PREEMPTION THERE NOW I KNOW THE
DODD FRANK IT'S FAIRLY CLEAR.
THAT STATES HAVE THE ABILITY TO
GO FORWARD AND WE'RE TRYING TO
RELY ON SOME OF THAT LANGUAGE.
HOUSE HOW HOW MUCH PREEMPTION
ESPECIALLY WHERE THE FEDERAL
GOVERNMENT SORT OF WANTS TO
WEIGH IN OR WANTS TO PROTECT
THIS INDUSTRY OVER.
THE BORROWERS AND AND OVER OUR
CONSTITUENTS.
BUT HOW CAN THEY BY DOING
NOTHING.
MAKE MAKE A VALID CLAIM OF
PREEMPTING US FROM BEING ABLE TO
TRY TO ADDRESS THIS ISSUE AND
AND PROVIDE A A CLEAR PATH FOR
STUDENT BORROWERS.
SO A COUPLE POINTS SO YOU KNOW I
THINK THE FIRST POINT IS WHO ARE
THE GOOD ACTORS.
I THINK THE GOOD ACTORS ARE THE
ONES WHO -- OPEN THEMSELVES UP
TO SUPERVISION AND SAY WE HAVE
NOTHING TO HIDE AND ALSO WE
THINK THE SUPERVISORY PROCESS IN
WHICH EXAMINERS FROM THE
GOVERNMENT COME IN AND TELL US
WHAT WE'RE DOING RIGHT BUT TELL
US WHAT WE'RE DOING WRONG IN A
CONFIDENTIAL PROCESS -- THOSE
THE PEOPLE I THINK THAT YOU
SHOULD BE LOOKING OUT FOR THE
PEOPLE ARE SAYING.
WE RECOGNIZE THAT WE ARE
PROVIDER OF CONSUMER FINANCIAL
PRODUCTS AND SERVICES AND WE
WELCOME THE OPPORTUNITY FOR
SUPERVISION OVERSIGHT BECAUSE WE
THINK WE'RE DOING A GOOD JOB WE
COULD ALWAYS BE DOING BETTER.
WHAT SCARES ME BASED ON MY PRIOR
OR THE COMPANIES WHO ARGUE THAT
THEY'RE ABOVE THE LAW WHICH
TAKES YOU TO YOUR SECOND POINT?
AND BOTH INDUSTRY AND
UNFORTUNATELY THE CURRENT
ADMINISTRATION HAVE MADE THESE
ARGUMENTS THAT FOLKS LIKE YOU
FOLKS LIKE THIS STATE ARE
SOMEHOW TRYING TO REGULATE THE
FEDERAL GOVERNMENT.
NOTHING COULD BE FURTHER FROM
THE TRUTH.
STUDENT LOAN SERVICERS ARE SOME
OF THE LARGEST FINANCIAL
SERVICES COMPANIES IN AMERICA --
SOME OF THESE COMPANIES SERVICE
OVER FOUR HUNDRED AND TWENTY
FIVE BILLION DOLLARS IN CONSUMER
DEBT -- TO GIVE YOU SOME SENSE
OF WHAT SIZE THIS THIS COMPANY.
IS RESPONSIBLE FOR ONE OUT OF
EVERY TEN DOLLARS OF NON
CONSUMER DEBT IN AMERICA.
AND THEY ARE ARGUING THAT YOUR
STATE LAWS DON'T APPLY -- AND I
JUST THINK THAT IS WRONG I THINK
ESSENTIALLY WHAT THAT BILL DID
WHAT OTHER STATES ARE TRYING TO
DO NOW WHAT THE EXTENSION BILL
THE BAR A BILL OF RIGHTS DOES.
IS JUST RECOGNIZE THE
TRADITIONAL POLICE POWERS THAT
THIS STATE HAS ALWAYS HAD THAT
IT CURRENTLY USES ACROSS A RANGE
OF NON BANK PROVIDERS -- AND
MERELY EXTENDS THAT. TO FOR MANY
OF YOUR CONSTITUENTS THE MOST
IMPORTANT FINANCIAL COMPANY IN
THEIR LIVES WHICH IS THE COMPANY
RESPONSIBLE FOR TRYING TO HELP
THEM PAY OFF THEIR DEBT.
SO I KNOW THE ARGUMENTS ARE
THERE I KNOW THAT THEY'RE A
SOURCE OF CONSTERNATION -- I
THINK IN MANY REGARDS THE EFFORT
IS TO KIND OF THROW A LOT OF
SMOKE UP IN THE AIR AND FIGURE
OUT WHICH LEGISLATURE'S WHICH
THINKING DEPARTMENTS WHICH
ATTORNEY GENERAL'S.
ARE WILLING TO PUSH THRILL AND
WHERE I THINK STUDENT LOAN
BORROWERS ARE.
SHOULD BE VERY APPRECIATIVE OF
YOUR EFFORTS OF THIS COMMITTEE'S
EFFORTS OF THE STATE'S EFFORTS
TO PUSH PAST A LOT OF THE
ARGUMENTS WE'VE HEARD BECAUSE
AGAIN THIS IS A GOOD FOR MANY
PEOPLE THE LARGEST.
CONSUMER FINANCIAL
PRODUKTIVNOSTI CHEN AND THE
COMPANIES AT THE CENTER OF THIS
JUST AREN'T DOING THE JOB.
AND THAT THERE IS A THERE IS A
ROLE FOR STATES TO PLAY.
IN FOR A LOT OF INDIVIDUALS IT'S
THEIR SINGLE LARGEST THAT OR
THEIR SECOND BECAUSE STUDENT
LOAN THAT IS REALLY ONLY SECOND
BEHIND HOME MORTGAGES.
BUT YET HOME MORTGAGES CREDIT
CARDS CAR LOANS THERE ARE.
STRONGER REGULATORY SCHEMES FOR
PROTECTIONS THERE THERE'S VERY
LITTLE IF ANYTHING FOR STUDENT
LOAN.
BORROWERS TO TO RELY AND WE'RE
WE'RE THAT'S WHAT WE'RE THE GAP
WERE ULTIMATELY TRY TO FAIL AND
YOU DON'T YEAH.
EXACTLY RIGHT AND YOU DON'T HAVE
TO TAKE MY WORD ON IT SO
SECRETARY MINU CHIN PUT OUT A
BIG REPORT ABOUT THE STATE OF
THINK FINTECH IN OTHER EMERGING
TECHNOLOGIES.
AND THERE WAS A PRETTY
SIGNIFICANT SECTION TALKING
ABOUT STUDENT LOANS AND STUDENT
LOAN SERVICING.
AND HIS WORDS WERE THE SAME
THERE ARE NO FEDERALLY
GUARANTEED STANDARDS FOR STUDENT
LOAN BORROWERS AGAIN THIS ISN'T
LIKE A POLITICAL PARTISAN ISSUE.
IT IS A GENERATION OF BORROWERS
OLD RURAL URBAN YOU NAME IT --
WHO ARE REALLY STRUGGLING AND IF
THE FEDERAL GOVERNMENT'S ISN'T
GOING TO DO ITS JOB -- THEN I
THINK IT'S INCUMBENT UPON THE
STATE'S TO FILL IN THE GAP.
AND SO FAR WHAT WE'VE DONE HAVE
BROUGHT A LOT OF OTHER STATES
ALONG SO I THINK THERE ARE
STATES THAT ARE.
CERTAINLY WATCHING CALIFORNIA
WHAT WE'VE DONE AND WHAT WE WILL
DO AND I THINK WE NEED TO TO
TAKE THAT VERY SERIOUSLY I THINK
JUST ONE QUICK THING I THINK YOU
KNOW.
YOU STARTED THIS YOU KNOW A VERY
LONG TIME AGO LIKE THIS WAS NOT
ABOUT THE TRUMP ADMINISTRATION'S
WAS NOT ABOUT THAT TO DIVIDE US.
THERE'S BEEN FAILURES ACROSS THE
STUDENT LOAN SERVICING INDUSTRY
ACROSS PARTIES ACROSS THE
MINISTRATIONS -- AND I THINK
IT'S A TESTAMENT TO YOU THIS
COMMITTEE IN THIS STATE TO
REALIZE THAT.
REGARDLESS OF WHO'S SITTING IN
THE WHITE HOUSE OF WHO WAS AT
THE BUREAU THIS WAS A CENTRAL --
RESPONSIBILITY AN OPPORTUNITY
FOR THE STATE TO STAND UP FOR
ITS PEOPLE REGARDLESS OF WHO IS
IN THE WHITE HOUSE AND I THINK
THAT IS -- THAT'S A TESTAMENT TO
YOUR WORK WELL AND THAT'S TRUE
BECAUSE WE STARTED THIS AND THE
NEXT AT ONE POINT ONE OF THE
STEPS WE KNEW WE NEEDED TO TAKE
WAS TO HARMONIZE.
THE STATE'S LAW WITH THE FEDERAL
REGULATORY SCHEME THAT WAS
COMING OUT THAT'S SCHEME
DISAPPEARED SO THERE WAS NOTHING
TO HARMONIZE WITH WE WERE SORT
OF LEFT ON OUR OWN.
THAT'S WHERE WE ENDED UP AND
THAT WAS WHAT LED TO THE PASSING
OF THE STUDENTS SERVICER
LICENSING PROGRAM THANK YOU.
THANK YOU REMEMBER CERVANTES YES
THANK YOU WHAT YOU DID -- TOUCH
ON A QUESTION THAT I HAD BUT I
JUST WANT TO SPEAK AS A
MILLENNIAL -- MILLENNIALS ARE A
GENERATION SHAPED BY EXPERIENCES
LIKE THE GREAT RECESSION AND
HIGH LEVELS OF STUDENT DEBT AND
SO THIS ISSUE IS A VERY MUCH OF
A CONCERN TO ME AND THAT I AM
ADDRESS SEEN IN.
CERTAIN POLICY ITEMS AS WELL
THIS LEGISLATIVE SESSION -- BUT
THANK YOU FOR GIVING US SOME
ACTIONABLE STEPS THAT WE CAN
TAKE A AS A STATE TO ADDRESSES
SO THANK YOU.
AS A MEMBER GABRIEL.
THANK YOU VERY MUCH MADAM CHAIR
AND THANK YOU SIR FOR YOUR
TESTIMONY AND FOR YOUR SERVICE
IN THE OBAMA ADMINISTRATION IT'S
VERY MUCH APPRECIATED ALSO VERY
MUCH CONCERNING TO HEAR YOU
TESTIFY ABOUT THE CURRENT CFPB
IN ITS.
EFFORTS TO PRIORITIZE
CORPORATIONS ABOVE CONSUMERS AND
THE STRUGGLE FACED BY.
SO MANY STUDENT LOAN BORROWERS
WHICH AS YOU PUT IT DEEPLY
IMPACTS THEIR PROSPECTS FOR
CHEATING THE AMERICAN DREAM AND
THE FACT THAT THE REALLY AS YOU
AS YOU DESCRIBED IT NO LARGER
EMERGING REST IN STUDENT LOAN
DEBT I MEAN HE'S JUST VERY
CONCERNING TESTIMONY YOU'RE
CERTAINLY HAVE A LOT.
OF CREDIBILITY ON THAT ISSUE.
GIVEN YOUR EXPERIENCE IN YOUR
VANTAGE POINT WOULD YOU THINK
ARE THE MOST IMPORTANT STEPS THE
CALIFORNIA CAN TAKEN GIVEN THE
URGENCY OF THIS MATTER WHAT
WOULD YOU SUGGEST THAT WE
PRIORITIZE.
SO -- A COUPLE THINGS I MENTION
MY TESTIMONY I THINK -- ASSEMBLY
MEMBER STONE'S BILL -- IS
CRITICAL -- BOTH FOR THIS STATE
AND I THINK AS WE'VE SEEN WITH
PRIOR WORK OF THIS COMMITTEE.
QUICKLY BECOMES THE ROAD MAP
THAT OTHER STATES WILL FOLLOW SO
GIVING BORROWER GIVING BORROWERS
THE SAME RIGHTS AND PROTECTIONS
THAT THEY HAVE IF THEY HAD A
CREDIT CARD OR MORTGAGE YOU HAVE
THE OPPORTUNITY TO DO.
AT THE STATE LEVEL WHEN IT COMES
TO STUDENT LOANS.
MAKING SURE THAT WHEN BORROWERS
GET RIPPED OFF THEY HAVE THE
RIGHTS AND THE ABILITY TO SEEK
JUSTICE -- AT THE STATE LEVEL IS
CRITICALLY IMPORTANT.
AND THEN ALSO MAKING SURE THAT
THIS STATE IS ON THE FOREFRONT
OF BETTER OVERSEEING THE MARKET
BOTH IN TERMS OF THE ADVOCATE.
AND THE MARKET BOTHERING
EXPERIENCES I THINK WOULD GO A
LONG WAY TOWARDS HELPING.
THAT MILLIONS OF STUDENT LOAN
BORROWERS IN THIS STATE.
I THINK THIS IS THE SECOND PIECE
I THINK THIS GOES TO SEVEN
NUMBER SO IT'S COMMON IS THERE'S
GONNA BE SOME BATTLES THAT COME
UP I THINK THAT THERE IS A
CONCERTED EFFORT.
BY INDUSTRY -- AND THE CARD
ADMINISTRATION AND SOME HARD
SOMETIMES IT'S HARD TO TELL
WHERE ONE ENDS AND WHERE THE
OTHER BEGINS TO ESSENTIALLY MAKE
THE PROCESS OF TRYING TO HELP
STUDENT LOAN BORROWERS.
AS PAINFUL AS POSSIBLE FOR YOU
GUYS FOR YOUR BANKING DEPARTMENT
FOR YOUR ATTORNEY GENERAL -- AND
SO FAR WE'VE SEEN THEM -- STICK
IT OUT.
TAKEN SOME PRETTY BIG FIGHTS AND
I THINK ENSURING AS YOU WANT
THEM TO BE TAKING I THINK WILL
BE CRITICAL -- BECAUSE AT THE
SAME EVER STONE'S BILL I THINK
THE SUBSEQUENT BILL WILL REALLY
EMPOWER THEM TO DO A REALLY GOOD
JOB ON BEHALF OF THE BORROWERS
IN THE STATES.
BUT THEN ENCOURAGING OVERSEEING
AND MAKING SURE THE FOLLOW
THROUGH IS THERE I THINK IT'S
INCREDIBLY IMPORTANT.
THANK YOU VERY MUCH.
THANK YOU THANK YOU VERY MUCH
MISTER FROM AND FOR YOUR
TESTIMONY AND YOUR EXPERIENCE.
NOW WE HAVE OUR FINAL PANEL --
IT'S RELATED TO ENFORCEMENT AND
WE'RE GONNA HAVE AS TO ST MARTIN
DALE FROM CONSUMER REPORTS SUREN
VELASQUEZ FROM GREEN LINING
INSTITUTE AND CAT TAYLOR FOUNDER
OF BENEFICIAL STATE BANK -- THAT
WE'RE GOING TO INVITE THEM UP
[inaudible]
TO TESTIFY
.
WE WILL HAVE YOU GO AHEAD ALL
RIGHT THANK YOU THANK YOU CHAIR
AND MEMBERS OF MY NAME IS
SUZANNE MARTIN DOWN SENIOR
POLICY COUNSEL AT CONSUMER
REPORTS FORMALLY KNOWN AS
CONSUMERS UNION.
I WILL MAKE SOME THOUGHT USE MY
TIME TO MAKE SOME BRIEF REMARKS
TO SORT OF DISTILLED DOWN WHAT
WE'VE JUST HEARD FROM SEVERAL
ACTS OFFICIALS -- AT THE
CONSUMER FINANCIAL PROTECTION
BUREAU WHO ARE CLEARLY A WEALTH
OF INFORMATION AND INSIGHT INTO
THE WORKINGS OF THE BUREAU AND
THE LESSONS LEARNED FOR STATES.
SO AS WE APPROACH THE DISCUSSION
OF ENFORCEMENT WE'VE HEARD
DIFFERENT FLAVORS OF WHAT
ENFORCEMENT MEANS SOMETIMES IT
REALLY DOESN'T MEAN.
INVESTIGATING BRINGING A CASE
LIKE THE CALIFORNIA TRADE
GENERAL HAS JUST ON AGAINST NOW
VI FOR LOAN SERVICING
FAILURES -- IT CAN MEAN WITH THE
DEPARTMENT OF BUSINESS OVERSIGHT
RECENTLY DIDN'T FILING AN ACTION
TO REVOKE THE LICENSE OF FAST
MONEY ON AUTO AUTO TITLE UNDER
THAT WAS EVADING THE LAW.
AND ENGAGING IN -- ALLEGEDLY
DECEPTIVE MARKETING PRACTICES
BUT IN THE BROADER SENSE -- OF
WHAT IN FORSMAN CAN LOOK LIKE IN
THAT CAN MEET ADDITIONAL TOOLS
THAT CREATE THE CONDITIONS OF
POSSIBILITY FOR STRONG
ENFORCEMENT AND SO THE THE TOOLS
OF THE CFPB HAS IN PARTICULAR.
AROUND SUPERVISION --
SUPERVISION AN EXAMINATION
AUTHORITY TO UNCOVER POTENTIAL
VIOLATIONS OF CONSUMER
PROTECTION LAWS RESEARCH IN
MARKET MONITORING FUNCTIONS
ENABLE.
THE AGENCY TO COMPEL DATA AND
IDENTIFY TRENDS RESEARCH
PUBLICATION OF PUBLIC EDUCATION
GETTING THE WORD OUT ABOUT THESE
PROBLEMS AND AND AND LETTING THE
PUBLIC KNOW -- THAT THERE ARE
SYSTEMIC PROBLEMS WITH STUDENT
LOANS ARE SYSTEMIC PROBLEMS OF
MORTGAGES I'M COLLECTING
CONSUMER COMPLAINTS -- AND
HAVING A PUBLICLY SEARCHABLE
DATABASE AGAIN ENABLES THAT I
TRANSPARENCY IN DIALOGUE BETWEEN
THE AGENCY AND THE PUBLIC THESE
ADDITIONAL TOOLS.
ALL GIVEN TO THE BUREAU WITH
COMPREHENSIVE AUTHORITY OVER
ENTIRE INDUSTRY.
WITH THE CONSUMER PROTECTION
MISSION BACKING IT UP THAT IS
WHAT HAS MADE THE BUREAU -- IS
SO SUCCESSFUL IN THE PAST AT
HELPING US LEARN MORE ABOUT THE
PROBLEMS IN THE MARKET PLACE IN
ASSURING BETTER STANDARDS AND
AND AT THE END OF THE DAY
RETURNING A LOT OF MONEY
BILLIONS OF DOLLARS BACK. TO
CONSUMERS SO THE QUESTION IS YOU
KNOW HOW DO WE APPROACH IS
REALLY IMPORTANT IN COURT HERE
AT THE STATE LEVEL WE HAVE
EXISTING AGENCIES THAT DO PLAY
CONSUMER PROTECTION ROLE WE HAVE
THE DEPARTMENT OF BUSINESS
OVERSIGHT WE HAVE.
THE CALIFORNIA ATTORNEY GENERAL
THAT HAVE CERTAIN ASPECTS OF OF
THE CONSUMER PROTECTION
FRAMEWORK BUT WE NEED SOMETHING
MORE UNIFIED MORE COMPREHENSIVE
AND I WOULD SAY -- COORDINATED
SO I THINK THEY'RE LOOKING FOR A
COMPREHENSIVE AND COORDINATED
APPROACH TO ENSURING CONSUMER
FINANCIAL PROTECTION IN
CALIFORNIA.
IRRESPECTIVE OF YOUR SETTING
ASIDE FOR NOW HOW WE'RE LITTLE
GOING TO STAND THIS UP I THINK
THOSE NEED TO BE ON OUR NORTH
STAR PRINCIPLES FOR HOW WE MOVE
FORWARD FROM HERE ON OUT.
NOW OUR PREVIOUS PANELISTS
MENTIONED SEVERAL EXAMPLES OF
HOW THE BUREAU WAS ABLE TO BE A
AFFECTED CERTAINLY TALKED ABOUT
THE COMPREHENSIVE TOOLS -- AND
THE AND THE INDUSTRY WIDE
JURISDICTION THE BUREAU HOUSE BY
D°ûI HIGHLY JUST A FEW
ADDITIONAL ITEMS THAT SHOW HOW
HAVING.
A NEW UNIT OR A NEW AGENCY ISN'T
NECESSARILY TO PUT COULD HAVE
BEEN A FACTOR CAN MAKE.
THE WHOLE BETTER AND GREATER
THAN THE SUM OF ITS PARTS -- BY
HAVING THAT FORCE MULTIPLIER OF
THE CONSUMER PROTECTION FOCUSES
SO ONE EXAMPLE WE'VE TALKED
ABOUT THE MILITARY LENDING ACT --
WHICH SINCE TWO THOUSAND AND SIX
IT WAS ENACTED UNDER THE GEORGE
W. BUSH ADMINISTRATION I'M HAS
ENSURED THAT ACTIVE DUTY SERVICE
MEMBERS ARE NOT CHARGED MORE
THAN 36% APR.
IT'S BEEN IT WAS ON THE BOOKS
FOR SEVERAL YEARS BEFORE THE
CFPB CAME ON THE SCENE WHEN THEY
FINALLY HAD THE SUPERVISION
AUTHORITY WITH THE CONSUMER
PROTECTION LANDS OVER BANKS THEY
WERE ABLE TO UNCOVER POTENTIAL
VIOLATIONS.
AND A PUNCTURE PUBLISHED A
REPORT BUT THEN HELD A
ENCOURAGED THE DEPARTMENT OF
DEFENSE WHICH OTHERWISE OF
MINISTERS OF THE MILITARY
LENDING ACT TO AMEND ITS
REGULATIONS TO CLOSE LOOPHOLES
THAT'S A GREAT EXAMPLE OF THE
CFPB.
PROVIDING USING OTHER TOOLS NOT
PER SE ENFORCEMENT LAWSUITS BUT
USING OTHER TOOLS TO HELP THE
DOD DOING A BETTER JOB OF
IMPLEMENTING AND OVERSEEING THE
MILITARY LENDING ACT.
ANOTHER ONE THAT IS -- YOUR NEAR
AND DEAR TO ALL OF US WHO HAVE
STUDENT LOANS -- IS THIS YOU
THESE ROLE IN MAKING THE
DEPARTMENT OF EDUCATION BETTER I
AS AS A AS A HAS ALREADY BEEN
TALKED ABOUT YOU KNOW THE
DEPARTMENT OF EDUCATION.
OF COURSE OVERSEAS THE FEDERAL
STUDENT LOAN PROGRAMS AND IT
DOES ISSUE AID TO STUDENTS AND
HAS OVERSIGHT ROLE OF SCHOOLS
BUT IT WAS NEVER SET UP AS A
CONSUMER PROTECTION AGENCY I
DON'T THINK THAT ANYONE EVER
EXPECTED THE DEPARTMENT OF
EDUCATION TO BECOME A TRILLION
DOLLAR BANK.
IN THE LAST SEVERAL YEARS AND SO
IT HAS A MASSIVE PORTFOLIO OF
LOANS AND THE SERVICING OF THOSE
LOANS THEY HAVE LARGELY
OUTSOURCED TO TO PRIVATE
COMPANIES TO THE LOAN SERVICERS --
AND SO AND OF COURSE ALSO BEARS
MENTIONING THAT IN THE EARLY
PRIVATE STUDENT LOAN MARKET THE
DEPARTMENT HAS NO ROLE SO WHEN
THE CPB WAS ABLE TO STEPIN. TO
SUPERVISE -- BOTH FEDERAL AND
PRIVATE EDUCATION LOAN SERVICERS
HANDLE COMPLAINTS ON COVER
PROBLEMS AND WORK WITH THE
DEPARTMENT -- THE CPP WAS ABLE
WAS BETTER ABLE TO ENSURE THAT
SOMEONE WAS TAKING THAT KIND OF
COLD COHERENT COMPREHENSIVE AND
CONSUMER PROTECTION FOCUSED LOOK
AT THE PROBLEM OF STUDENT LOANS
AT ALL OF US MYSELF INCLUDED ARE
STRUGGLING TO GET GET OUT FROM
UNDER -- AND I WANT TO
HIGHLIGHTS ONE SPECIFIC AREA
WHERE THE WHERE THE C. P. B.
REALLY WHAT WAS IN THE RIGHT
PLACE AT THE RIGHT TIME AND
PLAYED A CRUCIAL ROLE AND THAT
WAS DURING.
THE IMPENDING COLLAPSE OF THE
CLINTON COLLEGES -- WHICH HAD
FOR MANY MANY YEARS -- AS ANY
LEGAL AID ADVOCATE WILL TELL YOU --
HAD BEEN MAKING FALSE PROMISES
GETTING STUDENTS IN THE DOOR.
PUTTING THEM IN DEBT AND THE NOT
TRAINING THEM AND THE WAY THEY
WERE PROMISED IN SO MANY
STUDENTS WE'RE STUCK WITH THAT
THE COULD NOT REPAY WE'RE NOT
GETTING A PROPER EDUCATION AND
EVENTUALLY IT CAUGHT UP WITH
CURRENT IN THEIR FINANCIAL
MISMANAGEMENT -- ACTUALLY CAME
OUT FINALLY CAME UNDER THE RADAR
OF THE DEPARTMENT OF EDUCATION
AND AS A LOOK AT THE CORINTHIAN
COLLEGES WERE ABOUT TO COLLAPSE.
THE CPB WAS WELL POISED AT THAT
TIME TO POINT OUT BECAUSE THEY
HAD ALREADY DONE SOME
INVESTIGATIONS INTO THE LENDING
PRACTICES OF CURRENT THE AND HOW --
CORINTHIAN COLLEGES HAD NOT JUST
BEEN MAKING FALSE PROMISES TO
STUDENTS TO GET THEM TO TAKE OUT
FEDERAL LOANS IT SEPARATELY BINS
STEERING THEM INTO PRIVATE LOANS
WHICH OF COURSE DO NOT HAVE ANY
REAL CONSUMER PROTECTIONS THAT
TODAY.
AND OUT OF THE CLASS WAS
HAPPENING TO CONSIDER THE
CONSUMER FINANCIAL PROTECTION
BUREAU'S ABILITY TO WORK WITH
THE DEPARTMENT OF EDUCATION TO
NEGOTIATE A WINDING DOWN OF THE
COLLEGES.
THAT RESULTED IN THE BUREAU
BEING ABLE TO SECURE MILLIONS
HUNDREDS OF MILLIONS OF DOLLARS
OF PRIVATE STUDENT DEBT RELIEF
FOR BORROWERS THAT THE
DEPARTMENT OF EDUCATION ON ITS
OWN SIMPLY COULD NOT HAVE DONE --
SO THOSE ARE JUST A FEW EXAMPLES
OF HOW HAVING AGAIN THE CONSUMER
PROTECTION ORIENTED AGENCY WITH
COMPREHENSIVE JURISDICTION IN
THE ABILITY TO COORDINATE WITH
OTHER AGENCIES.
MADE OUR FINANCIAL REGULATORY
SYSTEM THE BETTER FOR ALL OF
THAT -- SO THESE ARE SOME
LESSONS I THINK WE NEED TO TAKE
AWAY SO AGAIN WE NEED TO LOOK --
AS WE MOVE FORWARD TO THIS
PROCESS OF FIGURING OUT OF STATE
LEVEL CONSUMER PROTECTION
FRAMEWORK -- I THINK THAT
COMPREHENSIVE AND COORDINATED
TOOLS FOR ENSURING A STRONG AND
DILIGENT FORCE MEN ARE GOING TO
SERVICE ALL BETTER AND THEN TO
PIVOT -- TO WERE ALL OUR NEXT
PANELIST WILL GO I WILL MENTION
THAT.
THE PREVIOUS PANELIST RAISE THE
FACT THAT THERE ARE SPECIAL
POPULATIONS OF THAT THE BUREAU
HAS STATUTORY AUTHORITY TO LOOK
AT STUDENTS SERVICE MEMBERS
SENIORS AND TRADITIONALLY
UNDERSERVED POPULATIONS SO IS
ALSO AN EQUITY LENDS BUILT INTO.
THE WAY THE BUREAU IS STRUCTURED
AND I THINK THAT THAT'S ANOTHER
AREA WHERE HERE IN CALIFORNIA WE
SHOULD WE SHOULD APPLY THAT
PRINCIPLE -- BECAUSE A LOT OF
THE OF THE PRIORITY LEGISLATIVE
ISSUES WE'VE BEEN TALKING ABOUT
HERE STOPPING PREDATORY LENDING
THAT AFFECTS UNDERSERVED
COMMUNITIES -- YOU KNOW TRYING
TO REIN IN THE ABUSES OF THE
STEW LOAN SERVICING INDUSTRY AT
THE END OF THE DAY THIS IS ABOUT
EQUITY AND IT'S ABOUT ECONOMIC
JUSTICE FOR ALL CALIFORNIANS AND
SO THAT'S ANOTHER VALUE.
BUT I THINK WE WANT TO TO CARRY
WITH US AS WE TRY TO FIGURE OUT
THE NEXT BEST STEPS FOR
IMPLEMENTING A STATE LEVEL
CONSUMER FINANCIAL PROTECTION
FRAMEWORK IN CALIFORNIA THANK
YOU.
THANK YOU MS MARTIN THE MISSILE
ASK US GREAT THANK YOU WELL
THANK YOU SO MUCH CHARLIE MOURN
FOR HAVING ME SPEAK TODAY IN TO
MEMBERS OF THE COMMITTEE -- A
MATURE VELASQUEZ IN A SERVER
SENIOR PROGRAM MANAGER AT THE
GREEN LINING INSTITUTE GREEN
LINING IS A POLICY THINK TANK
ADVANCING ECONOMIC OPPORTUNITY
FOR COMMUNITIES OF COLOR -- WE
SPECIFICALLY WORK WITH THOSE
COMMUNITIES -- TO ADDRESS THE
ENTRANCE LEGACY OF REDLINING.
WHICH IS THE RACIAL WEALTH GAP
OR THE DIFFERENCE IN WITH
HOLDINGS ACROSS RACIAL GROUPS
BOTH RED LINING AND THE RACIAL
WEALTH GAP ARE ARE VERY WELL
DOCUMENTED IN THE OUR REALITY.
OTHER COMP COMMUNITIES GRAPPLE
WITH THEM.
IN THE PRESENT AGREE LANDING IS
A LONG TIME SUPPORTER OF THE
CFPB IN OF ITS PRIMARY IN
STATUTORILY VESTED PURPOSE AS A
CONSUMER PROTECTION AGENCY -- AS
MENTIONED EARLIER THE CFPB WAS
ORIGINALLY CREATED TO PROTECT
CONSUMERS FROM FRAUDULENT AND
ABUSIVE FINANCIAL ACTORS AS AS A
RESPONSE TO THE TWO THOUSAND
EIGHT FINANCIAL CRISIS.
YET TODAY UNDER CURRENT
LEADERSHIP AND AGENCY FOUNDED AS
THE PEOPLE THE BUREAU HAS IN
MANY WAYS GROW CLOSER TO THE
INDUSTRY -- ONE OF THE MOST
CONCERNING CHANGES IN THE BUREAU
IS A ROLL BACK IN FAIR LENDING
WHICH WE BELIEVE IS A CORRUPTION
OF THE CFE BEES PURPOSE.
THE CFPB TRADITIONAL VIGILANCE
WAS CRITICAL FOR CONSUMERS OF
COLOR BECAUSE THE AGENCY WAS NOT
RACE BLINDNESS OVERSIGHT.
REMAIN COGNIZANT OF THE
UNFORTUNATE TWENTY FIRST REALITY
THAT SKIN COLOR STILL DETERMINES
ACCESS TO SAFE AND SOUND
FINANCIAL PRODUCTS.
AMPLE RESEARCH SHOWS THAT PEOPLE
OF COLOR CONTINUE FACING RACISM
IN MORTGAGE AUTO SMALL BUSINESS
AND CREDIT CARD LENDING THIS CAN
MEAN THAT PEOPLE OF COLOR
RECEIVE SMALLER AMOUNTS.
THE REQUESTED WHEN LOOKING FOR
LOANS ARE PRODUCTS UNFAVORABLE
TERMS AND HIGHER RATES OF DENIAL
COMPARED TO THE WORRY AT
COUNTERPARTS.
DESPITE THESE REALITIES THE CFE
BEES NEW LEADERSHIP HAS TAKEN
THE FOLLOWING ACTIONS WHICH
THREATEN THE PEOPLE OF COLORS
RIGHT TO ACCESS BRING
TRANSPARENT FINANCIAL PRODUCTS.
FOR THE PURPOSES OF TIME ONLY
FOCUS ON FOR A QUESTION THE
THEORY OF DISPARATE IMPACT AND
LIMITED THE USE OF DISPARATE
IMPACT ASSESSMENTS.
THIS IS A STATISTICAL ANALYSIS
THAT LOOK FOR DIFFERENCES IN HOW
LENDING.
PRACTICES AFFECT VARIOUS
COMMUNITIES WERE IN -- CASES ARE
BROUGHT TO UNDER THE EQUAL
CREDIT OPPORTUNITY ACT IT'S A
POWERFUL ENFORCEMENT TOOL THAT
HAS BEEN USING THE VAST MAJORITY
OF THE CFE BEES FOR LENDING
CASES -- JUST EVEN GENERALLY
SPEAKING IN TERMS OF ENFORCEMENT
ACTIONS THERE'S BEEN A SEVERE
DROP IN THEM -- IN A ARTICLE
DATED -- IN TWENTY EIGHTEEN
OCTOBER -- TWENTY EIGHTEEN Q.
THREE OF TWENTY EIGHTEEN THERE
WERE ONLY SIX ENFORCEMENT
ACTIONS COMPARED TO Q. Q. THREE
OF TWENTY SEVENTEEN THERE'D BEEN.
THIRTY ONE OUR NUMBER TWO IT'S
RIPPED ITS OFFICE OF FAIR
LENDING AN EQUAL OPPORTUNITY OF
ENFORCEMENT POWERS AND
RESTRUCTURED AS A UNIT OF
INTERNAL ADVOCACY.
UNDER DODD FRANK THE OFFICE WAS
TASKED WITH OVERSIGHT
ENFORCEMENT OF FEDERAL LAWS
INTENDED TO ENSURE THE FAIR
EQUITABLE AND NON DISCRIMINATORY
ACCESS TO CREDIT FOR BOTH
INDIVIDUALS AND COMMUNITIES.
OUR NUMBER THREE SEEKING TO
CREATE FINTECH SANDBOXES -- AND
I SHOULD SAY EXPAND FINTECH
SANDBOXES A TESTING GROUND FOR
ONLINE FINANCIAL PRODUCTS --
THAT PROVIDE BLANKET IMMUNITY
FROM STATE AND FEDERAL CONSUMER
PROTECTION LAWS.
GIVEN THE ROLL BACK A FAILING
AND FAIR LENDING ENFORCEMENT
THIS BLANKET IMMUNITY IS ALL THE
MORE CONCERNING BECAUSE FINTECH --
SERVICES THE UNDER BEING A
MAJORITY OF WHOM ARE PEOPLE OF
COLOR.
AND FOURTH -- SUSPENDING
IMPLEMENTATION OF SECTION TEN
SEVENTY ONE OF DODD FRANK
SECTION TEN SEVENTY ONE REQUIRED
THE CFPB TO IMPLEMENT SMALL
BUSINESS DATA COLLECTION AND TO
MAKE THE DATA PUBLIC.
NOTABLY IT REQUIRED THE
COLLECTION OF RACE AND GENDER OF
SMALL BUSINESS OWNERS.
THIS IS IMPORTANT BECAUSE
CURRENTLY THERE IS NO
COMPREHENSIVE SMALL BUSINESS
DATA COLLECTION -- AND THE
IMPLEMENTATION OF THIS RULE WAS
CRITICAL BECAUSE IT IS WELL
DOCUMENTED AS WELL THAT'S SMALL
WOMEN OWNED AND MINORITY OWNED
BUSINESSES STRUGGLE TO ACCESS
STATEMENT SYSTEM CREDIT.
IN CONCLUSION THESE ACTIONS WILL
ONLY EXACERBATE THE RACIAL
WEALTH GAP AND BAR PEOPLE OF
COLOR FROM FULLY AND FAIRLY
PARTICIPATING IN OUR ECONOMY.
IN TERMS OF HOW CALIFORNIA CAN
STEP UP -- YOU KNOW CLEARLY
THESE ACTIONS SHOW THAT CONSUMER
PROTECTION ARE IN THE HANDS OF
STATES NOW -- SO IT'S HEARTENING
TO SEE TEARS LIMON.
LEADERSHIP IN EXPLORING HOW THE
STE A STATE CAN STEP UP AND
PROTECT CONSUMERS AND TO SEE
GOVERNOR NEW SOME PRIORITIZE
HIGH COST LENDING.
I THINK THAT WHAT THIS
LEADERSHIP CALIFORNIA'S WELL
POISED TO BE A NATIONAL EXAMPLE.
IN TERMS OF SOLUTIONS ARE
FOCUSING ON THE DB O. RIGHT --
YOU KNOW THE DB OWE THE CURRENT
ITERATION OF THE DB O. WAS
CREATED TWENTY THIRTEEN WITH THE
MERGER OF THE DEPARTMENT OF
FINANCIAL INSTITUTIONS AND
CORPORATIONS -- YOU KNOW WHAT
COULD THE NEXT ITERATION OF THE
BILL LOOK LIKE DB O. TWO POINT
NO IF WE CAN CALL IT THAT -- AND
I THINK THAT INCLUDES THE BETTER
RESOURCE SEEING IT AS OUR SINGLE
IN STATE FINANCIAL REGULATOR
WITH THE CHURCH ALREADY LOOKING
INTO.
SPECIFICALLY IN TERMS OF
ENFORCEMENT ATTORNEYS TO HANDLE
FOR LENDING INVESTIGATIONS --
NEXT.
POTENTIALLY LOOKING INTO AN
EXPANDING SMALL BUSINESS DATA
COLLECTION -- ALTHOUGH WE WILL
NOT BE ABLE TO COLLECT STATE
LEVEL RACE DATA DUE TO THE EQUAL
CREDIT OPPORTUNITY ACT WE CAN
EXPLORE COLLECTING OTHER
INFORMATION TO DETERMINE LENDING
AND MINORITY.
OR MAJORITY MINORITY CENSUS
TRACKS AND TO DETERMINE THE
QUALITY OF LENDING.
NEXT SILICON VALLEY IS IN OUR
BACKYARD AND WE NEED TO BE MORE
PROACTIVE AND LESS REACTIVE TO
THE THINK CHANGING FACE OF
FINANCE -- WE SHOULD PROVIDE THE
D. B. O. ADEQUATE TECHNOLOGY TO
AUDIT FINTECH ALGORITHMS AND
ENSURE THAT THEY ARE NOT RAISING
FOR LENDING CONCERNS -- FOR
INSTANCE THERE'S A RECENT UC
BERKELEY STUDY SHOWING THAT
ONLINE AND IN PERSON MORTGAGE
LENDERS STILL OVER PRICE LATINO
AND BLACK -- MORTGAGE BORROWERS --
AND THIS WOULD YOU KNOW POP CREE
MORE TRANSPARENCY IN THAT
LANDING AREA -- ASIDE FROM THE
D. BO WE CAN TAKE A PAGE FROM
MARYLAND BY CREATING A FINANCIAL
CONSUMER PROTECTION COMMISSION --
MARYLAND ESTABLISHED THIS TO
DETERMINE WHAT THE STATE'S
PRIORITIES AND NEXT STEPS WOULD
BE IN RESPONSE TO THE CFPB ROLL
BACKS A MEMBERSHIP ON THIS
COMMISSION AGAIN TO STUDENTS
POINT ON COORDINATION.
COULD INCLUDE LEGISLATORS
ATTORNEY GENERAL THE DB OWE THE
GOVERNOR THE GOVERNOR'S OFFICE
AND ADVOCATES AMONG OTHERS --
KNACKS PASSING LEGISLATION
REQUIRING A RACIAL IMPACT
ANALYSIS WHEN CONSIDERING
BANKING RELATED MATTERS FOR
INSTANCE UNDER STATUE ILLINOIS
IS REQUIRED TO CONDUCT THIS
ANALYSIS IF IT CONSIDERS RACING --
CHECK CASHING FEES IN THE FUTURE --
THEY'RE ALSO INTERESTED IN
EXPANDING THIS ANALYSIS TO OTHER
POLICY AREAS.
AND LASTLY -- YOUR MIGHT HAVE
HEARD OF THE COMMUNITY
REINVESTMENT ACT ALSO KNOWN AS
THE CRA THE C. R. A.'S UNDER
ATTACK BY THE TRUMP
ADMINISTRATION.
AND THE C. R. A.'S A CIVIL
RIGHTS LAW REQUIRING BANKS TO
SERVE LOW AND MODERATE INCOME
COMMUNITIES AND THOSE
TRADITIONALLY EXCLUDED FROM THE
FINANCIAL SYSTEM.
THERE'S ALSO REQUIREMENT THAT
THE BANKS REINVEST IN THOSE
COMMUNITIES SO WITH THEIR TAKING
DEPOSITS FROM OUR COMMUNITIES
THEY SHOULD RE INVESTOR
COMMUNITIES.
THESE PRIVATE DOLLARS HELP
FINANCE AFFORDABLE HOUSING SMALL
BUSINESS LOANS MORTGAGES A
BROADBAND -- IF CALIFORNIA WORK
TO PASS SUCH A RESOLUTION IT
WOULD BE THE FIRST DAY IN THE
NATION -- TO BE VOCAL ABOUT
SUPPORTING EQUITABLE ACCESS TO
BANKING FOR ALL CALIFORNIANS
REGARDLESS OF RACE IN INCOME AND
TO UNDERSCORE HOW CRA MUST BE
STRENGTHENED NOT WEAKENED.
THE CONCLUSION THERE A LOT OF
OPPORTUNITIES TO TO GET BY
CALIFORNIANS IN THANK YOU
CHARLIE MORE FOR SEIZING THE
MOMENT.
CATERPILLAR MISS TAYLOR.
THANK YOU ASSEMBLY WOMAN LIMON
AND COMMITTEE IT'S A GREAT HONOR
TO HAVE THIS OPPORTUNITY TO
TESTIFY -- IS ALSO MY HONOR TO
REPRESENT BENEFICIAL STATE BANK
MY HUSBAND TOM STIERS AND I AND
FIFTEEN FINANCE PROFESSIONALS.
STARTED A BANK ON A HUNCH THAT
SOMETHING WAS NOT RIGHT IN THE
BANKING SYSTEM.
IN FACT IT WAS ON THE EVE OF THE
GREAT RECESSION WHICH WAS
PRECIPITATED BY INCREASINGLY
RISKY BEHAVIOR BY THE BIGGEST
BANKS IN THE SYSTEM.
THAT WE PLACED OUR FDIC STICKER
IN THE OAKLAND BRANCH
HEADQUARTERS.
ON JUNE TWENTY SEVENTH.
TWO THOUSAND SEVEN AND THEN WE
WATCH THE CREDIT MARKETS BURNED
DOWN AND THE BANK CIRCLE THEIR
WAGONS.
AND I NOTE THAT THE VERY SAME
BANKS OR EVEN BIGGER NOW AND
HAVE NOT SEE SIR OVERLY AT RISK
HE WAITS.
IF YOU LOOK AT THE BRIGHT THEIR
BALANCE SHEETS THEY ARE NOT
LENDING MUCH MONEY INTO THE MAIN
ECONOMY INSTEAD THEY ARE
INVESTING IN SPECULATIVE HIGH
RISK ACTIVITIES.
WHOLLY INAPPROPRIATE TO THE
STEWARDSHIP OF DEPOSITORS MONEY.
SO BENEFICIAL STATE BANKS TRIAL
WAS BY FIRE AND WE HAVE COME
THROUGH THE WORST RECESSION
SINCE THE GREAT DEPRESSION.
PROVING THAT A TRIPLE BOTTOM
LINE MODEL OF BANKING CANCERS
SUCCEED.
IN ELEVEN YEARS WE HAVE GROWN TO
ONE BILLION IN ASSETS SEVENTEEN
BRANCH OFFICES ACROSS THREE WEST
COAST STATES WITH TWO HUNDRED
AND FIFTY EMPLOYEES.
WE PRODUCE SOCIAL JUSTICE AND
ENVIRONMENTAL WELL BEING IN
EQUAL MEASURE TO OUR FINANCIAL
RETURNS. 1100% OF OUR ECONOMIC
RIGHTS ARE HELD BY A PUBLIC
CHARITY FOUNDATION THAT IS
PERMANENTLY GOVERN IN THE PUBLIC
INTEREST.
WE DEDICATE 75% OF OUR LENDING
PRACTICES TO A NEW ECONOMY THAT
IS FULLY INCLUSIVE RACIALLY
ENGENDERED JUST AN
ENVIRONMENTALLY RESTORATIVE AND
THE OTHER 25% CANNOT BE WORKING
AGAINST OUR TRIPLE BOTTOM LINE --
OVER WE ARE RADICALLY
TRANSPARENT ABOUT ALL OF OUR
CORPORATE PRACTICES INCLUDING
OUR LIVING WAGE POLICY WHERE WE
PAY ONE HUNDRED AND 50% OF
LIVING WAGE.
FULLY BENEFITTED AT A MINIMUM TO
ALL OUR EMPLOYEES IN AN INDUSTRY
WHERE ONE THIRD OF BANK TELLERS
ARE ON SOME FORM OF PUBLIC
ASSISTANCE.
IN SPITE OF BEING EMPLOYED BY
SOME OF THE MOST PROFITABLE
CORPORATIONS IN THE WORLD.
SO IT'S A FALSE DICHOTOMY THAT
WE CAN'T RUN A SUSTAINABLE BANK
AND ACT HONORABLY.
WE HAD BENEFICIAL STATE BANK ARE
DOING JUST THAT AND SO ARE
COUNTLESS OTHER COMMUNITY
DEVELOPMENT FINANCIAL
INSTITUTIONS BANKS CREDIT UNIONS
AND LOAN FUNDS.
WHO COMMIT TO LANDING 60% OF
THEIR LOAN DOLLARS INTO LOW AND
MODERATE INCOME CENSUS TRACKS?
HOWEVER IT THESE CONCERTED
EFFORTS ARE NOT NEARLY ENOUGH
THE BIGGEST BANKS MUST ALSO BE A
PART OF THE SOLUTION AND NOT AT
THE EXPENSE OF TAXPAYERS OR
CONSUMERS.
IF ANYTHING IT'S THE UNDER
HANDED PRACTICES OF THE BIGGEST
BANKS THAT MAKE IT HARD FOR A
BANK LIKE OURS TO THRIVE.
WHEN THEIR PREDATORY WAYS SET
THE PACE FOR BANK PRODUCTS AND
SERVICES?
THERE IS A RACE TO THE BOTTOM
AND THOSE OF US ON OFFERING
HONORABLE PRODUCTS STRUGGLE TO
COMPETE.
ALSO PREDATORY BANKING PRACTICES
DEPLETE HOUSEHOLDS IN
COMMUNITIES OF THE NECESSARY
RESOURCES AND RESILIENCY TO
CREATE A LOCAL LIVING ECONOMY.
WHERE AS GOOD BANKING PRACTICES
CREATE HEALTHY BORROWERS AND
COMMUNITIES AND MAKE ALL BANK
STRIVE TO PERFORM BETTER?
TAKE A LOOK AT BANK OF THE WEST
OUT OF PURE ENLIGHTENED SELF
INTEREST THEY JUST RECENTLY
ANNOUNCED THAT THEY WILL PAY ALL
OF THEIR EMPLOYEES AT LEAST
FIFTEEN DOLLARS AN HOUR.
AND DIVEST FROM FOSSIL FUELS
OVER A TIME LINE.
BY DINT OF RECEIVING SIGNIFICANT
PUBLIC PRAGUE IS SECOND ONLY BE
GRANTED BY THE AMERICAN TAXPAYER
IN THE END.
LIKE FDIC INSURANCE AND THE
POWER OF BORROWING FROM THE FED
ALL BANKING IS BECAUSE I PUBLIC.
WE POOL OUR IDLE CASH OR OUR
DEPOSITS TO THE TUNE OF THIRTEEN
TRILLION DOLLARS IN THE AMERICAN
ECONOMY LOAN. TO FINANCE A
FUTURE IN WHICH WE ACTUALLY WISH
TO LIVE NOT ONE MARRED BY
VOLATILE ECONOMIC CYCLES
MORTGAGE FRAUD AND PREDATORY
CONSUMER PRODUCTS.
WE THINK OF BANKING AS THE
ORIGINAL AND MOST POWERFUL FORM
OF CROWD FUNDING.
IT'S NOT THAT IS SPECIFIC
DEPOSIT FINANCES A SPECIFIC LOAN
BUT ALL DEPOSITS FINANCE A
LENDING PRACTICE.
AND IN THAT LENDING PRACTICE
BANKS SHOULD BE ALLEGIANCE TO
MULTIPLE STAKEHOLDERS CUSTOMERS
COLLEAGUES COMMUNITIES AND THE
PLANET UPON WHICH WE ALL DEPEND
AS WELL AS THE PUBLIC INTEREST
AT LARGE.
IN RECOGNITION OF THIS PUBLIC
DUTY BENEFICIAL STATE BANK AS
OPEN SOURCE A SET OF BANKING
STANDARDS TO WHICH WE HOLD
OURSELVES AND INVITE OTHER BANKS
REGULATORS AND MASS CONSUMER
MOVEMENTS. TO IT HERE.
WE SHOULD ALL SCRUTINIZE THE
OWNERSHIP OF BANKS TO ENSURE IT
RESPECTS THOSE MULTIPLE
STAKEHOLDERS.
LENDING AND INVESTMENT PRACTICES
MUST BE FOCUSED ON THE NEW
ECONOMY.
BANK PRODUCTS SHOULD MAKE THOSE
WHO TAKE THEM UP HEALTHY OR THE
DAY AFTER THAN THEY WERE THE DAY
BEFORE.
AND OUR INSTITUTIONS CORPORATE
PRACTICES SHOULD EMBODY CONDUCT
WE CAN ALL BE PROUD OF OUR
ADVOCACY MUST BE IN THE PUBLIC
INTEREST AND NOT IN OUR SELF
INTEREST ALONE.
AND THERE MUST ALSO BE
TRANSPARENCY ABOUT EVERYTHING WE
DO.
THOSE ARE MINIMUM OBLIGATIONS ON
TOP OF OUR RESPONSIBILITY TO
CONDUCT BUSINESS IN A SAFE AND
SOUND MANNER.
DOING NO HARM IS OUR HIGHEST
PRIORITY.
A COMMITMENT WOEFULLY LACKING
FROM THE MAIN BANKING ACTORS.
WHEN BANKS EQUIPPED WITH LOW
COST FUNDING OUR DEPOSITS
LEVERAGE WITH AT LEAST TEN TO
ONE TIMES AND ACCESS TO FED
FUNDS?
THEN INFLICT HARM NO AMOUNT OF
DOING GOOD PLASTERED ON
BILLBOARDS OR FULL PAGE ADS IN
THE NEW YORK TIMES CAN
COMPENSATE FOR THAT HARM.
BANKING DRIVE SOCIETAL OUTCOMES
NOT JUST ECONOMIC ONES WHEN THE
BIGGEST BANKS CONTRIBUTE TO
SUPPORT FOSSIL FUELS PRIVATE
PRISONS AND PAYDAY LENDING.
THEIR BREACHING THEIR PUBLIC
DUTY.
AND DISRESPECTING THE
DISPOSITIVE DEPOSITORS FROM HOME
THEIR LARGEST CREDIT COMES.
THESE INSIGHTS AS A REAL ACTOR
IN THE BANKING SYSTEM LEAD ACID
BENEFICIAL STATE BANK TO BE O A
STRONG BELIEF THAT ANY FURTHER
DEREGULATION OF THE BANKS WOULD
BE A MISTAKE.
IN FACTFURTHER REQUIREMENT
SHOULD BE PLACED ON THEM LIKE
COUNTER CYCLICAL CAPITAL
REQUIREMENTS.
WE ALSO BELIEVE THERE IS A
CONTINUING NEED FOR CONSUMER
PROTECTION AND ENFORCEMENT.
THOSE GAINS CONSISTS SECURED BY
THE FEDERAL CONSUMER FINANCIAL
PROTECTION BUREAU.
DURING SENATOR WARNS AND
DIRECTOR CORD REYES OVERSIGHT
WILL SOON BE LOST IF WE DO NOT
ACT NOW AT THE STATE LEVEL.
FROM 202-015-22018 AND FORCE
WHEN ACTIONS FELL 80% AND AWARDS
ASSOCIATED FELL 94%.
THE FEDERAL CFPB HAS BEEN
EVISCERATED OF ITS MISSION ITS
IMPACT AND ITS RESOURCES.
INSTEAD IT PROMOTES A CYNICAL
PLAN TO PUT THE LARGEST BANKS
FURTHER AHEAD OF THE PACK.
AND IN BETTER POSITION TO
ABUSING USE CUSTOMERS WHOM THEY
SHOULD BE EMPOWERING.
MOREOVER.
EVEN THE THREE HUNDRED AND
EIGHTY BILLION DOLLARS OF FINES
PAID BY THE TOP FIVE BANKS IN
THE FIRST FIVE YEARS OF THE
RECESSION.
MOSTLY FOR CREDIT CARD CONSUMER
LOAN MORTGAGE LENDING VIOLATIONS
DON'T STOP THE ABUSE.
AS FOR THE BIGGEST BANKS IN THE
SYSTEM AND THE TOP FIVE OF BANK
OF AMERICA JP MORGAN CHASE
CITIGROUP WELLS FARGO AND
GOLDMAN SACHS.
NOW EXCEED A COMBINED TOTAL OF
MORE THAN NINE TRILLION IN
ASSETS.
THOSE FINES REPRESENT NEARLY A
COST OF DOING BUSINESS SPARE
CHANGE THEY COULD LOSE IN THEIR
CAR OF AN AFTERNOON.
ON THE CONTRARY IT IS LIKELY
THAT EFFECTIVE REGULATION OF THE
BANKS CONSUMER PRACTICES WILL
NEED TO INCLUDE.
POTENTIAL SUSPENSION OF BUSINESS
LIFE LINE LICENSE OR EVEN
REVOCATION OF FDI INSURANCE IN
THE EXTREME.
AS A RELATIVELY SMALL BANK IN
THE SYSTEM WE IT BENEFICIAL
STATE BANK NONETHELESS SEE WHAT
GOES ON AROUND US AND IT'S STILL
INCLUDES A PREPONDERANCE OF
EXTRACTIVE PAYDAY LENDING.
AUTO LOANS BANK PRODUCTS
PRODUCTS OVERDRAFT PRACTICES
MORTGAGE LENDING AND SMALL
BUSINESS LENDING.
AND FOR ALL OF THE SPEECHES
CRIES OF OVER REGULATION AN
AGENCY OVERLAP WE KNOW THAT
EVERYONE IN AN INDUSTRY KNEW
THAT WELLS FARGO WAS CROSS
SELLING SIX TO EIGHT PRODUCTS.
PER CUSTOMER EVEN THOUGH WE
COULDN'T FIGURE OUT WHAT FOR AND
IRONICALLY HELD UP AS BEST
PRACTICES FOR A DECADE.
IT WASN'T UNTIL THE CFPB JOINED
FORCES WITH THE LOS ANGELES CITY
ATTORNEY THAT JUSTICE WAS
WROUGHT.
IT IS NOW IT KNOWLEDGE WORLDWIDE
THE TWIN PEAKS APPROACH TO BANK
REGULATION IS NECESSARY.
SAFETY AND SOUNDNESS REGULATORS
HAVE AN INHERENT CONFLICT OF
INTEREST HOLDING BANKS TO FULL
ACCOUNTABILITY WITH REGARD TO
CREATE DID TREATMENT OF
CONSUMERS.
WE CANNOT REALISTICALLY EXPECT
THOSE SAFETY AND SOUNDNESS
REGULATORS WHO OCCUPIED THREE
FLOORS OF THE BANK'S
HEADQUARTERS ON A PERMANENT
BASIS. TO HANDLE POTENTIAL
CONSUMER OF USES WE NEED A
SEPARATE CONSUMER FINANCE
PROTECTION FORCE IN THE MIX.
AND WITH THE FEDERAL CFPB
EVISCERATED THAT LEAVES THE DUTY
TO THE GREAT STATE OF CALIFORNIA.
ESPECIALLY AS WE HEAD INTO
ANOTHER DOWNTURN WE NEED TO
CONSUMER FINANCE PROTECTION
REGULATORY PRESENCE IT WOULD BE
ESPECIALLY SALUTARY FOR
CALIFORNIA AS A LARGE STATE.
THE FIFTH BIGGEST ECONOMYIN THE
WORLD AND HOME OF WELLS FARGO
AND FOR THE VIRTUAL HOME OF BANK
OF AMERICA.
IN ITS GLORY DAYS THE FORMER
FORMER FEDERAL CFPB RETURN
TWELVE POINT FOUR BILLION
DOLLARS TO AMERICANS ABOUT ONE
EIGHTH OF WHICH WOULD HAVE GONE
TO CALIFORNIANS.
CREDIT CARD IMPROVEMENTS IN
MORTGAGE MARKET CHANGES CONTINUE
TO SAVE BILLIONS OF DOLLARS EACH
YEAR.
AND AVOIDING ANOTHER MELTDOWN IS
PRICELESS.
AND ALL OF THAT BENEFIT CAME AS
SIGNIFICANT MULTIPLE OF WHAT HAD
AT AS WHAT HAS BEEN SPENT BY THE
CFPB.
UNDER THIS FEDERAL
ADMINISTRATION THE FOUR
STATUTORY AREAS OVER WHICH THE
CFPB HAD AUTHORITY HAVE BEEN
SYSTEMATICALLY DISMANTLED OVER
STUDENT SENIOR MILITARY AND
PROTECTIONS FOR PEOPLE OF COLOR
THROUGH THE FAIR LENDING ACT.
AND WE RECALL THAT BEFORE THE
CFPB BANKS IN CALIFORNIA TRIED
TO REST TO THIRTY FROM STATE
REGULATORS IN FAVOR OF FEDERAL
CONSTRAINTS THEY COULD GET
AROUND.
THIS RESULTED IN LOTS OF FEDERAL
PREEMPTION THAT THE CFPB THEN
FINALLY HAD THE AUTHORITY TO
REGULATE AND ENFORCE.
LET US NOT ALLOW THE GREAT STATE
OF CALIFORNIA TO TURN ITS BACK
ON ITS RESIDENTS WITH REGARD TO
CONSUMER PROTECTION.
AGAINST THE VERY BIGGEST BANKS
AT UNDER PAY THEIR EMPLOYEES
COMMIT FRAUD ON CONSUMERS LINDEN
TO CLIMATE DISASTER AND
FLAGRANTLY VIOLATE THEIR PUBLIC
DUTIES.
THE STAKES FOR OUR PEOPLE OUR
COMMUNITIES OUR ECONOMY AND
FINANCIAL TO THE STABILITY ARE
TOO GREAT TO IGNORE.
WE CAN AND MUST DO BETTER WE ARE
A BANK STAUNCHLY IN FAVOR OF A
STATE CFPB THANK YOU VERY MUCH.
THANK YOU THANK YOU TO ALL THREE
OF YOU.
A SUMMER STONE.
IN THEM I AM VERY HAPPY THAT
THERE'S A FINANCIAL INSTITUTION
WHO IS HERE ONE OF THE THINGS
THAT I HEAR.
IN THE DISTRICT AS I TALK TO A
LOT OF ORGANIZATIONS IS FROM
LOCAL BANKS THE SMALL CREDIT
UNIONS AND SMALL LOCAL BANKS.
AND WHAT THEY POINT OUT WHICH IS
TRUE IS THAT THEY'RE WILLING TO
LAND.
IN THE COMMUNITY WHERE OTHERS
ARE NOT BECAUSE THEY KNOW THE
COMMUNITY THEY UNDERSTAND THE
RISKS THEY UNDERSTAND.
HOW THOSE ECONOMIES AND WHERE
THOSE THE ECONOMIES ARE WORKING
AND THEY'RE CONSTANTLY ASKING?
FOR A BIT OF A BREAK IN THE
REGULATORY SCHEME BECAUSE IT'S
DIFFICULT FOR THEM.
A LARGER BANK CERTAINLY HAS THE
CAPACITY BE ABLE TO MANAGE ALL
THE REGULATIONS AND AND SO WITH
SMALLER COMPANY SHOULD BUT BUT I
THINK YOU RAISE.
AN ISSUE THAT.
THAT IS APPROPRIATE IT'S NOT
REALLY ABOUT DEREGULATING AND
THAT'S NOT WHAT I'M SUGGESTING
BUT IT'S RETHINKING HOW WE
REGULATE AND IF WE CAN CREATE A
STRUCTURE THAT HAS AND THIS IS
WHAT TO ME IS SO COMPELLING
ABOUT THIS. TWENTY SIX NOTION.
THAT WE HAVE A BANK REGULATOR
BUT WE ALSO HAVE THE RESPONSIBLE
ORGANIZATION THAT'S LOOKING OUT
ON THE CONSUMER SIDE WITH
APPROPRIATE LEVELS OF POWERS.
THEN I THINK THAT GIVES US THE
ABILITY TO RETHINK HOW WE MANAGE
THE SMALLER BANKS TO GIVE THEM
THE ABILITY TO WORK WITHIN THE
COMMUNITY AS THEY KNOW HOW TO DO.
BUT HAVE APPROPRIATE LEVELS OF
OVERSIGHT TO KEEP. TO AVOID THE
TEMPTATIONS THAT THAT LEAD THEM
ASTRAY AND WE CAN THEN SEPARATE
THEM AND ALLOW THEM TO COMPETE.
IN THESE MARKETS WITH SOME OF
THE LARGER BANKS THAT THAT HAVE
OFTEN FAILED WHEN IT COMES.
TO WHAT'S LEFT TO SELF
REGULATION AND AND LACK OF
OVERSIGHT FROM A FEDERAL LEVEL
AND OF COURSE WE CAN'T AFFECT
FEDERAL LAW BUT WE CAN AFFECT
AND CREATE STRUCTURES IN
CALIFORNIA.
SO THESE ARE SOME OF THE STEPS
THAT I THINK ARE POTENTIALLY
VERY INTERESTING.
THAT WOULD ALLOW US TO HAVE A
HEALTHIER CONVERSATION WITH SOME
OF THE SMALLER FINANCIAL
INSTITUTIONS WHO ARE REALLY
TRYING TO MAKE THINGS WORK.
IN THEIR OWN AREAS BUT WE NEED
TO MAKE SURE THAT WE HAVE
APPROPRIATE LEVELS OF OVERSIGHT
IN THOSE SITUATIONS -- FOR I
THINK VERY OBVIOUS REASONS SO
THIS.
THIS IS A VERY EXCITING I THINK
STEP OR GIVES A SOME POTENTIAL
TO RETHINK.
HOW WE PROVIDE OVERSIGHT WHAT
WE'RE DOING WITH RESPECT TO
PROTECTING?
OUR OWN CONSUMERS IN THE STATE
AND REALLY.
COULD SPUR A A WHOLE NEW
FINANCIAL SECTOR AND THE THE
FINTECH THE FINANCIAL TECHNOLOGY
THAT'S OUT THERE IS NOT
SOMETHING TO BE AFRAID.
BUT I THINK SOMETHING TO BRACE
BECAUSE WE ALL ARE MOVING TO
FINANCIAL TOOLS AND BANKING
RELATIONSHIPS THAT ARE ONLINE
THOSE AGAIN OUR OPPORTUNITIES
BUT OPPORTUNITIES.
WITHOUT OVERSIGHT FOR OTHER WAYS
FOR PEOPLE WHO ARE LESS
SOPHISTICATED TO GET INTO SOME
SIGNIFICANT TROUBLE THAT SHOULD
BE OUR CHARGE IS.
TO PROVIDE THAT FRAMEWORK THAT
LEVEL OF OVERSIGHT AND BE ABLE
TO TEST IT AND THEN.
INTEGRATIVE NEW BANKS WITH NEW
STANDARDS CAN COME FORWARD
INNOVATIVE TECHNOLOGIES CAN COME
FORWARD AND WE HAVE A VENUE TO
HAVE THE APPROPRIATE
CONVERSATIONS RATHER THAN BEING
STUCK IN AN OLD REGULATORY
SCHEME.
WITHOUT THAT HAVING THE
FLEXIBILITY TO ALLOW SOME OF
THESE ADVANCES TO COME FORWARD
REALLY THAT'S WHAT THE PROPOSAL
IS A AND COULD BE.
ON THE TABLE WITH HAVING
APPROPRIATE LEVELS OF OVERSIGHT.
BOTH ON THE AS A REGULATOR OF
THE INSTITUTIONS BUT THEN
SOMEBODY ELSE LOOKING OUT FOR
THE VOICE OF CONSUMERS SO THAT
THEY ARE NOT LEFT BEHIND AND
THEY ARE NOT.
HURT BY BY THIS BECAUSE WE WE
CAN HAVE A FINANCIAL INSTITUTION
WHO IS LOOKING OUT FOR THE BEST
INTEREST OF THAT.
THE ENVIRONMENT THE ECONOMY AND
INDIVIDUALS BUT NOT ALL ARE
GOING TO BE THAT PLACER THAT'S
NOT NECESSARILY GOING TO BE
THERE.
THEIR PRIMARY MOTIVATION
BUSINESSES ARE IN BUSINESS TO BE
ABLE TO MAKE MONEY AND TO GROW
THAT'S A LAUDABLE BUT WE NEED TO
PROTECT THOSE WHO ARE
[inaudible]
ULTIMATELY.
THE ONES THAT ARE FUNDING THAT
AND THAT IS THEIR CUSTOMERS AND
THOSE ARE OUR CONSUMERS.
THIS IS THIS IS A VERY
INTERESTING HEARING AND THE
PERSPECTIVES I THINK OUR OUR EYE
OPENING I KNOW WE'VE BEEN A
LITTLE A LITTLE BIT OF THIS
TRACK.
BUT I THINK THE LIVE THE
CONVERSATIONS AND ESPECIALLY
HAVING THE THIS LAST PANEL.
HOPEFULLY HELP US FOCUS ON
DIRECTIONS THAT WE COULD GO SO.
THANK YOU MADAM CHAIR FOR THE
OPPORTUNITY HERE AT FOR BRINGING
THIS HEARING FORWARD AND REALLY
YOUR LEADERSHIP IN THIS AREA AS
WELL HAS BEEN THAT SIGNIFICANT.
IT'S A DIFFERENT WAY OF LOOKING
AT BANKING AND FINANCE IN THIS
COMMITTEE IN THE ASSEMBLY AND
AND WE HAVE A LOT OF
POSSIBILITIES IN FRONT OF US.
THANK YOU SOMEONE MEMBER SOUND
THANK YOU TO OUR PANELISTS --
AND I AGREE I I THINK THAT THERE
REALLY THIS CONVERSATION --
STARTED RATE LAST YEAR IN
LOOKING AT SMALLER ELEMENTS AND
NOW KIND OF PUTTING A PUZZLE
TOGETHER OF LIKE WAIT A MINUTE
WHAT WHAT DOES IT WHAT DOES THIS
MEAN FOR OUR ENTIRE FINANCIAL
INSTITUTION PRODUCTS -- I SAID
IN MY OPENING STATEMENT ONE OF
THE THINGS I MOST STRIVEN BY IN
THIS PARTICULAR ROLE IS THE FACT
THAT FINANCIAL.
INSTITUTIONS AND PRODUCTS
INFLUENCE AND HAVE AN IMPACT ON
EVERY DAY CALIFORNIANS THERE IS
NO DOUBT WHETHER THEY KNOW IT OR
NOT AND USUALLY THEY ARE ON THE
NOT SIDE -- AND AND THINK THAT.
AS WE HAVE HEARD TODAY WE'VE
TACKLED JUST A FEW TOPICS --
THAT RELATED.
TO SCHOOL OF COURSE AS STUDENT
DEBT -- SMALLER LENDING PAYDAY
LENDING HIGH INTEREST LOANS --
AND ENFORCEMENT AND WHAT THAT
MEANS AND I APPRECIATE THE
COMMENTS THAT I'VE HEARD
THROUGHOUT THIS PARTICULAR --
CONVERSATION IN THIS PARTICULAR
HEARING THAT THIS ISN'T MEANT TO
BE AND I GOT YOU FOR ANYONE IT'S
MEANT TO ENSURE THAT
CALIFORNIANS ARE GETTING THE
BEST POSSIBLE PRODUCTS OUT THERE
THAT HELP AND NOT.
HINDER THEM.
AND I THINK THAT THAT'S WHAT
WE'RE TRYING TO TACKLE -- WE
CERTAINLY.
HAVE A LOT IN FRONT OF US I IN
TERMS OF THE DIRECTION WE GO BUT
I DO THINK THAT THERE ARE
LEGISLATIVE VEHICLES MOVING --
THROUGH THIS HOUSE -- THE AD
THAT CAN HELP US ENSURE OUR WAY
THERE -- SHOULD THERE BE
LEGISLATIVE INTEREST AND I THINK
THERE IS TO TRY TO GET US THERE
I THESE ARE NOT NEW PROBLEMS.
THESE ARE PROBLEMS THAT
CALIFORNIA HAS DEALT WITH -- IN
SOME CASES IN TERMS OF THE
DISCRIMINATORY PRACTICES -- YOU
KNOW FOR CENTURIES -- IN OTHERS
THEIR BRAND NEW PRODUCTS AND WE
BELIEVE THAT THERE IS A ROLE FOR
THESE INNOVATIVE PRODUCTS -- THE
FOR CONSUMERS THERE IS A ROLE
FOR THESE PRODUCTS IN EVERY DAY
CALIFORNIANS LIE I'VE BUT WE
WANT THEM TO BE HEALTHY PRODUCTS
THAT HELP THEM PROSPER SO I
APPRECIATE -- THE THREE OF YOU
AT KIND OF LENDING YOUR VOICES --
IT TO THIS PARTICULAR ISSUE --
AND LOOK FORWARD TO CONTINUE TO
WORK TOGETHER.
SO WITH THAT -- I AM GOING TO
OPEN IT UP TO PUBLIC COMMENT IF
WE HAVE PUBLIC COMMENT.
IF YOU LIKE IF YOU IF YOU HAVE
PUBLIC COMMENT PLEASE.
COME UP TO THE MICROPHONE -- WE
HAVE TWO MINUTES PLEASE STATE
YOUR NAME AND YOUR AFFILIATION
AND JUST REMEMBER YOU HAVE ABOUT
TWO MINUTES AB TAKE LESS THAN
THAT MY NAME HAD MERMAN I RUN
THE CALIFORNIA LOW INCOME
CONSUMER COALITION -- AND IN THE
EARLY TWO THOUSANDS I WAS --
PART OF THE ENFORCEMENT TEAM IN
THE CONSUMER LAW SECTION THE
CALIFORNIA ATTORNEY GENERAL'S
OFFICE -- WE HAD THE OPPORTUNITY
THEN TO SEE WHAT THE LANDSCAPE
LOOK LIKE WITHOUT.
A CONSUMER FINANCIAL PROTECTION
BUREAU WITHOUT A FEDERAL AGENCY
THAT WAS DEDICATED TO CONSUMER
PROTECTION PRIMARILY.
AND IT WAS IT WAS A BARREN
LANDSCAPE THERE'S A LOT OF
AGGRESSIVE PREEMPTION -- TO THE
POINT WHEN THE AGENCIES WOULD
JUST SEND LETTERS TO COURTS AND
SAY DON'T LISTEN TO WHATEVER THE
AG HAS TO SAY -- TO TO HAVE A
COMMITTEE. TO HAVE A LEGISLATURE
DEDICATED TO THE IDEA OF
ENHANCING.
OUR THE AUTHORITY -- THE
ROBUSTNESS OF STATE REGULATION.
OF OF BANKS WOULD BE A
REMARKABLE WE WE SAW WHAT
HAPPENED WE RECOGNIZE WHAT WAS
HAPPENING AS WE APPROACHED.
THE MORTGAGE CRISIS AND THERE
JUST WASN'T ENOUGH THAT WE COULD
DO TO STOP IT -- IF WE CAN
CHANGE THAT IT WILL BE QUITE A
CONTRIBUTION I WANT TO THANK YOU
MADAM CHAIR AND OTHER MEMBERS OF
THE COMMITTEE FOR YOUR WORK IN
THIS ISSUE.
AND IF ANYBODY ELSE HAS PUBLIC
COMMENT JUST PLEASE LINE UP.
THANK YOU AFTERNOON MY NAME IS
KAREN SEDU AND I'M A POLICY
COUNSEL AT THE CENTER FOR
RESPONSIBLE LENDING.
A NONPROFIT NONPARTISAN
ORGANIZATION DEDICATED TO
FIGHTING AGAINST PREDATORY
LENDING.
CALIFORNIA HAS BEEN AT THE
FOREFRONT OF PASSING IN
IMPLEMENTING HISTORIC LOWS IN
ALMOST EVERY AREA PUBLIC POLICY
THE STATE HAS BEEN A LEADER.
UNFORTUNATELY CALIFORNIA FALLS
BEHIND APPARENTLY EVEN BEHIND
OFF OF THE FOUNDING FATHERS AND
THE MOB.
WHEN IT COMES TO PROTECTING
BORROWS FROM PREDATORY LOANS?
FOR MORE THAN TWENTY YEARS
PAYDAY LENDERS IN CALIFORNIA
HAPPEN TRAPPING PEOPLE OF COLOR
IMMIGRANTS AND LOW INCOME
BORROWERS AND CYCLES OF DEBT.
THE OFTEN LEAD TO KERR
REPOSSESSION WAGE GARNISHMENT
DAMAGE CREDIT AND EVEN
BANKRUPTCY.
AS YOU'VE HEARD FROM OTHERS THIS
AFTERNOON THE CFPB RELEASED A
ROLE IN TWENTY SEVENTEEN TO
CRACKDOWN ON PAYDAY AND CAUGHT
TITLE LOANS.
THE CURRENT ADMINISTRATION IS
NOW IN THE PROCESS OF GETTING
THIS WILL AND IS STEPPING BACK
FROM ENFORCING THE MILITARY
LENDING ACT A LITTLE INTENDED TO
PROTECT ACTIVE DUTY SERVICE
MEMBERS FROM ABUSIVE LOAN
PRODUCTS.
WE CANNOT DEPEND ON THE FEDERAL
GOVERNMENT TO PROTECT US FROM
PREDATORY LENDERS WE NEED THE
CALIFORNIA STATE LEGISLATURE TO
STEP UP AND LEAD ON THIS ISSUE.
SIXTEEN STATES PLUS THE DISTRICT
OF COLUMBIA HAVE A 636% RATE
CAPS THE PAYDAY LOANS AND THIRTY
SEVEN STATES HAVE A RATE CAPS
UNDER 36%.
THE LARGER INSTALLMENT LOANS
HOWEVER CALIFORNIA HAS NEITHER.
THAT LEAVES STATES LIKE NEW YORK
COLORADO ARKANSAS AND WEST
VIRGINIA WITH STRONGER PLANETARY
LANDING PROTECTION LAWS IN
CALIFORNIA.
FEDERAL REGULATORS HAVE BORNE
FORSMAN ACTIONS AGAINST
PREDATORY LENDERS AND FIND THEM
THE STEERING BAR LISTEN TO LOANS
ABOVE TWENTY FIVE HUNDRED
DOLLARS.
WHERE THEY OPERATE WORRY FREE AS
THERE IS NO INTEREST RATE CAP ON
THIS ALL THE SPACE?
IN A RECENT CALIFORNIA SUPREME
COURT CASE THE COURT RULED THAT
TWENTY SIX HUNDRED DOLLAR
INSTALLMENT LOAN FROM CASH CALL.
WITH A 98% APR MAY BE
UNCONSCIONABLE.
NOW LOCAL IT'S A TIME ON A CASE
BY CASE BASIS WHAT LOANS SHOCK
THE CONSCIENCE.
THE CASH CALL CASE DEMONSTRATES
THAT THERE IS A NEED FOR THE
CALIFORNIA LEGISLATURE TO
FINALLY SET AN INTEREST RATE
CAPS.
WE APPLAUD THE LEADERSHIP OF THE
CHAT TO TAKE ON THIS ISSUE AND I
THINK YOU.
GRATEFULLY SYLLABUS ON BEHALF OF
THE NEED US US THE NATION'S
LARGEST LOOKING CIVIL RIGHTS
ORGANIZATIONS -- JUST WANT TO
SAY FIRST THANK YOU SO MUCH FOR
BOTH OF THE BILLS THAT YES ARE
CARRYING.
ON THE FRONT OF STUDENT LOANS
AND FOR SMALL DOLLAR LENDING FOR
THE LATINO COMMUNITY THIS IS YOU
KNOW WHEN LOOKING OF FAMILIES DO
WELL FINANCIALLY SORT OF
CALIFORNIA.
AND SO WE THINK THAT THESE ARE
BIG STRIDES AND IMPORT
CONVERSATIONS FOR US TO BE
HAVING SO JUST EXPRESSING OUR
GRATITUDE ON THE CONVERSATION.
THANK YOU.
AND SEE NO -- FURTHER AT
COMMENTS -- PUBLIC COMMENT A DO
AGAIN WANT TO THANK OUR
PRESENTERS ON MISTER CORDRAY
CHRIS AT PETERSON ASSET FRONTMEN
SUSAN MARTINDALE SHARON
VELASQUEZ CAT TAYLOR.
I KNOW THAT THE CONVERSATION
DOES NOT END HERE AS A MATTER OF
FACT I I BELIEVE THAT TONIGHT AT
THAT CAL STATE SACRAMENTO --
WITH THE CENTER FOR CALIFORNIA
STUDIES I DOES HAVE A PANEL FROM
FIVE THIRTY TO SEVEN PM AT THE
SACRAMENTO STATE DOWNTOWN OFFICE
I WITH THAT.
MISTER CORDRAY AND MISC TAYLOR --
TO CONTINUE THE CONVERSATION AND
I HOPE THE PUBLIC I WILL ENGAGE
IN THAT CONVERSATION AS WELL.
AND WITH THAT TO AND WE WILL GO
AHEAD AND CLOSE TODAY'S HEARING