 So let me start just by asking you we're now ten years after the financial crisis How are the regulators doing? How are you feeling about? the relative state of safety and fairness in the financial system a pretty mixed and One first. I'll just say to Professor Bart it Thanks for having all of us here and it's real pleasure to be making sure we're doing these reflections ten years after the fact I Have a few observations on this is one major strength that I see in the right direction is We have some very energetic state attorneys general and banking regulators who are Outspoken about not letting what happened what happened again? They do not want to be preempted They do not want to sit on the sidelines while things go awry. So that is a major strength Obviously We are both a little biased on this but a major strength At least we have a CFPB and that is something that is not ever going to go away And we will make sure of that But you know, there's some mixed mixed evidence too on how some of our other banking regulators are doing You know if we look at at the macro picture of low unemployment like we're seeing now Why are we seeing the type of delinquency in auto lending? Why are we seeing such ongoing trouble in student lending and when we peel back one layer of the onion? There's a lot of troubles and I'm not so sure All of our regulators are on the game on that and that that worries me and that worries me that we are not prepared As well as we could be for the next recession, which which I don't know when we'll come but it will come So maybe I'll push you a little bit on the regulatory question. So You noted the rise of actions by state AGs and state regulators There seems to be a diminution in enforcement at the CFPB at least in the early numbers we're seeing Is the FTC up to the task of filling in? You know, what's the role of the OCC and the FDIC in the Fed? What are they being aggressive enough? How do you see at the federal level the? interaction among the regulators Well, let me be unambiguous the FTC Cannot fill the gap. We are not resource to do so. We do not have Nearly the expertise in terms of the range of resources and and authorities as the CFPB Where where and I'm happy to talk about this more there are places where the FTC has a unique role to play But it should not be seen as the backstop for you know a weakening enforcement agenda of the CFPB So obviously what we see at the federal level is of great concern to me Because it is a signal to the marketplace That you know, you can go closer to the line and even cross the line And you can make a business decision to cross the line and If even if you are caught maybe there won't be much consequences at all and what I want to underscore on that is This is deeply unfair To law-abiding financial firms, so you see a lot of financial firms who are Actually wanting to follow the law and guess who is most harmed You know by by their peers and competitors breaking the law of them And that's that's just fundamentally unfair. This is not just about protecting consumers But for every law-abiding business They should be angry about what is about weakening enforcement writ large So Rohit, let me ask you to poke in in some depth on a couple of areas And maybe we'll start in the Auto loan market As most of you know the There was a tussle in the legislative process and the Consumer Financial Protection Bureau Was stripped of its authority back in the debate over Dodd-Frank to write rules for auto dealers With respect to their lending practices, but in a strange swiss to fate in that legislative process due to the Underhanded legislative skills of Eric Stein and others Magically that same authority appeared over at the FTC and I Wonder on whether Rohit you can comment on this. It's a sort of a funny situation You have the FTC, which generally doesn't have Usable rule-writing authority in many areas most areas But in this one area They've got really clear authority. It's the only thing where you have really easy ways to write rules I'm wondering if you comment on why hasn't the FTC run with this authority to regulate lending and the auto dealer market well, it's a Let me give context on one thing that the FTC Generally speaking cannot get civil penalties Unless there's a violation of an existing order or a rule So what what bugs me is that even when we find misconduct today? Because we have no rule on the book We cannot seek civil penalties. So even if we were to simply restate our existing policy We could turn this on And and really change the market and it's pretty disappointing that it's been nine years It's been disappointing to me that we haven't done that, but it is something that I want to push for Let me give big picture on auto We are seeing something weird going on. So since 2010 we are seeing a dramatic run-up of Outstanding auto loans. I think we had a blockbuster year of auto lending in in 2018 and Something that is important is technology is really changing this so many of you may know about GPS trackers kill switches other Repo tech this is making it a lot easier to snatch a car When the borrower doesn't pay and the net result is that? There's lenders out there who are able to give a loan even if they know it won't be repaid Because they know they're going to be able to take that car back. I hope everyone has seen the John Oliver segment about a car that was You know sold and repossessed so many times But that's when a lender knows that they don't they don't it doesn't even matter if that if that borrower crashes and burns And this should be a real worry for us because an automobile is the vehicle is literally the vehicle In which you can get to employment in which you can access health care in which you can actually be Participate in society for the vast majority of America So if we're seeing repossessions What we're seeing if we're seeing? Auto loan delinquencies at a rates at rates brilliant We should we should be alarmed and we should not sit around and do nothing like we did with student debt You know, it's the same story over and over we saw it in mortgage We saw it in student lending we're seeing it in auto and then add on top of that Subprime auto is disproportionately affecting people of color. It is Disproportionately affecting these zip codes that are lower income and you know Those are places that don't necessarily have the political power to demand certain types of change So I think that if we don't do anything about it if the CFPB doesn't do anything about it Then you know, we're gonna need the states to really ramp up on this and the thing that I worry about is there's not going to be a crisis To the banks on this, you know auto lending is not going to threaten their capital adequacy. There's they they have The ability to keep repossessing and doing it cheaply Is is not going to threaten them. So it's going to be about how do we better protect consumers? Not how we protect the adequacy capital adequacy of financial institutions. So I hope that we can Make big progress on this And at some point actually use that authority because absent using that authority. We are not going to ever fix this I think do you think Given given what you just said should there be some kind of ability to repay rule in autos and and what can the FTC do if anything about the Long experience of discrimination in auto lending markets. Yeah, so Many of you may know that the FTC Also enforces the Equal Credit Opportunity Act. We have not brought a case in a very very very long time and That there was obviously some efforts at the CFPB to to go after that We have to deal with discrimination in auto lending. I I personally feel that there needs to be more data about Auto lending outcomes and and and the more data we have the better we can bring those cases and better we can combat it You know with respect to what a rule could look like You know, I think putting some common-sense rules that not only document our existing Enforcement record of what we know to already be unlawful so that we can get that penalty authority But also to make sure that We don't have the type of abuse That allows a business model and a market failure to persist so I don't know what that would look like But it needs to be on people's radars and I think it needs to be on our radars before the economy sours rather than too late So let's um, let's turn to small business markets There's been dramatic changes in the small business markets in the last 10 to 15 years With a very wide variety of bank and non-bank participants Rise of of different kind of lending techniques some of those have positively increased access to capital for small businesses who were not able to obtain it before but there's also been a rise of Business lending activities that are reminiscent of the kind of subprime mortgage Lending that we saw in the lead up to the crisis with Very complicated terms very difficult to to compare Terms across loan offers most of you know this but there's no truth in lending act for small business lending What could the FTC or other regulators be doing? To clean up this marketplace and help the high-road players as you described before in in in the Autocontext, but how can we help the high-road players? Thrive how can we protect consumers what in a big picture sense whether from the FTC or otherwise should be doing in this space Yeah, so let me make a few points on this first It is already very very difficult for Small businesses to form and compete you know for the past 35 years we've seen a secular decline of new business formation and I think part of that is due to Massive consolidation in sectors across the economy. It is much harder for a smaller firm to enter Because of the big it's hard hard to compete with the big guys and that's a major and I trust question that we have to confront but Small business lending in the non-bank sector really is the exclusive jurisdiction of The FTC the CFPB does not have Authority to deal with this the CFPB does have some direction To do some data collection around it, but not really to enforce the broad set of laws So few problems I see one. I think we're seeing a massive increase in Payday style small business loans So the way often this works is you have a small business whether it's a restaurant or a retailer They are collecting a lot of their revenues through credit card received through credit card transactions And you have lenders who essentially offer Very short-term loans that are secured by those credit card receivables. So it's just like a Payday loan in some ways, you know the terms and conditions you see many of you have heard that they include Terms like confessions of judgment things that were banned by the FTC credit practices rules 30 years ago But that do not cover small business loans I think the the there are now around 15 billion dollars of origination in these Payday style small business loans. So this obviously is going to target some of our most vulnerable You know individuals. I also think that it's not just a typical small business that it might also be gig workers other workers who might be independent contractors or You know having a Their primary income not tied to traditional employment. So We at the FTC we're going to be holding a Forum on this but I hope that it it lays the groundwork for More data and more enforcement and as appropriate. I think they will need to be Greater awareness about how these types of lending models are infecting Various parts of of our financial economy. I mean again, I hate to say it We've seen this before so let's not pretend to be surprised by it it has the same interface with capital markets the same interface where these these loans are our Bundled and and sold and and transacted on and it is not a small small It's not a bunch of small little players There is connectivity to Wall Street and if we if we don't call it out for what it is then it's just going to get worse And I I I don't want us to just keep repeating You know, frankly What we missed and what we failed that before? the the confessions of judgment Approach seems particularly egregious. This is where Businesses basically give up their right to contest whether or not they're in default on their on their loan In advance in the contract It's becoming increasingly deployed. I wonder if you think that there are strategies within the existing Legal system within the existing set of rules to attack that of course there is I mean these are confessions of judgment were Were banned in Consumer credit contracts for the most part through the credit practices rules that I believe were finalized in the 1980s So there is existing authority to do it Whether there's the courage and the and the will and the The the tenacity to get it done, you know That's what we have to push for and I think that means a lot more people pushing our agencies and don't don't just assume That will do nothing, but We have to hear from people about where the problems are in the market or will not get solved So I think this raises a larger question about Junk contract clauses And one of the things that I think we need to start thinking about is we often attack these Clauses one by one But we need to start thinking bigger picture about what are the types of contract terms that are fundamentally unfair And how do we use the existing authority under federal and state law to go after that because when when a When a seller or a lender has so much market power or so much ability to obscure Terms, you know, this can lead to Contracts that have that are corrupted by these contract terms. So we've you know, there's been big fights over the years about Forced arbitration. There's been big fights about other terms But I think we have to look at a comprehensive view about how Contracts where there's a big guy on one side and a little guy on the other How do we how do we change that game because we cannot be on a treadmill of Going after these contract terms one by one because new ones will pop up And we'll still be staying behind so we need to we need to get we need to get more Scholarship on how to reform these contracts and we have to think of it in a bigger picture of our law enforcement and regulatory approach Because when when when powerful firms are able to they they they use Contracts they use their market power to essentially bully out fair competition and and it that's that's not what a that's not what a free and fair market is supposed to look like I've always been struck that The behavioral economics literature has made this huge progress on the consumer side You know, we now understand a lot more about human decision-making The way in which human beings are fallible and have a market Can take advantage of that fallibility We seem not to have made much progress translating that same set of ideas for business owners So most small business owners are Just to state the obvious people And most people have biases whether they are and fallibility whether they're Serving as a business or as a consumer and most small businesses are not big enough to hire Accountants and lawyers and and the other expertise they need There's been some progress recently on this at the state level. So, California has a Truth in Lending Act now For small businesses. I'm wondering whether you think that's a Root forward as we're trying to make progress at the federal level Should states be following California lead or the other things states can be doing to be helpful in this space. Yeah, I well I Favor disclosure, but I I don't want anyone thinking that disclosure fundamentally fixes some of this So, you know, those are good efforts, and I think other states are looking at similar things But you know you mentioned that small businesses people run small businesses are people. They're also consumers We're seeing the same thing with Workers so employees Having some of these clauses and fine print that are fundamentally You know lead to problems in how and we've done some cases related to uber drivers and You know with respect to financing and and You know promises being made to them about how much they've earned But we got to take a hard look at all of these Contracts, and I hope that you know that is something that is not just going to be solved by disclosure But at a certain point that certain types of terms are just we can't have a competitive market if those exist Confessions of judgment is not going to lead to a competitive market if someone has to stipulate that they're guilty You know when they when at the beginning of the transaction, it's great I'm gonna come back to your point about the gig economy, but I think it it is illustrative of the way in which the line between Being a person and being a business is quite Fuzzy blurry Let's let's switch gears and talk about credit bureaus It's hard to find Regular consumer who's really excited about the credit bureaus in a positive way Lots of people have problems with correcting errors They're trapped up in a variety of ways we have the Authority for the Consumer Financial Protection Bureau to supervise the Bureau's The FTC has some authority here as well. What can be done to? Really change the behavior of the of the credit bureaus. Yeah, and and one of the One of the things I think that has been under reported has been how Positive the role of CFPB supervision on the credit bureaus has been I think there has that has changed the way The credit bureaus are thinking about things, but at the same time They're still Serious problems, and it's not just accuracy. Obviously the FTC Has publicly announced that we are investigating the massive data breach at Equifax And and the implications of that for for consumers So, you know data security is obviously a key focus of the FTC The CFPB has amassed a really strong team of people who have expertise in in credit reporting But I think there's a bigger question here, which we need to start thinking about which is competition I Always say this and many others say it too Consumers are not the customer of credit bureaus. They're the product, you know They're it's their data that is being sold and Transacted and this is increasingly what's happening in our data economy What we have what we see online is massive data collection on us to monetize us through Online behavioral advertising we have data brokers the FTC did a very very thorough Study of data brokers a few years ago and the credit bureaus the data brokers Big a big technology firms. They are sort of merging In there in their business model in that they are selling us To others and that's that's something that we have to ask some hard questions about is how are they're going to be the Right types of competitive pressures To lead to better practices, and I'm not sure the way the credit bureau market is structured That will ever get that and I think our our traditional thinking has been let's regulate it But if that's not working, maybe we need to think about bigger structural solutions, you know in other OECD countries There's a lot of different models for how credit reporting works Should there be? What would we be better off with more credit bureaus that that I don't know? But we need to if there's not going to be if there's a race to the bottom that there's more profits Essentially for under investing in fair treatment of consumers That's that that we have to think about so on a secondary level There's a lot of lingering issues about the appropriateness and of uses of credit credit reporting data So I think obviously the use in Employment the use in tenant screening days these all raised tough issues and I'm not really sure if our current regime of Encouraging people to check their reports is really working if you can't easily dispute and correct I mean, I I'm I am really skeptical That I'm not sure we should even be allowing Medical debt on credit reports, you know There's so much garbage medical debt that is put on people's credit reports and the reality is most consumers Are just in this ping-pong match that they're watching Between the provider and their insurance company then one day they're called and they said oh, yeah You owe this bill and for most people, you know, they're not they're not professional consumer advocates They might not be they might not know how to navigate that and I'll tell you you know for those of us who you know Have a lot of patient experience You also you feel some sort of embarrassment with your doctor if you're on some list as you're not paying So I think a lot of people end up just writing that check or or charging that even when they don't really owe it Because they're being jerked around by both the insurance company and in some cases the credit bureau now The CFPB study on medical debt and credit scores. I think Definitely helped because people are not it's not being reported immediately. It's not necessarily impacting their score But even if it does get reported You know, I'm not really sure the value it gives other than maybe coercing someone to pay up So there's a long list of issues I am not pleased at all at the state of credit reporting still But I don't want to I don't want to dismiss the massive leaps forward that the CFPB has led but there there's there's definitely more work to do and You know, I hope the credit bureaus know that we are still taking a hard look You know at their business practices and let me just say one more time We are seeing that they are increasingly Looking more like data brokers and you know mass attack data aggregators It's more than just fair credit reporting at covered covered activities So let's um, let's dive in just for a few minutes on student loans We're gonna have a whole on discussion wait wait Henderson's talk and then a panel discussion on student loans Given your experience at both Department of Education and CFPB on these issues really you really pushed both entities quite hard on The problems in the for-profit college market and student loans more broadly What progress has been made, you know, where do you see the pitfalls? What are we gonna do about it? Yeah, so and you know two minutes or less Take your time. Yeah, so we still have We still have about once every 30 seconds someone defaulting on a federal student loan This is thousands a day and what I'm concerned about is we're not actually seeing Delinquency or default rates really slow down even as the economy gets better So this suggests that you still have a huge amount of borrowers who are burdened with this debt And are really not able to get the value out of out of that degree. So I reject this singular focus on Getting more students to complete college. I don't I think that's good But we need to really think about the existing one and a half trillion that's out there I think the Corinthian college scandals have really opened people's eyes about whether this was just a fundamentally Fundamentally corrupt system from beginning to end and and whether we need to be thinking much more broadly about cancellation Not just for those who were victimized, but those who were set up to fail From the beginning. So I think you're gonna start seeing over the next year much bigger discussion about student debt Cancellation where we knew it was it was screwed up from the beginning There's gonna have to be discussion about completely rethinking the student loan origination system because if If if if we're gonna allow this to continue It is only going to have more negative repercussions for our economy in our society and I'll tell you I Think a lot of people who Graduated or came of age around the time of the financial crisis. They were they were in college I mean, I can't tell you we've so many of us have met met students who told us well, you know You know, my my parents were laid off or we lost our home and now it's all on me to pay for this and You know sophomore year of college. What are you gonna do? You're gonna borrow big I mean hope it all works out But the structure of our economy doesn't work this way and look look at at schools like Michigan I mean even here a state school Some people have to borrow big to go to law school to go to graduate school And and it really skews how they think about their career path and and that that has some real repercussions So let's um, let's turn to Service members military members You know in the in the financial crisis and and as we were thinking about the Dodd-Frank Act and the CFPB Kind of one of the issues front and center for us was the way in which service members had really been abused On around military bases or during overseas deployments The CFPB was given important authorities in this area You know or how much are service members still at risk? Are you seeing problems in the market that you think we should be focused on? Yeah, so you still you obviously see a very different set of demographics of the force than you did 10 years ago It's it's not a as much of a wartime force than it was but you still see You know many young often from lower-income backgrounds especially men Being off on their own and being heavily targeted not just by by a whole whole suite of You know unscrupulous actors now what is good is that I think the results of the Military Lending Act have been very very positive That you're you're seeing You know big improvements there, you know, we mentioned auto earlier We still have big problems in the auto market with respect to Service members, so I think that has to be a big focus for the FTC and for the States The service member civil relief act, you know, we should we should all take serious pause at not only the illegal foreclosures got a lot of attention But you know the Santander case where you know someone while at basic training Getting their car taken from them illegally You know, it's just egregious and I I worry that We have not calibrated correctly the right types of consequences for that behavior And we need to start thinking about What types of government benefits licenses favors are we giving these firms that when they Aggregiously break the law, you know is a monetary fine enough? And you know, how many times do you have to break the law? Before we start thinking about what do we do with your license? What do we do with? You know some of the government benefits you get and I think that's that's one of the only ways We're going to deter some of these bad actors We actually have a great a lot of great work at the FTC with respect to lead generation targeting military service members and veterans and I think Focusing hard on These lead generators is going to pay dividends Me let me ask you a Question about something really not in the FTC's jurisdiction at all, but I'm sure you've had a chance to think about and that's that's Wells Fargo in many ways kind of a Prime example of the kind of abuses that can happen in the in the retail banking market How do you think that the federal regulators have dealt with Wells Fargo so far? Has it been enough? What are the further steps you think might be useful? Yeah, so One of my earliest priorities when I got to the FTC was sharpening our focus on repeat offenders and violators of Consent decrees and other orders, so you know you have a Very good example here of a firm that Had sir has serious managerial deficiencies and compliance deficiencies And obviously the CFPB in the city attorney of LA the fake accounts scandal that was uncovered I mean it has literally been over and over again more and more and more problems that we've been hearing and I think the big Lesson that all of us have to take from this is Are we fundamentally? miscalibrating monetary penalties our monetary penalties those those penalties that make for a good Regulators press release is it actually just a joke sometimes Now obviously I think We have some agencies that really use their authorities and seek seek an amount that is highly justifiable in the courts But I you know I I look at someone like Wells Fargo, and you know, I'm I Have wondered you know with all these fake accounts, you know, should we really be trusting them? with FDIC insurance the way we are doing so and I'm not saying You know it raises all sorts of too big to fail issues, but the the FDI act is quite clear that for this Repeated unsafe and unsound business practices You know this is not something that the public's deposit insurance should necessarily be protecting So I think thinking more about the other leavers that we have I think the feds action To you know lead to some real governance changes Changing up the board these type of structural remedies that fundamentally reshape executive compensation Governance and access to these government benefits has to be part of that pool So, you know, this is not something I've studied so closely, but I think the experience We're having in Wells Fargo it's signaling to to so many of the agencies that The public is going to become more skeptical just about these billion dollar numbers And they're not going to see the sort of changes until we think about other types of structural remedies and and and I think again It goes to fundamental incentives Structure of those business models and and Wells Fargo like many, you know It's a bank with a federal charter that gets federal deposit insurance And and benefits really greatly from those from those benefits. So, you know, we should ask questions again Are we are we giving those benefits to freely? When we have repeated problems that are just that need to get solved So let me ask them one last question. I'm going to open it up to all of you for questions I want to come back to your your comment on the gig economy and and tech companies in general and Talk about the competition policy side of the house at the FTC so There's been all kinds of Stories coming out about Anti-competitive behavior in the tech sector and one particular problem that's that's risen to the top is a Non-compete agreements for workers in the tech economy. I'm wondering what effect you think that's having on competition in tech Is it fair are there things that the FTC or others can or should do about it? Yes, so non-compete agreements there's been more and more data and research including by Alan Krueger about Really how non-competes may be? distorting a competitive labor market that it may actually be suppressing wages For especially many of our lowest income workers The Illinois Attorney General the Washington Attorney General others have actually done some enforcement work in this to and have declared the use of some of these clauses as as a violation of their Many FTC act their their state unfair business practices act so I Raised in an article in September as to whether the FTC should Consider using its unfair methods of competition rulemaking to develop the law And offer more clarity as to when the use of these non-compete clauses may be a violation of federal law So it is something that they're proliferating and if we don't do anything about it We are not going to see a competitive labor market, you know with respect to tech one thing that I think is important for your center and for You know students who are thinking about finance law and policy is The line between financial services and tech is also blurring a lot The way in which big data is being used for Alternative underwriting the way in which technology firms are increasingly entering the financial services space Some of it is good. Some of it raises some real questions about how that data is going to be used or misused So we have to everyone who is interested in a fair financial market has got to be thinking about our Surveillance and data economy too And for everyone who cares about a competitive financial services market, they also have to wake up And start asking harder questions. Are we doing enough with respect to our antitrust laws with financial services firms? The Federal Reserve and the Department of Justice, you know, take the lead on banking mergers But there's all sorts of other Financial services mergers that that really need a lot more scrutiny and I think we're now seeing big bank mergers again After the Dodd-Frank D-REG bill we have we're now seeing larger banks seeking to merge I think that's going to continue And we need to we need to determine whether we are using all the tools we have To make sure those markets are competitive and that community banks and others are able to compete That's great. So let me let me open it up to all of you Pat Pat, could you just wait for the mic to arrive to you? We have folks watching online It was on Now it is. Okay. Thank you. Well, thank you so much. I just wanted to run by you a couple of topics I'd be curious about your take on the state of the effectiveness of ECOA today ECOA has always been a difficult statute to enforce and now now we have the concern that the disparate impact theory is Endangered that's one one question and the other is if the CFPB adopts a regulatory sandbox for Fintech and perhaps some other things What would be the interaction of that CFPB sandbox with the FTC's jurisdiction? Yeah, good. That's a good question. So I think Frankly all of our discriminant anti-discrimination laws They really need we they were not designed for This mass data surveillance economy So if we look at what's happening It's not just in the underwriting of credit What what ads not for housing employment for products It's not like you're opening the newspaper the newspaper those ads are now customized to you and with with artificial intelligence and machine learning and all and algorithms it is Fundamentally a different world where it's not necessarily a human intentionally discriminating but the algorithm itself may be discriminatory, but we have no real way to check for that Because it may be relying on artificial intelligence and and evolving on its own. So, you know the ECOA framework I I I obviously want us to use it to Every every bit we can and obviously that means that using disparate impact theory But I'm not sure that law syncs up well with with with the data economy today and I hope that When the next financial reform comes or when we start talking for real about Accountability and in tech and big data that that becomes a centerpiece of it not just in credit But in all these other economic opportunities now with respect to the sandbox That is a real open question you know the CFPB certainly has you know Special authorities with respect to ECOA, but you know the FTC enforces that so I think that's really to be determined and I I get these the attraction to these sandboxes, but it's very important That it just does not become the side door to essentially Deregulating the whole thing and and that is something that we need to pay very very close attention to Because there is a lot of opportunity for abuse in it And that means that we're gonna have to make sure that anyone who's benefiting from it is Really going to be held accountable for producing a lot of data producing And adhering to the highest standard so you know I I have worked in online lending and in in You know innovative financial, you know technologies, but I'm not so sure that I see both sides, but I'm skeptical as to Whether that's going to lead to the benefits that they think it will have a question I just looked up a statistic 15% of American smoke There's you know rampant alcohol abuse People make bad choices bad decisions bad behavior How do you and the in making policy account for? People just doing bad stuff that you tell them they shouldn't do but they do it anyway And then you have to have a policy that protects them Well, I think we have to start with just the idea of we can't let people be lied to so You know when it comes to tobacco use we have a history in this country of essentially people being lied to You know with opioid abuse there's now serious. We're now learning more and more About how a big corporation concealed and even lied So I start there But your your question about how to how to nudge people into better decisions There's you know a lot of literature on that, but I still think We have to make sure that there are real consequences when people are being lied to and one of the things I have You know not been thrilled about is the amount of Settlements that the FTC enters that are zero dollar these kind of no consequences Settlements the free pass I understand and fully recognize that there's some of that may be related to Limited authorities we have but some of it Is just backwards in terms of how we are trying to to Hold accountable those who do lie so I don't know if that's responsive, but that's that's the instinct I have is that's our first priority But then there's lots of other tools outside of law enforcement to try and help people make better decisions Um Yeah, I'd like to take that actually a step further So when we talk about justice in our country and we talk about humans It seems like we come from this point of view here where uh, how far can we punish someone until it's just Unacceptable to society but when it's a business We are constantly talking about what's the least amount we can do to get the change we want Right, so we come from these two different points of view whether it's a business or whether it's a human being And even when you know, you're talking or anyone's talking I feel like about financial justice Um towards business practice Are we talking a metered language and I just wonder how do we change that paradigm where we feel like We can be draconian that we feel like we can really lay a hammer down What are the hurdles that you know, we run into that we don't run into with humans We have no problem putting humans away to jail for extremely long periods of time in our country But you know, we can't go after banks. We can't deal with these companies Yeah, well, I mean it's in some ways the obvious political power of You know our our most influential and wealthiest citizens and firms that are able to Distort the justice system in their favor. So I don't know how to solve that one, but You're right that I I think that if we are not It goes to what I said about those Regulator press releases, you know A billion dollars is a tremendous amount of money But is it a tremendous amount of money for you know, some of the largest firms on the planet? and Is paying that fine sometimes a gamble that was worth taking so again, what I what I go back to is We need to keep thinking about Is a monetary remedy Going to solve it and in some ways, especially for those who repeatedly break the law Do you need to go to courts and do you need authorities to Fundamentally fix the structural incentive that leads them to do that. I mean again, I think that goes to executive compensation it goes to board governance And it goes to especially individual liability so we we recently um had a had a children's privacy case and uh commissioner slaughter and I Spoke up about the need for in these cases of Very serious misconduct. This was a case involving Essentially the disclosure of very sensitive data about young children that was available to people and You know the the company decided to let it go on Uh, and the question then becomes is is the panel is the fine to the company, right? Or do we need to Really sharpen our focus on the role of individuals An individual accountability Until we start doing that more You know, that's not going to really change the structural incentives and behavior A couple of just so I I worked I was on a board of directors in the uk And the only thing I learned from being on the board of directors of a company in the uk Was their company's house our sec tells you that You're pretty permissive as to what you can do except for If your company becomes insolvent The directors are personally liable And and and we we've taken away the personal liability of managers and directors through insurance and other things. I mean You talk about wells fargo The ceo paid a billion dollars in fines last year and got a five percent raise. He's making 18 and a half million dollars When do we get to the point where? When Corporations do bad things, you know, and maybe it's pulling their license, but the other alternative is Which is what I heard a lot during the Financial crisis. Why didn't we lock anybody up? Are there do we have the ability to do criminal prosecutions for Crimes whether they be at the cfpb or the ftc Yeah, I I'm not a criminal prosecutor But I think that is certainly if we look at what happened in the savings and loan scandal A lot of people Went to prison And and that didn't happen This last time obviously criminal law is something that is also part of the policy toolkit of the extent to which certain things Should be subject to criminal penalties You know as a civil law enforcement agency I still think that Even civil law enforcement that targets individuals Does something I don't think it's criminal or nothing um, and That's an important piece of Really what we should be doing so I'll tell you the ftc we name individuals a lot For small scammers But I'm not so sure that we should assume That a large firm, uh, shouldn't necessarily have the same level of scrutiny So I don't know the answer to your question My gut tells me that we did not use the criminal authorities as vigorously as we should have I'll make another point You know if we look at, um Theranos, uh, if we look at, um, even Corinthian and it Corinthian and it might be known to many of you in this room It they are were large publicly traded firms at the cfpb sued. They are both now Uh defunct You know the the leadership of those firms engaged in billions of dollars of of harm To so many students Uh, and the only real personal accountability they faced was you know an 80 thousand dollar fine By the sec and and what what kills me is that You can do, uh, you can really Take advantage and lie and cheat consumers And nothing really happens to you personally, but if but but how dare you lie to an investor Um, and if you lie to an investor boy, are you going to be personally held accountable for that often? So I think we sometimes need to think about whether that whether Massive fraud against consumers, you know, are are we do we have that calibration rate? What is it going to take? For us to regulate google I listened to the hearings on c-span and I was struck by the fact that You're not going to get decent legislation If it seemed like many of the members of congress needed tutorial On the field to be asking the right questions even Yeah, so, um Just to give you a sense Six of the 10 largest Uh corporations by market capitalization are either american or chinese technology firms This is a dramatic change. Um, you know, many people here might think about The valuation of large financial institutions those firms eclipse them by far so I guess my reaction to you is I don't really think You need to be a technologist or a computer scientist To know how to put into place regulations for some of these firms Our regulations have to be rooted in our values about what we think is fair in terms of you know, what professor mccoy asked about discrimination What uh comes about with privacy and the use of our data? So obviously we want to be Driven by evidence But you know on both sides of the aisle People are uncomfortable not just in their heads, but in their hearts About some of the practices that are uh, that they see Especially with mass data aggregation Online and especially how that data can be used To block new market entrance And to monetize consumers and and in some ways that leads to Real threats to our journalism industry to our democracy to our national security You know data security is a big focus I mean data security many of our largest data breaches These are assets that are are being Targeted by by foreign state actors because they know this rich set of data being collected about us Has real value. So I don't know if of course we want our legislators to be smart about the questions to ask but I don't I I don't want anyone thinking that Uh, you have to be a computer scientist or a technologist to engage in this debate All of us should be able to Engage in this debate no matter how we participate in the economy No, there's yeah, uh, yeah, so I wanted to ask about these sorts of I guess services that say that they're going to Help consumers, you know manage their credit better I credit karma is a big example that I can think of are these I guess helping consumers understand Like I'm a user and I you know, there's certainly some things that I've learned or they I guess doing more harm than good by Collecting a lot of that information such as they offer free filing But they then say they're going to use that information to market, you know Financial services to you. What are your thoughts on things like that? Yeah I think that in the next few years. We're going to have to switch our definition of the word free So free A lot of things are offered for free um But they're actually a real exchange and I wouldn't even call it a fair exchange I would sometimes call it, you know offering something for free But pickpocketing someone and then selling what you took from them Uh, because it's not clear at all to consumers what is being taken from them uh The ability The ability of for this to even get more complicated when we make the transition to 5g and for for 5g is going to have speeds um For mobile communications in ways that we see only for fixed and that is going to lead to a huge blossoming of internet of things and and More wearable devices and connected cars And the amount of information That is going to be available on us That automotive companies can collect that that retailers can collect It's going to lead to more personalized pricing which raises a whole other set of competitive issues and consumer protection issues So we are just we I am very worried That we are not up to speed As state and federal regulators on the implications of this for our economy and our society So, you know, I don't know what the answer is specifically to those specific firms, but If we don't change our thinking on the word free quickly, uh, I don't I think it's just going to lead to a lot of delayed action That is long overdue Thank you very much. Please join me in thanking Rohit Chapra