I AM DELIGHTED TO WILL GIVE YOU BACK TO THE FORD SCHOOL OF POLICY AND THE CONFERENCE ON CONSUMER PROTECTION IN AN AGE OF UNCERTAINTY. WELCOME BACK TO THOSE IN THE ROOM THANK YOU TO THOSE WATCHING ONLINE. IT IS A REAL PLEASURE THIS MORNING TO BE ABLE TO BE IN CONVERSATION WITH ROHIT CHOPRA. HE WAS A ASSISTANT DIRECTOR AT THE MANAGEMENT BUREAU UNCERTAINTY AGENCIES FOR STUDENT LOAN. HE PLAYED AN INSTRUMENTAL ROLE IN THE AGENDA IN THE STUDENT LOAN FOR-PROFIT COLLEGE MARKET. HE ALSO SERVED AS SPECIAL ADVISOR TO THE SECRETARY OF EDUCATION TO RETHINK THE DEPARTMENT'S OVERSIGHT OF INSTITUTIONS. AND FOR CONTRACTORS. I AM DELIGHTED TO WELCOME YOU BACK TO FORT SCHOOL OF IN OCTOBER 2017 TO SERVE OF THE FEDERAL TRADE COMMISSION. AT UNANIMOUSLY CONFIRMED BY THE SENATE APRIL 2018. HE HAS PLACED A STRONG EMPHASIS ON INCREASING MILITARY REMEDIES AND CONFRONTING THE CHALLENGES. AND RATHER THAN A FORMER KEYNOTE ADDRESS ROHIT HAS AGREED. LET ME START BY ASKING AFTER THE FINANCIAL CRISIS. APPARENTLY I HAVE A AND BAKING REGULATORS WHO ARE OUTSPOKEN ABOUT NOT LETTING WHAT HAPPENED HAPPEN AGAIN. THEY DO NOT WANT TO BE PREEMPTED. THEY DO NOT WANT TO SIT ON THE SIDELINES WHILE THINGS GO AWRY. THAT IS A MAJOR STRENGTH. OBVIOUSLY WE ARE BOTH A LITTLE BIASED ON THIS BUT A MAJOR STRENGTH. AT LEAST WE HAVE A CFPD AND THAT IS SOMETHING THAT IS NOT EVER GOING TO GO AWAY. AND WE WILL MAKE SURE OF THAT. BUT THERE ARE MIXED EVIDENCE A SOME OF OUR OTHER BANKING REGULATORS ARE DOING. IF WE LOOK AT THE MACRO PICTURE OF LOW UNEMPLOYMENT. LIKE WE ARE SEEING NOW. WHY ARE WE SEEING THIS TYPE OF DELINQUENCY? WHY ARE WE SEEING SUCH ONGOING PROBLEMS IN STUDENT LENDING? WHEN WE PEEL BACK ONE LAYER OF THE ONION THERE ARE A LOT OF TROUBLES THAT I AM NOT SURE ALL OF OUR REGULATORS ARE ON THE GAME ON THAT. AND THAT WORRIES ME. THAT WORRIES ME THAT WE ARE NOT PREPARED AS WELL AS WE COULD BE FOR THE NEXT RECESSION. WHICH I DON'T KNOW WHEN WILL COME BUT WILL COME. MAYBE I WILL PUT YOU ON THE REGULATORY QUESTIONS. YOU NOTED THE RISE OF ACTIONS BY STATE AG AND STATE REGULATORS. AND THE DENUTION OF ENFORCEMENT OF THE ARE THEY UP TO THE TASK OF FILLING IN? WHAT IS THE ROLE OF OCC AND FTIC AND THE FED. OTHER BEING AGGRESSIVE ENOUGH? ARE YOU SEEING THE FEDERAL LEVELS REACTION AMONG THE REGULATORS? Rohit Chopra: THE FTC CANNOT FIT THE GAP. WE ARE NOT RESOURCED TO DO SO. WE DO NOT HAVE NEARLY THE EXPERTISE IN TERMS OF THE RANGE OF RESOURCES AND AUTHORITIES AS THE CFPD. I'M HAPPY TO TALK ABOUT THIS MORE. THERE ARE AREAS WHERE THE FTC HAS A UNIQUE ROLE TO PLAY BUT IT SHOULD NOT BE SEEN AS THE BACKSTOP FOR A WEAKENING ENFORCEMENT AGENDA OF THE CFPD. OBVIOUSLY WILL RECEIVE THIS FEDERAL LEVEL IS OF GREAT CONCERN TO ME. BECAUSE IT IS A SIGNAL TO THE MARKETPLACE THAT YOU CAN GO CLOSER TO THE LINE. EVEN CROSS THE LINE AND YOU CAN MAKE A BUSINESS DECISION TO CROSS THE LINE. EVEN IF YOU ARE CAUGHT MAYBE THERE WILL BE MUCH CONSEQUENCES AT ALL. WHAT I WANT TO UNDERSCORE ON THAT IS THIS IS DEEPLY UNFAIR TO LAW ABIDING FINANCIAL FIRMS. SEE A LOT OF FINANCIAL FIRMS THAT ARE WANTING TO FOLLOW THE LAW. AND GUESS WHO WAS MOST HARMED BY THEIR PEERS AND COMPETITORS BREAKING THE LAW? THAT IS FUNDAMENTALLY UNFAIR THIS IS NOT JUST ABOUT PROTECTING CONSUMERS. BUT FOR EVERY LAW ABIDING BUSINESS THEY SHOULD BE ANGRY ABOUT WHAT IS WEAKENING ENFORCEMENT AT LARGE. ROHIT CHOPRA LET ME IN A COUPLE AND LET ME START IN THE AUTO MODE LOAN MARKET.. AS MANY OF OF YOU KNOW THERE E IS A TUSSLE THE LEGISLATIVE PROCESS AND THE CONSUMER PROTECTION BUREAU WAS STRIPPED OF ITS AUTHORITY BACK IN THE DEBATE OVER DODD FRANK. TO WRITE RULES OVER AUTO DEALERS WITH RESPECT TO LENDING PRACTICES. BUT IN A STRANGE TWIST OF FATE IN THE LEGISLATIVE PROCESS. DUE TO THE UNDERHANDED LEGISLATIVE SCHEMES OF ERIC STONE AND OTHERS. MAGICALLY THAT SAME AUTHORITY APPEARED OVER AT THE FTC. AND I WONDER WHETHER, ROHIT CHOPRA:YOU COULD COMMENT ON THIS. IT IS A FUNNY SITUATION. THE FTC WHICH GENERALLY DOES IT HAVE ROLE WRITING AUTHORITY IN MOST AREAS. BUT IN THIS ONE AREA THEY HAVE REALLY CLEAR AUTHORITY. IT IS THE ONLY THING FOR YOU HAVE EASY WAYS TO WRITE RULES. I'M WONDERING IF YOU COULD COMMENT ON WHY HASN'T THE FTC FRONT WITH THIS AUTHORITY TO REGULATE LENDING IN THE AUTO DOING? Rohit Chopra: LET ME GIVE CONTEXT TO ONE THING. THE FTC CANNOT GET CIVIL PENALTIES UNLESS THERE IS A VIOLATION OF AN EXISTING ORDER OR RULES. SO, WHAT BUGS ME. EVEN WHEN WE FIND MISCONDUCT TODAY. BECAUSE WE HAVE A RULE ON THE BOOK WE CANNOT SEEK CIVIL PENALTIES. EVEN IF WE WERE TO SIMPLY RESTATE OUR EXISTING POLICY COULD TURN THIS ON.IT REALLY CHANGE THE MARKETS. IT IS PRETTY DISAPPOINTING IT HAS BEEN 90 YEARS. IT HAS BEEN DISAPPOINTING TO ME. IT IS SOMETHING I WANT TO PUSH FOR. LET ME GET BIG PICTURE ON AUTO. WE ARE SEEING SOMETHING WEIRD GOING ON. SINCE 2010 WE'VE SEEN A DRAMATIC RUN-UP OF OUTSTANDING AUTO LOANS. I THINK WE HAD A BLOCKBUSTER YEAR OF AUTO LENDING. IN 2018. AND SOMETHING THAT IS IMPORTANT IS TECHNOLOGY IS REALLY CHANGING THIS. MANY OF YOU MAY KNOW GPS TRACKERS, KILL SWITCHES, OTHER REPO TECH IS MAKING IT EASIER TO SNATCH A CAR FROM THE BORROWER DOESN'T PAY. AND THE NET RESULT IS THERE ARE LENDERS OUT THERE ABLE TO GIVE A LOAN EVEN IF THEY KNOW IT WILL NOT BE REPAID. THEY KNOW THEY CAN TAKE THAT CAR BACK. I HOPE EVERYONE HAS SEEN THE JOHN OLIVER SEGMENT ABOUT A CAR THAT WAS SOLD AND REPOSSESSED SO MANY TIMES. THAT IS WHEN A LENDER KNOWS IT DOESN'T EVEN MATTER THAT BORROWER CRASHES AND BURNS. AND THE SHOULD BE OF REAL WORRY FOR US. BECAUSE AN AUTOMOBILE IS LITERALLY THE VEHICLE IN WHICH YOU CAN GET TO EMPLOYMENT. IN WHICH YOU CAN ACCESS HEALTHCARE. IN WHICH YOU CAN PARTICIPATE IN SOCIETY FOR THE VAST MAJORITY OF AMERICANS. IF WE ARE SEEING REPOSSESSIONS. IF WE ARE SEEING AUTO LOAN DELINQUENCIES AT RATES WE SHOULD BE UNHARMED. AND WE SHOULD NOT SIT AROUND DOING NOTHING LIKE WE DID WITH STUDENT DEBT. IT IS THE SAME STORY OVER AND OVER. WE SAW IT IN MORTGAGE WE SAW IT IN STUDENT LENDING WE ARE SEEING IT IN AUTO. AT ON TOP OF THAT SUBPRIME AUTO IS DISPROPORTIONATELY AFFECTING PEOPLE OF COLOR. IT IS DISPROPORTIONATELY AFFECTING THE ZIP CODES THAT ARE LOWER INCOME. AND THOSE ARE PLACES THAT DON'T NECESSARILY HAVE THE POLITICAL POWER TO DEMAND CERTAIN TYPES OF CHANGE. I THINK THAT IF WE DON'T DO ANYTHING ABOUT IT IF THE CFPD DOES NOT DO ANYTHING ABOUT IT WE WILL NEED THE STAMPS DOMINIC STATES TO WEAR ABOUT. EVERYTHING I WORRY ABOUT. THERE IS NOT GOING TO BE A CRISIS TO THE BANK ON THIS. AUTO LENDING IS NOT GOING TO THREATEN THEIR ADEQUACY. THAT THE ABILITY TO KEEP REPOSSESSING AND DOING IT CHEAPLY. IS NOT GOING TO THREADED THAT. IT WILL BE HOW TO BETTER PROTECT CONSUMERS NOT HOW WE PROTECT THE CAPITAL ADEQUACY OF FINANCIAL INSTITUTIONS. I HOPE WE CAN MAKE BIG PROGRESS ON THIS. AND AT SOME POINT IS THAT AUTHORITY BECAUSE AFTER USING THAT AUTHORITY WE ARE NOT GOING TO EVER FIX THIS, I THINK. GIVEN WHAT YOU JUST SAID SHOULD THERE BE SOME KIND OF ABILITY TO REPAY RULES IN AUTO? AND WHAT CAN THE FTC DO IF ANYTHING ABOUT THE LONG EXPERIENCE OF DISCRIMINATION AND AUTO LOANS? Rohit Chopra: MANY OF YOU MAY KNOW OF THE FTC ALSO EQUAL ACCESS BUT WE HAVE NOT BROUGHT A CASE IN A VERY LONG TIME. AND THERE IS OBVIOUSLY SOME EFFORTS AT THE CFPD TO GO AFTER THAT. WE HAVE TO DEAL WITH DISCRIMINATION IN AUTO LENDING. I PERSONALLY FEEL THERE NEEDS TO BE MORE DATA ABOUT AUTO LENDING OUTCOMES. AND THE MORE DATA WE HAVE THE BETTER WE CAN BRING THOSE CASES OF THE BETTER WE CAN COMBAT IT. WITH RESPECT TO A RULE COULD LOOK LIKE. I THINK PUTTING COMMON SENSE RULES THAT NOT ONLY DOCUMENT OUR EXISTING ENFORCEMENT RECORD OF WHAT WE KNOW TO ALREADY BE UNLAWFUL. SO WE CAN GET THAT PENALTY AUTHORITY. BUT ALSO TO MAKE SURE THAT WE DON'T HAVE THE TYPE OF ABUSE THAT ALLOWS THE BUSINESS MODEL TO PERSIST. I DON'T KNOW WHAT THAT WOULD LOOK LIKE. BUT IT NEEDS TO BE A PEOPLE'S RAIDERS I THINK IT NEEDS TO BE ON HER RADAR BEFORE THE ECONOMY SOURS RATHER THAN TO LEAVE. LET'S TURNED TO SMALL BUSINESS MARKETS. THERE HAS BEEN DRAMATIC CHANGES IN THE SMALL BUSINESS MARKET IN THE LAST 10-15 YEARS. WITH A VERY WIDE VARIETY OF BANK AND NON-BANK PARTICIPANTS. THE RISE OF A DIFFERENT KIND OF BLENDING TECHNIQUE.SOME OF THOSE HAVE POSITIVELY INCREASED ACCESS TO CAPITAL FOR SMALL BUSINESSES. WHO WERE NOT ABLE TO OBTAIN IT BEFORE. BUT THERE IS ALSO BEEN A RISE OF BUSINESS LENDING ACTIVITIES THAT ARE REMINISCENT OF THE KIND OF SUBPRIME MORTGAGE LENDING THE RESULT IN THE LEAD UP TO THE CRISIS WITH VERY COMPLICATED TERMS. VERY DIFFICULT TO COMPARE TERMS ACROSS QUOTE OFFERS. MOST OF YOU KNOW THIS BUT THE TRUTH IN LENDING ACT FOR SMALL BUSINESS LENDING. WHAT DID THE FTC OR OTHER REGULATORS BE DOING TO CLEAN UP THIS MARKETPLACE? AND HELP THE HIGHROAD PLAYERS AS SHE DESCRIBED BEFORE IN THE AUTO CONTEXT. BUT HOW DO WE HELP HIGHROAD PLAYERS THRIVE? HOW DO WE PROTECT CONSUMERS? IN A BIG PICTURE SENSE FROM THE FTC OR OTHERWISE SHOULD WE BE DOING? Rohit Chopra: LET ME MAKE A FEW POINTS ON THIS. FIRST, IT IS ALREADY VERY DIFFICULT TO SMALL BUSINESSES TO FORM AND COMPETE. YOU KNOW FOR THE PAST 35 YEARS WE HAVE SEEN A SECULAR DECLINE OF NEW BUSINESS FORMATION.AND I THINK PART OF THAT IS DUE TO MASSIVE CONSOLIDATION AND SECTORS ACROSS THE ECONOMY. IT IS MUCH HARDER FOR A SMALLER FIRM TO ENTER BECAUSE IT IS HARD TO COMPETE WITH THE BIG GUYS. THERE'S AN ANTI- TRUST QUESTION WE HAVE TO CONFRONT. BUT SMALL BUSINESS LENDING IN THE NON-BANK SECTOR IS THE EXCLUSIVE JURISDICTION OF THE FTC. THE CFPD DOES NOT HAVE AUTHORITY. THE CFPD HAS ABILITY TO DO DATA BUT NOT TO ENFORCE. A FEW PROBLEMS I SEE. ONE, I THINK WE'RE SEEING A MASSIVE INCREASE IN PAYDAY STYLE SMALL BUSINESS LOANS. THE WAY OFTEN THIS WORKS JUST THE SMALL BUSINESS WITH A RESTAURANT OR RETAILER. THEY ARE COLLECTING A LOT OF THE REVENUES THROUGH CREDIT CARD TRANSACTIONS. AND YOU HAVE LENDERS WHO ESSENTIALLY OFFER VERY SHORT-TERM LOANS THAT ARE SECURED BY THIS CREDIT CARD RECEIVABLES. IT IS JUST LIKE A PAYDAY LOAN IN SOME WAYS. THE TERMS AND CONDITIONS YOU SEE.MANY OF YOU HAVE HEARD THE INCLUDE TERMS LIKE CONFESSIONS OF JUDGMENT. THINGS THAT WERE BANNED BY THE FTC CREDIT PRACTICES RULES 30 YEARS AGO BUT DO NOT COVER SMALL BUSINESS LOANS. I THINK THERE ARE NOW AROUND $15 BILLION OF ORIGINATION IN THESE PAYDAY SMILE SMALL BUSINESS LOANS. THIS OBVIOUSLY IS GOING TO TARGET SOME OF OUR MOST VULNERABLE:YOU KNOW, INDIVIDUALS. I ALSO THINK IT IS NOT JUST A TYPICAL SMALL BUSINESS. IT MIGHT BE WORKERS, OTHER WORKERS MIGHT BE INDEPENDENT CONTRACTORS OR HAVING THEIR PRIMARY INCOME NOT TIED TO TRADITIONAL EMPLOYMENT. WE AT THE FTC WILL BE HOLDING A FORUM ON THIS. BUT I HOPE IT LEAVES 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 OUR FINANCIAL ECONOMY. AGAIN, I HATE TO SAY IT. WE HAVE SEEN THIS BEFORE. LET'S NOT PRETEND TO BE SURPRISED BY HIM. IT HAS THE SAME INTERFACE WITH CAPITAL MARKETS. THE SAME INTERFACE WITH THESE LOANS ARE BUNDLED AND SOLD AND TRANSACTED UPON. IT IS NOT A BUNCH OF SMALL LITTLE PLAYERS. THERE IS CONNECTIVITY TO WALL STREET. AND IF WE DON'T CALL IT OUT FOR WHAT IT IS IT IS JUST GOING TO GET WORSE. AND I DON'T WANT US TO KEEP REPEATING, YOU KNOW. FRANKLY WHAT WE MISSED AND WHAT WE FEEL THAT BEFORE. THE CONFESSIONS OF JUDGMENT APPROACH SEEMS PARTICULARLY EGREGIOUS. THIS IS WHERE BUSINESSES GIVE UP THE RIGHTS TO CONTEST WHETHER OR NOT THEY ARE IN DEFAULT ON THEIR LOAN. IN ADVANCE IN THE CONTRACT. IT IS BECOMING INCREASINGLY DEPLOYED. I AM WONDERING IF YOU THINK THERE ARE STRATEGIES WITHIN THE EXISTING LEGAL SYSTEM BUT WITHIN THE EXISTING SET OF RULES TO ATTACK THAT? Rohit Chopra: OF COURSE THERE ARE. THESE WERE BANNED IN CONSUMER CREDIT CONTRACTS FOR THE MOST PART TO THE CREDIT PRACTICES RULES THAT I BELIEVE WERE FINALIZED IN THE 1980S. THERE IS EXISTING AUTHORITY TO DO IT. WHETHER THERE IS THE COURAGE AND THE WILL AND THE TENACITY TO GET IT DONE? THAT IS WHAT WE HAVE TO PUSH FOR. AND I THINK THAT MEANS A LOT FOR PEOPLE PUSHING OUR AGENCIES AND DON'T JUST ASSUME WE WILL DO NOTHING. BUT WE HAVE TO HEAR FROM PEOPLE ABOUT WHERE THE PROBLEMS ARE IN THE MARKET OR IT WILL NOT GET SOLVED. I THINK THIS RAISES A LARGER QUESTION ABOUT JUNK CONTRACT CLAUSES. AND ONE OF THE THINGS 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 TYPE 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 A SELLER 'S LENDER IS SO MUCH MARKET POWER OR SO MUCH ABILITY TO OBSCURE TERMS. THIS CAN LEAD TO CONTRACTS THAT ARE CORRUPTED. BY THESE CONTRACT TERMS. THERE HAVE BEEN BIG FIGHTS OVER THE YEARS OF FORCED ARBITRATION.BIG FIGHTS ABOUT OTHER TERMS BUT I THINK WE NEED TO LOOK AT A COMPREHENSIVE VIEW ABOUT HOW CONTRACTS. WHERE THERE IS A BIG GUY ON ONE SIDE AND A LITTLE GUY ON THE OTHER. HOW DO WE CHANGE THAT GAME? WE CANNOT BE ON A TREADMILL OF GOING AFTER THESE CONTRACT TERMS ONE BY ONE. NEW ONES WILL POP UP AND WE WILL STILL BE STAYING BEHIND. WE NEED TO GET MORE SCHOLARSHIP ON HOW TO REFORM THESE CONTRACTS. WE HAVE TO THINK OF IT IN A BIGGER PICTURE OF LAW ENFORCEMENT REGULATORY APPROACH. BECAUSE WHEN POWERFUL FIRMS ARE ABLE TO COVER THE USE CONTRACTS. THE USE THEIR MARKET POWER TO ESSENTIALLY BULLY OUT FAIR COMPETITION. AND THAT IS NOT WHAT A FREE AND FAIR MARKET IS SUPPOSED TO LOOK LIKE. I HAVE ALWAYS BEEN STRUCK THE BEHAVIORAL ECONOMICS LITERATURE HAS MADE HUGE PROGRESS ON THE CONSUMER SIDE. WE NOW UNDERSTAND A LOT MORE ABOUT HUMAN DECISION-MAKING. THE WAY IN WHICH HUMAN BEINGS ARE FALLIBLE AND HOW THE MARKET CAN TAKE ADVANTAGE OF THAT FALLIBILITY. WE SEEM NOT TO HAVE MADE MUCH PROGRESS CHANGE THAT FOR BUSINESS OWNERS. MOST SMALL BUSINESS OWNERS TO STATE THE OBVIOUS, PEOPLE. AND MOST PEOPLE HAVE BIASES. WITH THE INFALLIBILITY, WHETHER SERVING AS A BUSINESS OR CONSUMER. AND MOST WILL BUSINESSES ARE NOT ABLE TO HIRE LAWYERS UNDER THE EXPERTISE THEY NEED. THERE HAS BEEN SOME OF THE STATE LEVEL. CALIFORNIA HAS A TRUTH IN LENDING ACT NOW FOR SMALL BUSINESSES. I AND WONDERING IF YOU THINK THAT IS THE ROAD FORWARD AS WE ARE TRYING TO MAKE PROGRESS AT THE FEDERAL LEVEL. SHOULD STATES BE FOLLOWING CALIFORNIA'S LEAD OR OTHER THINGS STATE COULD BE DOING TO BE HELPFUL IN THIS CASE? Rohit Chopra: I FAVOR DISCLOSURE BUT I DON'T WANT ANYONE THINKING THAT DISCLOSURE FUNDAMENTALLY FIXES THIS. I THINK OTHER STATES ARE LOOKING AT SIMILAR THINGS. BUT YOU MENTIONED SMALL BUSINESSES, PEOPLE WHO RUN SMALL BUSINESSES ARE PEOPLE THEY ARE ALSO CONSUMERS. WE ARE SEEING THE SAME THING WITH WORKERS.SO, EMPLOYEES HAVING SOME OF THESE CLAUSES THAT ARE FUNDAMENTALLY LEAD TO PROBLEMS. WE HAVE DONE SOME CASES RELATED TO UBER DRIVERS. WITH RESPECT TO FINANCING AND PROMISES BEING MADE TO THAT ABOUT HOW MUCH THEY EARN. BUT WE HAVE TO TAKE A HARD LOOK AT ALL OF THESE CONTRACTS. AND HOPE THAT IS SOMETHING THAT IS NOT JUST GOING TO BE SOLD BY DISCLOSURE. THAT CERTAIN TYPES OF TERMS. THOSE CONFESSIONS OF JUDGMENTS. WILL NOT LEAD TO A COMPETITIVE MARKET IF SOMEONE HAS TO STIPULATE THAT THEY ARE GUILTY OF THE BEGINNING OF THE TRANSACTION. THAT IS GREAT. IT IS ILLUSTRATIVE OF THE WAY IN WHICH THE LINE OF BEING A PERSON AND BEING A BUSINESS IS FUZZY. Rohit Chopra: GLORY. LET'S SWITCH GEARS AND TALK ABOUT CREDIT BUREAUS. HIS CERTIFIED REGULAR CONSUMER, IN A POSITIVE WAY. AND PEOPLE HAVE PROBLEMS CORRECTING ERRORS. AND WE HAVE THE AUTHORITY FOR THE CONSUMER FINANCIAL PROTECTION BUREAU TO SUPERVISE. THE FTC HAS AUTHORITY HERE AS WELL. WHAT COULD BE DONE TO REALLY CHANGE THE BEHAVIOR OF THE CREDIT BUREAUS? Rohit Chopra: AND ONE OF THE THINGS THAT HAS BEEN UNDERREPORTED HAS BEEN HOW POSITIVE THE ROLE OF CFPD SUPERVISION HAS BEEN. THAT HAS CHANGED THE CREDIT BUREAUS ARE THINKING ABOUT THINGS. BUT AT THE SAME TIME THERE IS STILL SERIOUS PROBLEMS AND IT IS NOT JUST ACCURACY. OBVIOUSLY, THE FTC HAS PUBLICLY ANNOUNCED IT IS INVESTIGATING THE MASSIVE DATA BREACH AT CARFAX. AT THE IMPLICATIONS. DATA SECURITY IS OBVIOUSLY A MAIN FOCUS OF THE FTC, THE CFPD HAS A MASS OF EARLY STRONG TEAM OF PEOPLE. WHO HAVE EXPERTISE IN CREDIT REPORTING. THERE IS A BIGGER QUESTION WE WANT TO START THINKING ABOUT. I ALWAYS SAY THIS AND OTHER SAY IT, TOO. THEY ARE NOT, IT IS THE PRODUCT. IT IS THERE DATA BEING SOLD AND TRANSACTED. AND THIS IS INCREASINGLY WHAT IS HAPPENING TO OUR DATA ECONOMY. WHAT WE SEE ONLINE IS MASSIVE DATA COLLECTION THAT IS THROUGH ONLINE BEHAVIOR ADVERTISING. HAVE DATA BROKERS. IN THE STUDY OF DATA BROKERS. THE DATA BROKERS, BIG TECHNOLOGY FIRMS. THEY ARE MERGING IN THEIR BUSINESS MODEL. THEY ARE SELLING US TO OTHERS. IF YOU ASK HARD QUESTIONS ABOUT. THEN THERE COULD BE COMPETITIVE PRESSURES TO LEAD TO BETTER PRACTICES. AT THE WAY THE CREDIT BUREAU IS STRUCTURED THAT WILL EVER GET THAT. OUR TRADITIONAL SPEAKING HAS BEEN LOOKS REGULATED. THINK ABOUT BIGGER STRUCTURAL SOLUTIONS IN OTHER OECD COUNTRIES THERE ARE DIFFERENT MODELS. SHOULD THERE BE MORE CREDIT BUREAUS? THAT, I DON'T KNOW. IF THERE IS A RACE TO THE BOTTOM THERE ARE MORE FOR FAIR TREATMENT OF CONSUMERS. THAT WE HAVE TO THINK ABOUT. THERE'S A LOT OF LINGERING ISSUES ABOUT THE APPROPRIATENESS AND USES OF CREDIT REPORTING DATA. OBVIOUSLY, THE USE OF EMPLOYMENT. THESE ALL RAISE TOUGH ISSUES. I AM NOT SURE IF OUR CURRENT REGIME OF ENCOURAGING PEOPLE TO CHECK THE REPORTS IS REALLY WORKING IF YOU CAN'T EASILY DISPUTE AND CORRECT. I AM REALLY SKEPTICAL. I DON'T THINK WE SHOULD BE A LOT OF MEDICAL DEBT ON CREDIT REPORTS. THERE IS SO MUCH GARBAGE MEDICAL DEBT PUT ON PEOPLE'S CREDIT REPORTS. THE REALITY IS MOST CONSUMERS ARE JUST IN THIS PING-PONG MATCH. THAT THEY ARE WATCHING BETWEEN THE PROVIDER AND THEIR INSURANCE COMPANY. THEN ONE DAY THEY ARE CALLED AND SAID YOU OF THIS BILL. AND FOR MOST PEOPLE, THEY ARE NOT CONSUMER ADVOCATES.FOR THOSE OF US WHO HAVE A LOT OF PATIENT EXPERIENCE.YOU FEEL SOME SORT OF EMBARRASSMENT FOR IF YOU ARE ON SOME LIST IS YOU ARE NOT TAKING. THEY END UP WRITING THAT CHECK. EVEN WHEN THEY DON'T OPEN. THEY ARE BEING JERKED AROUND BY BOTH THE INSURANCE COMPANY AND IN SOME CASES THE CREDIT BUREAU. THE CFPD STUDY ON MEDICAL DEBT AND CREDIT SCORES I THINK DEFINITELY HELPED. BECAUSE IT IS NOT BEING REPORTED IMMEDIATELY. IT IS NOT NECESSARILY IMPACTING THEIR SCORE. BUT EVEN IF IT DOES GET REPORTED I AM NOT SURE THE VALUE IT GIVES THE MAY BE COERCING SOMEONE TO PICK UP. I AM NOT PLEASED WITH THE STATE OF CREDIT REPORTING STILL. BUT I DON'T WANT TO DISMISS THE MASSIVE LEAPS FORWARD THE CFPD HAS LED. THERE IS MORE WORK TO DO. I HOPE THE CREDIT BUREAUS KNOW WE ARE STILL TAKING A HARD LOOK AT THEIR BUSINESS PRACTICES. AND LET ME JUST SAY ONE MORE TIME. WE ARE SEEING THEY ARE INCREASINGLY LOOKING MORE LIKE DATA BROKERS AND MASS DATA AGGREGATORS. IT IS MORE THAN JUST FAIR CREDIT REPORTING. LET'S DIVE IN FOR JUST A FEW MINUTES ON STUDENT LOANS. WE WILL HAVE A WHOLE DISCUSSION ON STUDENT LOANS. IN A PANEL DISCUSSION.GIVEN YOUR OF THE DEPARTMENT OF EDUCATION AND CFPD AND WILLY PUSHED BOTH ENTITIES QUITE HARD. ON THE PROBLEMS OF THE FOR-PROFIT MORE BROADLY. WHAT PROGRESS HAS BEEN MADE? WE SEE THE PITFALLS? IN TWO MINUTES OR LESS. TAKE YOUR TIME. Rohit Chopra: WE STILL HAVE ONCE EVERY 30 SECONDS SOMEBODY DEFAULTED ON FEDERAL STUDENT LOANS. IT IS THOUSAND THE DAY. WE'RE NOT SEEING DELINQUENCY OR DEFAULT RATES SLOW DOWN EVEN AS THE ECONOMY GETS BETTER. WE STILL HAVE A HUGE AMOUNT OF BORROWERS WERE BURDENED WITH THIS DEBT. AND ARE REALLY NOT ABLE TO GET THE VALUE OUT OF THAT. I REJECT THE SINGULAR FOCUS ON GETTING TO COMPLETE COLLEGE. BUT WE REALLY NEED TO THINK ABOUT THAT 1.3 TRILLION THAT IS OUT THERE. I THINK THE SCANDALS OF OPEN PEOPLE'S EYES OTHER THIS IS A FUNDAMENTALLY CORRUPT SYSTEM FROM BEGINNING TO END. AND WHETHER WE NEED TO BE THINKING MORE BROADLY ABOUT CANCELLATION.NOT JUST FOR THOSE WHO WERE VICTIMIZED BUT THOSE SET UP TO FAIL FROM THE BEGINNING. I THINK YOU WILL START SEEING OVER THE NEXT YEAR MUCH BIGGER DISCUSSION ON STUDENT DEBT CANCELLATION. WERE WE DO IT WAS GOOD UP FROM THE BEGINNING. THERE HAS TO BE A DISCUSSION ABOUT RETHINKING THE STUDENT LOAN ORIGINATION SYSTEM. IF WE ARE GOING TO ALLOW THIS TO CONTINUE WILL ONLY HAVE MORE NEGATIVE REPERCUSSIONS FOR OUR ECONOMY. AND I TELL YOU I THINK A LOT OF PEOPLE WHO GRADUATED OR CAME OF AGE AROUND THE TIME OF THE FINANCIAL CRISIS. THEY WERE IN COLLEGE. SO MANY OF US HAVE MET STUDENTS WHO TOLD US. YOU KNOW, MY PARENTS WERE LAID OFF OR WE LOST OUR HOMES. AND NOW IT IS ALL ON ME TO PAY FOR THIS. AND SOPHOMORE YEAR OF COLLEGE WHAT ARE YOU GOING TO DO? YOU WILL BORROW PICK AND HOPE IT ALL WORKS OUT. BUT THE STRUCTURE OF OUR ECONOMY DOESN'T WORK THIS WAY. AND LOOK AT SCHOOLS LIKE MICHIGAN. EVEN HERE A STATE SCHOOL SOME PEOPLE HAVE TO BORROW BIG TO GO TO LAW SCHOOL. TO GO TO GRADUATE SCHOOL. AND IT SKEWS ANOTHER LOOK AT THE CAREER PATH. AND THAT HAS REAL REPERCUSSIONS.LET'S TURN TO SERVICE MEMBERS, MILITARY MEMBERS. YOU KNOW, THE FINANCIAL CRISIS, ONE OF THE ISSUES IS THE WAY IN WHICH SERVICE MEMBERS HAVE BEEN ABUSED. ON AND AROUND MILITARY BASES OR DURING OVERSEAS DEPLOYMENT. THE CFPD WAS GIVEN IMPORTANT AUTHORITIES IN THIS AREA. HOW MUCH ARE SERVICEMEMBER STILL AT RISK? RAISING PROBLEMS IN THE MARKET YOU THINK WE SHOULD BE FOCUSED ON? Rohit Chopra: YOU OBVIOUSLY SEE A VERY DIFFERENT SET OF DEMOGRAPHICS ON THE FORCE NEEDED 10 YEARS AGO. IT IS NOT AS MUCH OF THE WARTIME FORCE THAT IT WAS BUT YOU STILL SEE MANY YOUNG, OFTEN FROM LOWER INCOME BACKGROUNDS. ESPECIALLY MEN BEING OFF ON THEIR OWN AND HEAVILY TARGETED. BY A WHOLE SUITE OF UNSCRUPULOUS ACTORS. I THINK THE RESULTS HAVE BEEN VERY POSITIVE. ARE SEEING BIG IMPROVEMENTS THERE.YOU KNOW, YOU MENTIONED AUTO EARLIER. WE HAVE BIG PROBLEMS IN THE AUTO MARKET WITH RESPECT TO SERVICE MEMBERS. I THINK THAT HAS TO BE A BIG FOCUS FOR THE FTC AND THE STATES.THE SERVICEMEMBERS CIVIL RELIEF ACT. WE SHOULD ALL TAKE SERIOUS PAUSE. THE ILLEGAL FORECLOSURES GOT A LOT OF ATTENTION. BUT YOU KNOW THEY SANTAN DER SOMEBODY AT BASIC TRAINING HAVING THEIR CAR TAKEN FROM THE ILLEGALLY IS JUST EGREGIOUS. I WORRY WE HAVE NOT CALIBRATED CORRECTLY DIRECTIVE OF CONSEQUENCES FOR THAT BEHAVIOR. AND WE NEED TO START THINKING ABOUT WHAT TYPES OF GOVERNMENTS LICENSES, FAVORS ARE WE GIVING THESE FIRMS. THAT EGREGIOUSLY BREAK THE LAW. AS A MONETARY SIGN ENOUGH? AND HOW MANY TIMES DO YOU HAVE TO BREAK THE LAW? BEFORE WE START THINKING ABOUT WHAT WE DO WITH YOUR LICENSE? WHAT DO WE DO WITH SOME OF THE GOVERNMENT BENEFITS YOU GET? AND I THINK THAT IS A ONE OF THE ONLY WAYS WE WILL DETER SOME OF THESE BAD ACTORS. WE HAVE A LOT OF GREAT WORK AT THE FTC WITH RESPECT TO LEAD GENERATION. TARGETING MILITARY SERVICE MEMBERS AND VETERANS. I THINK FOCUSING HARD ON THESE LEAD GENERATORS WILL PAY DIVIDENDS. LET ME ASK YOU A QUESTION ABOUT SOMETHING NOT IN THE FTC JURISDICTION. BUT I AM SURE YOU HAD A CHANCE TO TALK ABOUT. A PRIME EXAMPLE OF THE KIND OF ABUSES THAT CAN HAPPEN IN THE RETAIL BANKING MARKET. HOW DO YOU THINK FEDERAL REGULATORS HAVE DEALT WITH WELLS FARGO THUS FAR? HAS IT BEEN ENOUGH? WHAT FURTHER STEPS MIGHT BE USEFUL? Rohit Chopra: ONE OF MY EARLIEST PRIORITIES WAS SHARPENING OUR FOCUS ON REPEAT OFFENDERS. AND VIOLATORS OF CONSENT DECREES AND OTHER ORDERS. YOU HAVE YOU HAVE A GOOD EXAMPLE OF A FIRM THAT HAS SERIOUS MANAGERIAL DEFICIENCIES AND OBVIOUSLY THE CFPD AND CITY ATTORNEY OF LA. THE FAKE ACCOUNT SCANDAL THAT WAS UNCOVERED.IT HAS LITERALLY BEEN OVER AND OVER AGAIN MORE AND MORE PROBLEMS WE HAVE BEEN HEARING. AND I THINK THE BIG LESSON THAT ALL OF US HAVE TO TAKE FROM THIS IS, ARE WE FUNDAMENTALLY MISS CALIBRATING MONETARY PENALTIES?ARE MONETARY PENALTIES THOSE PENALTIES THAT BIG FOR A GOOD REGULATORS PRESS RELEASE? IS IT ACTUALLY JUST A JOKE SOMETIMES? OBVIOUSLY, I THINK WE HAVE SOME AGENCIES THAT USE THEIR AUTHORITIES AND SEEK AN AMOUNT THAT IS HIGHLY JUSTIFIABLE IN THE COURTS. BUT I LOOK AT SOMEONE LIKE WELLS FARGO AND I HAVE WONDERED. WITH ALL THESE FAKE ACCOUNTS SHOULD WE BE TRUSTING THEM WITH FTI SEE INSURANCE WAY WE ARE DOING. AS I AM NOT SAYING.IT RAISES TOO BIG TO FAIL ISSUES. BUT THE ACT IS QUITE CLEAR THAT FOR THIS REPEATED UNSAFE AND UNSOUND BUSINESS PRACTICES. THIS IS NOT SOMETHING THE PUBLIC SHOULD NECESSARILY BE PROTECTING. I THINK, THINKING MORE ABOUT THE OTHER LEVERS WE HAVE. I THINK THE FED ACTION TO LEAD TO REAL GOVERNANCE CHANGES. THIS STRUCTURAL REMEDY SET FUNDAMENTALLY RESHAPED EXECUTIVE COMPENSATION, GOVERNANCE, AND ACCESS TO GOVERNMENT BENEFITS. HAS TO BE PART OF THAT POOL. THAT IS NOT SOMETHING I'VE STUDIED SO CLOSELY. BUT I THINK THE EXPERIENCE WE ARE HAVING AT WELLS FARGO IS SIGNALING TO SO MANY OF THE AGENCIES. THAT THE PUBLIC IS GOING TO BECOME MORE SKEPTICAL JUST ABOUT THE BILLION DOLLAR NUMBERS. THEY ARE NOT GOING TO SEE THESE SORT OF CHANGES UNTIL WE THINK ABOUT STRUCTURAL REMEDIES. AND AGAIN, I THINK TO FUNDAMENTAL INCENTIVES. THE STRUCTURE OF THOSE BUSINESS MODELS. AND WELLS FARGO LIKE MANY. IT IS A THINK WITH THE FEDERAL CHARTER VEGAS FEDERAL DEPOSIT INSURANCE. AND BENEFITS GREATLY FROM THOSE. WE SHOULD ASK QUESTIONS AGAIN. ARE WE GIVING THOSE BENEFITS TO REALLY? WHEN WE HAVE REPEATED PROBLEMS THAT NEED TO GET SOLVED? QUICK FOR ME ASK ONE LAST QUESTION AND THEN I WILL OPEN IT UP TO ALL OF YOU FOR QUESTIONS. AND WHAT TO COME BACK TO YOUR COMMENT ON THE ECONOMY AND TECH COMPANIES IN GENERAL. AND TALK ABOUT THE COMPETITION POLICY SIDE OF THE HOUSE AT THE FTC. THERE HAS BEEN ALL KINDS OF STORIES COMING OUT ABOUT ANTICOMPETITIVE BEHAVIOR. IN ONE PARTICULAR PROBLEM THAT HAS RISEN TO THE TOP IS A NONCOMPETE AGREEMENT FOR WORKERS IN THE TECH ECONOMY. I AM WONDERING WHAT EFFECT YOU THINK HAVING INNOTECH. IS IT FAIR? ARE THERE THINGS THE FTC OR OTHERS CAN AND SHOULD DO ABOUT IT?Rohit Chopra: NONCOMPETE AGREEMENTS THERE HAS BEEN MORE AND MORE DATA AND RESEARCH. INCLUDING BY ALAN KRUEGER ABOUT HOW NONCOMPETE MAY BE DISTORTING A COMPETITIVE LABOR MARKET. THAT MAY ACTUALLY BE SUPPRESSING WAGES ESPECIALLY FOR MANY OF OUR LOWEST INCOME WORKERS. THE ILLINOIS ATTORNEY GENERAL, THE WASHINGTON ATTORNEY GENERAL. THAT ON SOME ENFORCEMENT WORK AND HAVE DECLARED THE USE OF SOME OF THESE CLASSES. AS A VIOLATION OF THEIR MANY FTC. THEIR UNFAIR BUSINESS PRACTICES.I RAISED IN AN ARTICLE IN SEPTEMBER AS TO WHETHER THE FTC SHOULD CONSIDER USING ITS UNFAIR METHOD OF COMPETITION WE ARE USING TO DEVELOP THE LAW. AND OFFER MORE CLARITY AS TO WHEN THE USE OF THESE NONCOMPETE CLAUSES COULD BE OF VIOLATION OF FEDERAL LAW. IT IS SOMETHING THEY ARE PROLIFERATING. AND IF WE DON'T DO ANYTHING ABOUT IT WE ARE NOT GOING TO SEE A COMPETITIVE LABOR MARKET. WITH RESPECT TO CHECK. ONE THING THAT I THINK IS IMPORTANT FOR YOUR CENTER AND FOR STUDENTS WHO ARE THINKING ABOUT FINANCE, LAW AND POLICIES. THE LINE BETWEEN FINANCIAL SERVICES AND TECH IS ALSO FLOORING IN 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 FOR QUESTION ON HOW THAT DATA WILL BE USED OR MISUSED. EVERYONE WHO IS INTERESTED IN A FAIR FINANCIAL MARKET HAS GOT TO BE THINKING ABOUT OUR SURVEILLANCE ECONOMY. FOR EVERYONE WHO CARES ABOUT A COMPETITIVE FINANCIAL SERVICE MARKET. THEY ALSO HAVE TO WAKE UP AND ASK HER QUESTION. ARE WE DOING ENOUGH WITH RESPECT TO ANTITRUST LAWS WITH FINANCIAL SERVICES FIRMS? THE FEDERAL RESERVE OF THE DEPARTMENT OF JUSTICE, YOU KNOW. TAKE THE LEAD ON MAKING MERGERS. THERE ARE ALL SORTS OF FINANCIAL SERVICES MERGERS THAT REALLY NEED A LOT MORE SCRUTINY. AND I THINK WE ARE NOW SEEING BIG BANK MERGERS AGAIN. AFTER THE JUDGE FRANK BILL WE ARE NOW SEEING LARGER BANKS SEEKING TO MERGE. I THINK THAT WILL CONTINUE. AND I THINK WE NEED TO DETERMINE WHETHER WE ARE USING ALL THE TOOLS WE HAVE TO MAKE SURE THOSE MARKETS ARE COMPETITIVE. A COMMUNITY BANKS AND OTHERS ARE ABLE TO COMPETE. THAT IS GREAT. LET ME OPEN IT UP TO ALL OF YOU. YES. THANK YOU, THANK YOU SO MUCH. CAN YOU WAIT FOR THE MAN TO ARRIVE. WE HAVE FOLKS WATCHING ONLINE. IS THIS ON? IT WAS ON. GOOD, THANK YOU SO MUCH. I JUST WANTED TO RUN BY YOU A COUPLE OF TOPICS. I WOULD BE CURIOUS ON YOUR TAKE OF THE EFFECTIVENESS OF THE COAP HAS BEEN A DIFFICULT STATUTE TO ENFORCE AND NOW WE HAVE THE CONCERN THE IMPACT SERIES IS IN DANGER BUT THAT IS ONE QUESTION. AND IF THE CFPP IS A REGULATORY, WHAT WOULD BE THE INTERACTION OF THAT CFTP WITH THE FTC JURISDICTION? Rohit Chopra: THAT IS A GOOD QUESTION. I THINK, FRANKLY, ALL OF OUR ANTIDISCRIMINATION LAWS, THEY REALLY NEED. THEY WERE NOT DESIGNED FOR THIS MASS DATA SURVEILLANCE ECONOMY. IF WE LOOK AT WHAT IS HAPPENING IT IS NOT JUST IN THE UNDERWRITING OF CREDIT. WHAT ADDS:NOT FOR HOUSING, EMPLOYMENT, PRODUCTS. IT IS NOT LIKE YOU ARE OPENING THE NEWSPAPER. THOSE ADS ARE NOW CUSTOMIZED TO YOU. AND WITH ARTIFICIAL INTELLIGENCE AND MACHINE LEARNING AND ALGORITHMS. IT IS FUNDAMENTALLY A DIFFERENT WORLD FOR IT IS NOT NECESSARILY A HUMAN INTENTIONALLY DISCRIMINATING. BUT THE ALGORITHM ITSELF MAY BE DISCRIMINATORY. BUT WE HAVE NO WAY TO CHECK FOR THAT. BECAUSE MAY BE RELYING ON ARTIFICIAL INTELLIGENCE AND EVOLVING ON ITS OWN. YOU KNOW THE FRAMEWORK I OBVIOUSLY WANT US TO USE IT TO EVERY BIT WE CAN. AND OBVIOUSLY THAT MEANS USING DISPARATE IMPACT THEORY. BUT I AM NOT SURE THAT LOST THINGS UP WELL WITH THE DATA ECONOMY TODAY. AND I HOPE WHEN THE NEXT FINANCIAL REFORM COMES OR WHEN WE START TALKING FOR REAL ABOUT ACCOUNTABILITY IN TECH AND BIG DATA THAT BECOME THE CENTERPIECE OF IT. NOT JUST IN CREDIT BUT ECONOMIC OPPORTUNITIES. WITH RESPECT TO THE SANDBOX. THAT IS A REAL OPEN QUESTION. YOU KNOW THE CFPD CERTAINLY HAS SPECIAL AUTHORITIES WITH RESPECT TO ECOA BUT I THINK THAT IS TO BE DETERMINED. AND I GET THE ATTRACTION TO THE SANDBOXES BUT IT IS IMPORTANT THAT IT IS NOT BECOME THE SIDE DOOR TO DEREGULATING THE WHOLE THING. AND THAT IS SOMETHING WE NEED TO PAY CLOSE ATTENTION TO. BECAUSE THERE'S A LOT OF OPPORTUNITY FOR ABUSE IT. AND THAT MEANS THAT ANYBODY BENEFITING FROM IT IS REALLY GOING TO BE HELD ACCOUNTABLE FOR PRODUCING A LOT OF DATA. PRODUCING AND ADHERING TO THE HIGHEST STANDARDS. YOU KNOW, I HAVE WORKED IN ONLINE LENDING. AND INNOVATIVE FINANCIAL TECHNOLOGIES. BUT I AM NOT SO SURE. I SEE BOTH SIDES BUT I AM SKEPTICAL AS TO WHETHER THAT WILL LEAD TO THE BENEFITS THAT THEY THINK IT WILL. Man: I HAVE A QUESTION. I JUST LOOKED UP A STATISTICS THERE IS RAMPANT ALCOHOL ABUSE. PEOPLE MAKE BAD CHOICES, BAD DECISIONS, BAD BEHAVIOR. HOW DO YOU IN MAKING POLICY ACCOUNT FOR PEOPLE JUST DOING BAD STUFF. UNTIL THEN THEY SHOULDN'T DO BUT THEY DO IT ANYWAY AND THEN YOU HAVE TO POLICY THAT PROTECTS THEM? Rohit Chopra: I THINK WE HAVE TO START WITH THE IDEA WE CAN'T LET PEOPLE BE LIED TO. WHEN IT COMES TO TOBACCO USE WITH A HISTORY OF PEOPLE BEING LIED TO. WITH OPIOID ABUSE WE ARE NOW LEARNING MORE AND MORE. CONCEALED AND EVEN LIGHT. SO I START THERE. BUT YOUR QUESTION ABOUT HOW TO NUDGE PEOPLE TO BETTER DECISIONS THERE IS A LOT OF LITERATURE ON THAT. BUT I STILL THINK WE HAVE TO MAKE SURE THE REAL CONSEQUENCES WHEN PEOPLE ARE BEING LIED TO. AND ONE OF THE THINGS I HAVE NOT BEEN THRILLED ABOUT THE AMOUNT OF SETTLEMENTS THEY ENTER THAT OUR LETTER ZERO DOLLARS. THESE NEW CONSEQUENCE SETTLEMENTS. THE FREE PASS. I UNDERSTAND AND FULLY RECOGNIZE SOME OF THAT MAY BE RELATED TO LIMITED AUTHORITIES. BUT SOME OF IT IS BACKWARDS IN TERMS OF HOW WE ARE TRYING TO HOLD ACCOUNTABLE THOSE WHO DO FLY. I DON'T KNOW IF THAT IS RESPONSIVE BUT THAT IS OUR FIRST PRIORITY. THERE ARE LOTS OF OTHER TOOLS OUTSIDE OF LAW ENFORCEMENT TO TRY TO HELP PEOPLE MAKE BETTER DECISIONS. I WOULD LIKE TO TAKE THAT A STEP FURTHER. WE TALK ABOUT JUSTICE IN OUR COUNTRY AND WE TALK ABOUT HUMANS. WE COVER THIS POINT OF VIEW HOW FAR CAN WE PUNISH SOMEONE UNTIL IT IS UNACCEPTABLE TO SOCIETY? WHEN IT IS A BUSINESS WHAT IS THE LEAST AMOUNT WE CAN DO TO GET THE CHANGE WE WANT? WE COME FROM THESE TWO DIFFERENT POINTS OF VIEW. EVEN IF HUMAN BEINGS. IF YOU ARE TALKING OR ANYONE IS TALKING ABOUT FINANCIAL JUSTICE. WE TALK IN A METERED LANGUAGE. HOW DO WE CHANGE THAT PARADIGM OR WE CAN BE DRACONIAN WE CAN PLAY A HAMMER DOWN ONE OF THE HURDLES WE RUN INTO. SO WE DON'T RUN INTO FOR HUMANS. WITH NO PROBLEM SENDING HUMANS TO JEFF ARE EXTREMELY LARGE AMOUNTS OF TIME IN OUR COUNTRY. BUT WE CAN'T GO AFTER BEINGS, WE CAN'T DEAL WITH THESE COMPANIES? Rohit Chopra: IN SOME WAYS THE OBVIOUS POLITICAL POWER OF OUR MOST INFLUENTIAL AND WEALTHIEST CITIZENS AND FIRMS THAT ARE ABLE TO DISTORT THE JUSTICE SYSTEM IN THEIR FAVOR. I DON'T KNOW HOW TO SOLVE THAT ONE? BUT YOU ARE RIGHT. I THINK IT GOES TO WHAT I SAID ABOUT THOSE REGULATOR PRESS RELEASES. $1 BILLION IS A TREMENDOUS AMOUNT OF MONEY. BUT IS IT A TREMENDOUS AMOUNT OF MONEY FOR SOME OF THE LARGEST FIRMS ON THE PLANET? AND IS PICKING THAT FIND SOMETIMES A GAMBLE THAT IS WORTH TAKING? AGAIN, WHAT I GO BACK TO ITS 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 COURT AND DO YOU NEED AUTHORITY TO FUNDAMENTALLY FIX THE STRUCTURAL INCENTIVE AT LEAST UP TO DO THAT. I THINK THAT GOES TO EXECUTIVE COMPENSATION. IN TOWARD GOVERNMENTS.AND IT GOES TOWARD ESPECIALLY INDIVIDUAL LIABILITY. AND WE RECENTLY HAD A CHILDREN'S PRIVACY CASE. COMMISSIONER SLAUGHTER AND I SPOKE OUT ABOUT THE NEED FOR IN THESE CASES VERY SERIOUS MISCONDUCT.THIS IS A CASE INVOLVING ESSENTIALLY THE DISCLOSURE OF SAID DATA ABOUT YOUNG CHILDREN. THAT WAS AVAILABLE TO PEOPLE. AND THE COMPANY DECIDED TO LET IT GO ON. IT IS DEFINED TO THE COMPANY OR DO WE NEED TO SHARPEN OUR FOCUS ON THE ROLE OF INDIVIDUALS? AN INDIVIDUAL ACCOUNTABILITY UNTIL WE START DOING THAT. THAT IS NOT GOING TO REALLY CHANGE THE STRUCTURAL INCENTIVES. A COUPLE. I WAS ON A BOARD OF DIRECTORS IN THE UK. AND THE ONLY THING I LEARNED ON BEEN ON THE BOARD OF DIRECTORS WAS THE COMPANY'S, ARE FTC, TELLS YOU YOU ARE PRETTY PERMISSIVE AS TO WHAT YOU CAN DO EXCEPT FOR IF YOUR COMPANY BECOMES INSOLVENT. THE DIRECTORS ARE PERSONALLY LIABLE. AND WE HAVE TAKEN AWAY THE PERSONAL LIABILITY OF MANAGERS AND DIRECTORS THROUGH INSURANCE AND OTHER THINGS. YOU TALK ABOUT WELLS FARGO. THE CEO PAID 1 BILLION IN FINES LAST YEAR AND GOT A FIVE PERCENT RAISE. IS MAKING $8.5 MILLION. WHEN DO WE GET TO THE POINT WHEN CORPORATIONS DO BAD THINGS. THE OTHER ALTERNATIVE IS WHAT I HEARD A LOT DURING THE FINANCIAL CRISIS. WHY DIDN'T WE LOCK ANYBODY UP? DO WE HAVE THE ABILITY TO DO CRIMINAL PROSECUTIONS FOR CRIMES. WHETHER THEY BE AT THE CFPD OR FTC?Rohit Chopra: I AM NOT A CRIMINAL PROSECUTOR. BUT IF WE LOOK WHAT HAPPENED AT THE SAVINGS AND LOAN SCANDAL. A LOT OF PEOPLE WENT TO PRISON. AND THAT DIDN'T HAPPEN THIS LAST TIME. AND THAT IS ALSO SOMETHING THAT WILL THE POLICY TOOL KIT. THERE ARE CERTAIN THINGS THAT ARE SUBJECT TO CRIMINAL PENALTIES.AS A CIVIL AGENCY EVEN CIVIL LAW ENFORCEMENT THAT TARGETS INDIVIDUALS DOES SOMETHING. THAT IS AN IMPORTANT PIECE OF REALLY WHAT WE SHOULD BE DOING. I TELL YOU THE FTC WE NAME INDIVIDUALS A LOT. FOR SMALL SCAMMERS. BUT I AM NOT SO SURE WE SHOULD ASSUME THAT A LARGE FIRM SHOULDN'T NECESSARILY BE THE SAME LEVEL OF SCRUTINY. I DON'T KNOW THE ANSWER TO YOUR QUESTION. MY GET TELLS ME WE DID NOT IS A CRIMINAL AS VIGOROUSLY AS WE SHOULD BE. I WILL MAKE ANOTHER POINT. IF WE LOOK AT FARANOS, EVEN CORINTHIAN AND ITT.THOSE MAY BE KNOWN TO MANY OF YOU. THEY ARE LARGE PUBLICLY TRADED FIRMS THAT THE CFPD SINCE THEY ARE NOW DEFUNCT. THE LEADERSHIP OF THOSE FUNDS ENGAGED IN BILLIONS OF DOLLARS. WITH HARM TO SO MANY STUDENTS. THE ONLY PERSONAL ACCOUNTABILITY THEY FACE IS AN $80,000 FINE. WHAT KILLS ME IS YOU CAN DO -- YOU CAN TAKE ADVANTAGE AND LIE AND CHEAT CONSUMERS. HOW DARE YOU LIE TO AN INVESTOR. IF YOU'D LIKE TO AN INVESTOR YOU WILL BE PERSONALLY HELD ACCOUNTABLE FOR THAT OFFENSE. I THINK WE SOMETIMES NEED TO THINK ABOUT WHETHER MASSIVE FRAUD AGAINST CONSUMERS. DO WE HAVE THAT CALIBRATION RIGHT? Woman: WHAT WILL IT TAKE TO REGULATE GOOGLE. I WAS LISTENING TO THE HEARINGS ON C-SPAN AND I WAS STRUCK BY THE FACT THAT YOU WILL NOT GET DECENT LEGISLATION.IT SEEMED LIKE MANY OF THE MEMBERS OF CONGRESS NEED A TUTORIAL ON THE FIELDS TO BE ASKING THE RIGHT QUESTIONS EVEN. JUST TO GIVE YOU A SENSE. SIX OF THE 10 LARGEST CORPORATIONS BY MARKET CAPITALIZATION ARE EITHER AMERICAN OR CHINESE FIRMS. THIS IS A DRAMATIC CHANGE. MANY PEOPLE HERE MIGHT THINK ABOUT THE VALUATION OF LARGE FINANCIAL INSTITUTION. THESE FIRMS EQUIPS THEM BY FAR. I GUESS MY REACTION TO YOU IS I DON'T THINK YOU NEED TO BE A TECHNOLOGIST OR COMPUTER SCIENTIST TO KNOW HOW TO PUT INTO PLACE REGULATIONS FOR SOME OF THESE FIRMS. IT HAS TO BE ROOTED IN OUR VALUES IS WHAT WE THINK IS FAIR IN TERMS OF WHAT PROFESSOR McCOY ASKED ABOUT DISCRIMINATION. WHEN IT COMES ABOUT PRIVACY AND THE USE OF DATA. OBVIOUSLY WE WANT TO BE DRIVEN BY EVIDENCE.BUT ON BOTH SIDES OF THE AISLE PEOPLE ARE UNCOMFORTABLE. NOT JUST IN THEIR HEADS BUT THEIR HEARTS ABOUT SOME OF THE PRACTICES THAT THEY SEE ESPECIALLY WITH MASS DATA AGGREGATION ONLINE.AND HELP BLOCK THE MARKET ENTRANTS. AND THEY MONETIZE CONSUMERS. THAT LEADS TO REAL THREATS TO JOURNALISM INDUSTRY. TO OUR NATIONAL SECURITY. THAT DATA SECURITY ON THE DATA SECURITY. MANY OF OUR LARGEST DATA BREACHES. THESE ARE ASSETS THAT ARE BEING TARGETED BY FOREIGN STATE ACTORS. THEY KNOW THIS RICH SET OF ACTORS COLLECTED TO US HAS REAL VALUE. AND OF COURSE WE WANT LEGISLATORS TO BE SMART. I DON'T WANT ANYONE THINKING YOU HAVE TO BE A COMPUTER SCIENTIST OR TECHNOLOGIST TO ENGAGE IN THIS DEBATE. ALTHOUGH SHOULD BE ABLE TO ENGAGE IN THIS DEBATE NO MATTER HOW HARD WE PARTICIPATE IN THE ECONOMY. WE HAVE TIME FOR ONE QUESTION. A SHY GROUP THIS MORNING. I WANTED TO ASK ABOUT THESE SORTS OF SERVICES THAT CAN HELP CONSUMERS MANAGE THEIR CREDIT BETTER. CREDIT, IS A BIG EXAMPLE I CAN THINK ABOUT. ARE THESE HELPING CONSUMERS UNDERSTAND? I AM A USER AND THERE ARE SOME THINGS I HAVE LEARNED. OR ARE THEY DOING MORE HARM THAN GOOD BY COLLECTING A LOT OF THAT INFORMATION SUCH AS THEY OFFER FREE FILING. BUT THEN SAY THEY WILL USE THAT INFORMATION TO MARKET FINANCIAL SERVICES TO YOU? WHAT ARE YOUR THOUGHTS ON THINGS LIKE THAT? Rohit Chopra: I THINK IN THE NEXT FEW YEARS WE WILL HAVE TO SWITCH OUR DEFINITION OF THE WORD FREE. FREE, A LOT OF THINGS ARE OFFERED FOR FREE. BUT THEY ARE ACTUALLY A REAL EXCHANGE AND I WOULDN'T EVEN CALL IT A FAIR EXCHANGE. I WOULD SOMETIMES CALLING IT OFFERING SOMETHING FOR FREE BUT PICKPOCKETING SOMEONE AND SELLING WHAT YOU TOOK FROM THEM. BECAUSE IT IS NOT CLEAR AT ALL TO CONSUMERS WHAT IS BEING TAKEN FROM THEM. THE ABILITY TO FOR THIS TO GET MORE COMPLICATED. WE MAKE THE TRANSITION TO 5G. COMMUNICATIONS IN WAYS WE SEE ONLY FOR FIX. AND THAT WILL LEAD TO A HUGE BLOSSOMING OF AN INTERNET OF THINGS. MORE WEARABLE DEVICES AND CONNECTED CARS.OF THE AMOUNT OF INFORMATION THAT WILL BE AVAILABLE ON US. AUTOMOTIVE COMPANIES CAN COLLECT. THAT RETAILERS CAN COLLECT. IT WILL LEAD TO MORE PERSONALIZED PRICES WHICH RAISES A WHOLE OTHER SET OF ISSUES AND CONSUMER PROTECTION ISSUES. I AM VERY WORRIED THAT WE ARE NOT UP TO SPEED AS STATE AND FEDERAL REGULATORS ON THE IMPLICATIONS ON THIS FOR OURSELVES AND OUR SOCIETY. I DON'T KNOW WHAT THE ANSWER IS SPECIFICALLY TO THE SPECIFIC FIRMS. BUT IF WE DON'T CHANGE OUR THINKING ON THE WORD THINKING AND THINK IT WILL LEAD TO DELAYED ACTION. THAT IS A LITTLE OVERDUE. THANK YOU. PLEASE CHOOSE ME AND THANK NG ROHIT CHOPRA.