The hearing will come to order. I apologize for the

delay. This has been a somewhat busier week...

If I could take a second, it's to express agreement

with him. That's why I did stress both civil...

The gentleman from Virginia, who is the chair of the

subcommittee on the Judiciary Committee.

I thank the gentleman.

The gentleman from California, Mr. Campbell, will be giving an

opening...

The comptroller of the currency, John Dugan.

Next we have Commissioner Elisse Walter, a new

commissioner, relatively, of the Securities and...

Next, Martin Gruenberg, who's the vice chair of the

Federal Deposit Insurance Corporation.

And next, the acting director of the Office of

Thrift Supervision, Mr. Scott Polakoff, to whom...

So welcome back. Mr. Polakoff. Please.

Thank you, Mr. Polakoff. Those last two points are

very much what we are hoping to -- (inaudible).

Next,...

Thank you, General.

Next, Mr. John Pistole, who's the deputy director of the FBI.

Let me begin with Mr. Polakoff.

On page 17, roman numeral V, "Closing the Regulatory Gaps,"...

So you think we need uniform federal mortgage

regulations for the non-banks? I mean, I assume...

Well, in those cases where you think the states may

not have enough, would you authorize federal...

Would that be -- well, that's an interesting

approach -- triggered by the state's request, or...

I'm not sure what I know -- mean -- know what it --

And you would say to do the same with the OTS? Is

that the --

All right. And then I also appreciate your very

specific requests about cease-and-desist power...

But on the other hand, I don't pronounce anything

that well, so you shouldn't feel singled out.

The -- obviously, the complaint, accusation,

explanation -- depending on it -- has been that...

Thank you.

The gentleman from California, who has graciously waived his

opening statement...

Well, let me -- I would say to the gentleman, as

chairman of the committee, I never mind members'...

No, no.

Congressman, I would offer only one example, and

it's not a gap. It's possibly an overlap, but...

Thank you.

In the securities arena, there are gaps in the SEC's

authority with respect to certain types...

What I was going to mention from the Department's

perspective is that we work with each of these...

I would just highlight and amplify what Director

Polakoff said earlier about having a common...

I would really echo what Comptroller Dugan said and

point out that this was the focus of the...

Thank you very much. I'll recognize

myself for five minutes.

In my work on the foreclosure...

Well, let me just ask you: If the Federal Loan

Modification Company is advertising that for...

Do we need to regulate this whole servicer

industry? It has become very important. We have servicers...

All right.

I have another little question I want to ask. It may not seem so

big or important....

Yes, ma'am.

The Federal Reserve has regulations out for comment right now

that would govern...

Yes, ma'am.

Congresswoman, from an OTS perspective, I can only

speak from early 2007, when Countrywide converted...

Before it became a thrift, Countrywide had a national

bank and also had a holding company that...

Madame Chair?

If there are others that want to respond, I'd love to

hear --

(Off mike) -- question.

I'll take the first stab at it. What all of

the banking regulators have the ability to stop...

Thank you, Mr. Chairman. I'm pleased you came

back just to hear me. Thank you.

I am curious...

Oh, you think there might have been some?

Well, I agree with the transparency.

But I'm asking specifically, who really should...

Well, that's pretty specific.

Could you maybe get just a little more specific?

And you're talking specifically about which market

regulator?

No, no, but what entity, when you say it requires

a market regulator --

Okay. All right. That's what I was trying to get

to. Thank you.

Anybody else? Governor?

Do you think -- do you think that would -- these

things that you both mentioned would be enough...

Okay. So we don't need more --

Okay. Well, let me ask a quick question -- my

time is running out -- regarding the FBI. Mr....

Because I haven't heard that from the field yet.

I hear of people still having to retire.

Okay. I see my time's expired. Thank you.

Thank you. Thank you, Mr. Chairman.

I wanted to follow through -- follow up on that last question...

Is that a jurisdictional issue, that you don't have

to prove mail, you can just prove a financial...

If the gentleman will yield, very few of them

operate wholly intrastate.

I don't know of any company that does its business

only intrastate.

In your comments, you mentioned restitution

involving the Iraq contracting.

At...

Well, if you could get back to me on the details?

And finally, for, I guess, you and Mr. Pistole, how

many accountants would you need to effectively...

Has the department submitted a potential budget so

we know -- if we wanted to deal with it,...

Okay. Well, Mr. Chairman, I think he said 59. The

order of magnitude he was suggesting was that...

Thank you very much, Mr. Chairman.

I have a lot more questions than we have time to have answered

here...

Thank you, Mr. Chairman. I was going to ask for

your permission to do that. Thank you, Mr. Chairman.

The...

Thank you, Mr. Chairman.

Mr. Pistole, in your written testimony, you discuss the rise in

mortgage...

I would appreciate that, sir.

Absolutely.

Well, that would be very helpful, because I think

every member of this committee want -- would...

Thank you.

And Ms. Glavin, as a former -- I was a district attorney for 12

years in my...

Thank you, Ms. Glavin. I truly, truly believe that

every member of this committee, Republicans...

Thank you, Mr. Chairman.

I thank the witnesses for appearing today, and I also thank my

colleagues...

A follow-up question quickly. My time is limited.

I'm sorry.

If this is true, is there some agency that these

products are required to be registered with?...

And just for my edification, does everyone agree

with the commentary accorded -- just presented?...

Are you of the opinion that they should be criminal

as well as civil, the penalties or sanctions?

Mr. --

Well, my concern is, these products, they embrace so

many people and so many lives. If we --...

Yes. Governor Duke, my first question,

do you think that detection of fraudulent mortgage originators...

Yeah. Well, I was just wondering, you know, if the

only kind of mortgages that were allowed...

Okay. Is there anyone else that can make a comment

on that?

Okay. Let's see, Comptroller Dugan, I guess this

question is for.

How...

Oh, yeah.

I was just wondering how comprehensive the list of banned

individuals is. Is...

Okay.

Is it easy for consumers to sort of get at it and be aware that

Okay.

And then the last question I had, I guess, is to everyone. And

it will probably...

Thank you, Madame

Chairwoman.

I appreciate first of all all the witnesses for joining...

Thank you, sir.

Secondly, Mr. Dugan, Mr. Gruenberg and Ms. Dugan (sic), would you

please...

Sure.

(Off mike) -- Congressman, I should mention the

-- pursuant to a directive from -- from the...

Thank you very much.

Mr. Gohmert had a request.

Yes, sir.

All right.

Thank you.

Mr. Posey, I think you had an additional question you wanted to

ask.

Did the gentleman from Virginia want to ask some

questions?

I thank the panel. It has been useful, and I must

say I thought the questions asked by my colleague...

(Off mike.)

Thank you, Mr. Chairman.

Chairman Frank and members of the committee, I am pleased to have

this...

Mr. Chairman and members of the committee, Mr.

Chairman and members of the committee, thank...

Thank you for that.

Chairman Frank and distinguished members of the committee, my

name...

Chairman Frank, members of the Judiciary Committee and

members of the committee, I'm Jim Ropp,...

I didn't -- I'm sorry, I didn't turn it on, sir.

I appreciate this opportunity to focus on the role of

state securities regulators in the current...

Good afternoon, Chairman Frank and distinguished

members of the committee. My name is Merle...

Well, I think we'll see that in future reports

particularly, but the change that's happened...

They have -- I think have more controls in place.

Well, I'm not sure. I think what I would recommend

is more due diligence. Tightening underwriting...

By everybody that's involved as far as the lender

in the lending transaction.

I think that's something that could be looked at

and considered. We'd be happy to talk with...

We appreciate it.

Thank you, Mr. Chairman.

And thank you all for being here today. Sorry. I try to avoid

saying,...

Thank you.

And I'm a big proponent of state's rights. I hate to see more

and more state's...

But, now as I understand it, one of the problems

with the credit default swaps was we didn't...

And I know you want the federal government to run

it all, but -- (laughter) -- maybe you could...

And my time is running out, and I really

appreciate what you're doing. I'm just looking for...

-- submit in writing any suggestions you might

have as to how we can do it more effectively....

If I could just explain my question, though.

People at the state level often pick up on these...

Thank you very much, Mr. Chairman.

And I'm very appreciative for this hearing, but I'm very

appreciative...

You know, we have to decide whether or not we're

going to essentially fight a preemption battle...

I don't know the answer to that question. We can

find out.

Not on this panel. (Laughter.)

Tax return fraud is accomplished by altering

documents in some way and altering the information....

I'm not sure I'm good at math questions, but I will

tell you that my division, the securities...

As I mentioned, you know, our legal team that dealt

with Countrywide -- six lawyers -- I don't...

Potentially. And we would love it if you could

help us do that. (Scattered laughter.)

I do want to add -- yes, Mr. Ropp, go quickly.

I'm just going to -- because Mr. Ropp, you did say

that you could use some help with the funding....