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Prepared Remarks of CFPB Deputy Director Steve Antonakes at the American Bankers Association Regulatory Compliance Conference

Thank you for the opportunity to speak with you today. I know that both those of us at the Bureau and those of you here today share common goals: a strong and vibrant financial sector, as well as a highly competitive economy that works for Americans in both the short run and the long run.

I also know there remains keen interest in the Consumer Financial Protection Bureau and our priorities. Today, I hope to continue to shed light on how we intend to regulate consumer financial markets. We believe our work benefits consumers. But we also believe it benefits the vast majority of financial services firms that operate within the confines of existing law. These firms should not have to compete against companies that engage in unlawful practices harmful to consumers.

By way of background, I am a career bank regulator. I cut my teeth during the end of the S&L Crisis as an entry-level bank examiner 24 years ago. I later served as then banking Commissioner Thomas Curry’s deputy for nine years before being appointed by successive governors to serve as the Massachusetts Commissioner of Banks from 2003 to 2010. Under this purview, I had a mandate to ensure compliance with safety and soundness, consumer protection, community reinvestment, and fair lending laws and regulations. I have supervised banks, credit unions, and nonbanks throughout my career. Moreover, I also had the responsibility of chartering new banks, licensing companies, and approving mergers after taking into consideration public convenience, advantage, and competition. Accordingly, I have a deep appreciation for how vital a healthy, competitive, and accessible financial services system is to our citizens and our businesses.

While the Bureau’s mandate focuses on consumer protection rather than on safety and soundness, we very much care about the health of financial institutions. As a veteran of two banking crises, I can tell you unequivocally that, in my view, consumer protection is not in conflict with safety and soundness.

Ultimately, both financial and consumer compliance performance are dependent upon strong management. Seldom do institutions excel in one and not the other. No business built on deceiving its customer base will be sustainable. Moreover, when businesses underinvest in compliance management systems it can pose significant reputational and financial risks.

For the compliance officers in attendance today, I am certain that this assertion comes as no surprise to you. I also understand that the often underappreciated role you play has arguably never been more complex and challenging. However, I submit that your opportunity for impact within your financial institutions has never been greater.

As you all know, reform stemming from the financial crisis resulted in the creation of the Consumer Financial Protection Bureau. Our mission, quite simply, is to make markets for consumer financial products and services work for Americans. We have no intention to impede or supplant the workings of the marketplace, which is the engine that drives the most successful economy in the history of the world. But sensible and evenhanded regulation and oversight is a positive foundation for functioning markets, just as effective law enforcement is the fundamental underpinning for civil order.

I would like to call your attention to our new web-based tool, eRegulations. Our goal for this tool is to make our regulations easier to navigate and understand. As a result of the positive and helpful input that we received from industry, consumer advocates, and even the tech community, we recently expanded our eRegulations tool to include not only Regulation E but also Regulation Z. In doing so, we are providing an intuitive, easy-to-navigate electronic version of the Bureau’s regulations implementing the Truth in Lending Act, which will make it easier to understand, use, and implement the recently adopted mortgage rules as well as many other requirements. This tool should also make life easier for you and your colleagues who are engaged in compliance work, so we encourage you to check it out and give us feedback.


Over the next several minutes, I will update you on various Bureau work and initiatives through the frame of five of our primary tools – rulemaking, consumer complaint response, supervision, enforcement, and consumer education. Together these tools should create a balanced approach that not only protects consumers, but fosters an environment which allows responsible companies to innovate and compete in the marketplace so consumers can have access to responsible credit.


Our first valuable tool we have to make consumer financial markets better for consumers is rulemaking. We are committed to a constructive, evidenced-based rulemaking process that will keep markets competitive and hold businesses accountable to reasonable and equal standards.

One of our largest tasks has been to draft rules to restore confidence and common sense to our mortgage market.

In the lead-up to the crisis, many mortgage businesses failed to conduct the very due diligence necessary to safely and prudently underwrite mortgages. Our mortgage origination work marks a return to traditional mortgage lending. Under our Ability to Repay (Qualified Mortgage) rule, lenders must now make a reasonable, good-faith determination that the consumer can actually afford the mortgage before they make the loan. Now, obviously, mortgage lenders do not have a crystal ball: they cannot predict if someone will lose a job or have an unexpected financial emergency. But they must look at a consumer’s income or assets, and at their debt, and must weigh them against the monthly payments over the long term. In other words, lenders must lend responsibly.

Our second back to basics regulation is in mortgage servicing. We recognize that servicers play a critical role in the mortgage market. Servicers collect and apply payments to loans. When necessary, they can work out modifications to the terms of a loan. And they handle the difficult foreclosure process.

In both our mortgage origination and servicing rules, we intentionally created important exemptions intended to reflect that community banks and credit unions typically did not engage in the type of activities that led to the mortgage crisis. The Ability to Repay rule has a small creditor category of qualified mortgages available to all institutions that hold less than $2 billion in assets and, with affiliates, extend 500 or fewer first-lien mortgage loans a year. Significant portions of the servicing rule exempt firms that, together with any affiliates, service 5,000 or fewer mortgage loans, all of which were originated or are owned by the servicer itself or its affiliates.

But we are focused on more than just the mortgage markets. In November, we published an advance notice of proposed rulemaking asking consumers for feedback about their experiences with debt collection and asking the industry for information about their practices. One in ten consumers has debts in collection. The best estimates are that 30 million Americans came out of the financial crisis with one or more debts in collection for amounts that now average $1,500 per person.

Collection of consumer debts serves an important role in the proper functioning of consumer credit markets. But certain debt collection practices have long been a source of frustration for many consumers, generating a heavy volume of consumer complaints at all levels of government. We want to ensure that consumers are treated fairly and that collectors are seeking to recover debts from the right person in the right amounts. We are particularly concerned that the accuracy of account information degrades as it is passed on from the original creditor to debt collection firms or debt buyers.

In addition to debt collection, we are actively assessing the need for further regulations in other markets for consumer financial products and services, including prepaid cards and payday loans. The Bureau has been gathering and analyzing significant information on these topics through white papers, research, formal requests for comment, and other outreach.


This leads me to our second vital tool: consumer response.

Since we opened our doors, our consumer response team has received over 375,000 complaints. Just last month we received more than 30,900 calls and handled more than 20,400 complaints. Debt collection is our largest source of these complaints. In fact, we receive approximately 6,400 debt collection complaints a month.

Mortgage complaint volume, however, remains high and averages around 4,300 complaints per month. Complaints are not only opportunities for us to assist specific people; they also make a difference by informing our work and helping us identify areas of concern, which then feed into our supervision and enforcement prioritization process.


Our third tool is supervision. The Bureau’s jurisdiction is unlike any traditional bank regulatory agency. We have supervisory authority over banks, thrifts, and credit unions with assets over $10 billion, as well as their affiliates. These institutions total less than 200 but on a combined basis account for $10 trillion in assets or nearly 80 percent of the nation’s banking market. In addition, the Bureau has supervisory authority over nonbank mortgage originators and servicers, payday lenders, and private student lenders of all sizes. Accordingly, the number of nonbank entities subject to the Bureau’s supervisory jurisdiction is in the thousands. We also supervise the larger participants of other markets as the Bureau defines by rule. To date this includes debt collectors, consumer reporting agencies, and student loan servicers. Over the next several months we expect to finalize a rule to define larger participants in foreign money transmission and to propose a rule doing so for auto finance.

Through our supervisory tool, our examiners conduct on-site and off-site examinations, which include review of entities’ compliance management systems transaction testing of account files, and interviews of relevant personnel. As findings warrant, our examination reports and supervisory letters include appropriate corrective action.

Our examinations are intended to be rigorous and heavy on data analysis, with the important goal of also being fair and reasonable.

Our specific charge of attempting to level the playing field between banks and nonbank entities provides us with the opportunity to oversee consumer financial product and service providers across charters and business models. Consequently, charter or license type is less relevant in determining how we prioritize and schedule our examinations.

From the outset, our approach to prioritizing supervision activities has encompassed an assessment of potential consumer risk, as well as a number of qualitative and quantitative factors. These factors include: the size of a product market; the supervised entity’s market share; the potential for consumer harm related to a particular market; and field and market intelligence that encompasses a range of issues including, but not limited to, the quality of a regulated entity’s management, the existence of other regulatory actions, default rates, and consumer complaints.

We know that the institutions we examine need to expend resources when being examined – employees are diverted to work with our examiners and provide necessary information and access. For that reason, we strive to conduct our examinations with an eye towards minimizing burden. Accordingly, we have made it a top priority to coordinate our examination activities with our federal and state regulatory partners. This coordination is essential to the success of our supervisory tool.

We recently published our 4th edition of Supervisory Highlights. We view this report’s primary audience as industry and more specifically the compliance community. It is the Bureau’s effort to signal significant issues that we are identifying through our confidential supervisory process allowing you to focus on potential areas of concern and test your existing controls and processes.

This particular volume represented a deep dive on certain nonbank supervisory efforts. The report described systemic flaws that our examiners found in the compliance management systems of many payday lenders, debt collectors, and consumer reporting agencies. These problems can pose broad risks to the companies’ customers, including engaging in unfair or deceptive practices in violation of the Dodd-Frank Act.

The report also described legal violations examiners found in these industries. For example, our examiners identified multiple instances in which payday lenders threatened to take legal actions they did not actually intend to pursue. Other payday lenders threatened to impose additional fees or to debit borrowers’ accounts at any time, when this was not allowed by their contracts. Examiners also found a payday lender that called borrowers multiple times a day or misled borrowers about non-existent promotions to induce them to call back about their debt. Other payday lenders visited borrower workplaces in an attempt to collect debt even after borrowers had asked them to stop.

We also noted lax controls over third party collectors contracted by payday lenders. As a result, payday lenders did not take steps to prevent these collectors from misleading borrowers by falsely presenting themselves as attorneys or making false threats of criminal prosecution.

However examiners found that debt collectors that were not employed by payday lenders also violated the Fair Debt Collection Practices Act (FDCPA). For example, some did file lawsuits, which implied that they intended to prove their claims, when they had no such plans. Examiners found that one debt collector had made approximately 17,000 calls to consumers outside of the appropriate times established by the FDCPA. That company further violated the law by repeatedly contacting more than 1,000 consumers as often as 20 times within two days.

The Bureau also discovered problems at consumer reporting agencies. Our examiners found that certain agencies were not properly handling consumer credit report dispute documents. Consumer reporting agencies are generally required to forward relevant dispute documents to data furnishers. Examiners also found that some agencies were encouraging consumers to file disputes online or by telephone, but then refused to accept such disputes from consumers unless they had recently received a report from the CRA, suggesting to consumers that they needed to obtain a current report – often for a fee – in order to file a dispute.


Our enforcement tool allows us to hold accountable those players that are violating federal consumer financial protection laws. We do this by working with our examination teams, and listening to and analyzing consumer complaints, industry whistleblower tips, and information from federal and state government agencies, industry, and consumer groups. If we find violations, we have enforcement authorities that include both administrative proceedings and court litigation.

We have the ability to touch a wide variety of markets with our enforcement authorities, such as: student loans, auto loans, payday lending, debt collection, debt relief and credit counseling, electronic fund transfers, and consumer reporting. We have already ordered the return of more than $1 billion to consumers and mandated another $2 billion in foreclosure relief.


Finally, I’ll discuss consumer education. We believe consumers should have the information they need in order to ask the right questions to make the best decisions for themselves and their families. Ideally, this positions consumers to avoid problems in the first place.

The Bureau’s consumer education agenda is focused on providing consumers with tools and information to develop practical skills and support sound financial decision making. These include tailored approaches to address financial decision-making circumstances for specific populations, including: servicemembers and veterans; students and young adults; older Americans, and those who are the most economically vulnerable. We are also working on assisting people at certain stages when they are making big financial decisions, such as paying for college, buying a home, or preparing for retirement.

It is important to note that all five of these tools are informed and aided by the Bureau’s commitment to data-driven policy analysis. In this way, our important research and markets teams, housed in our Research, Markets, and Regulations Division, bring together rigorous quantitative expertise and market insight. They inform all the work we do. This ensures that our judgments are fact-based, pragmatic, and deliberative. The output of this team includes white papers, research reports, and other studies, and it allows us to build a shared set of facts.


In the lead-up to the financial crisis, too many consumers were stepping up to the plate already down in the count. It is our objective to run a constructive and open process that gives everyone a chance to weigh in, and we are committed to that goal. We want business leaders to be involved. We want and need your insights. And it is in both our interests to work together to have clear rules of the road and to free companies from competing against predatory firms. Let us work together to improve people’s financial lives and do our part to help fashion a more resilient economy and a stronger country.

At the Bureau, we envision a consumer financial marketplace where reasonable and evenhanded oversight promotes real innovation, where consumer protections and business opportunities complement one another, and where financial institutions lead by establishing long-term relationships with their customers. Thank you.

The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visit