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Prepared Remarks of CFPB Deputy Director Steve Antonakes at the Consumer Advisory Board Meeting

I would like to thank Dr. Maria Sheehan, President of Truckee Meadows Community College for having us here today. And thank you all for coming to this meeting of our Consumer Advisory Board here in the “Biggest Little City in the World.” The Consumer Advisory Board offers us valuable insights and expertise which help us improve how consumer financial markets work for the American people.

Since we began holding CAB meetings, we have been committed to transparency. We have provided the public with information like membership data, meeting summaries, and meeting notices. Today, we are taking that one step further and fully opening these meetings to the public. So I would like to especially welcome those members of the public joining us in person today or watching online.

Today’s sessions focus on one of the most critical issues that the Consumer Bureau has tackled thus far, and an issue that I know is of great significance to the residents of Nevada – the mortgage market. Nevada was amongst the hardest hit by the housing market collapse and has had one of the highest foreclosure rates in the country. People saw their home values plummet, their retirement savings diminish, and their confidence shaken.

Nearly eight years have passed since real estate values plummeted and foreclosures soared. While we have worked diligently at the Bureau to improve the mortgage market and imbed necessary consumer protections, we know that our work is far from over. Topping $10 trillion, this market is intricately tied to our economic stability and well-being. The credit crunch, the financial collapse, and the ensuing deep recession will likely stand as the most significant financial events of our generation.

Central to our mission at the Consumer Bureau is promoting marketplace stability. We want to help ensure that such a crisis will never repeat itself. So last January, we implemented new rules to improve the functioning of the mortgage market. We took a “back-to-basics” approach founded on three main tenets. No debt traps. No surprises. No runarounds. Our rules prevent creditors from extending loans to consumers who lack the ability to repay them, require new disclosures, and mandate better customer service.

It is in the long-term interests of responsible providers and our broader economy that consumers should be set up for success rather than failure. So under our rule, lenders must make a reasonable determination in good faith that for the mortgages they offer, consumers can actually afford to pay them back. 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.

This basically marks a return to solid mortgage underwriting. And mortgage servicers must be responsive and work with struggling borrowers to access the available alternatives to foreclosure, since those alternatives often lead to better outcomes for the mortgage holders as well. If a consumer takes out a mortgage, our rules require servicers to keep the consumer informed about their loan and to investigate and fix errors which are brought to their attention. These concepts are fairly simple and should help prevent needless foreclosures. And that is best for borrowers, lenders, and our entire economy.

In fact, just yesterday we announced an enforcement action against SunTrust. The action will provide at least $500 million in relief to underwater homeowners as well as $40 million to consumers who lost their homes to foreclosure. We are holding SunTrust accountable for years of illegal misconduct, but our action does not release SunTrust from liability for any violations of our new rules. We will be vigilant about overseeing and enforcing the law across the entire marketplace because we need to ensure that American homeowners are treated with the respect, dignity, and fairness they deserve.

Our goal, however, is not some one-sided aim to maximize consumer protection or industry deterrence at all costs. There is such a thing as doing too little, and there is such a thing as doing too much. We are seeking an appropriate balance where incentives for homeowners, creditors, and servicers are aligned.

In November, we took further action to improve the mortgage experience for consumers. We finalized a rule requiring easier-to-use mortgage disclosure forms that clearly lay out the terms of the mortgage for a homebuyer. The new “Know Before You Owe” mortgage forms will replace the existing federal disclosures and help consumers understand their options, choose the deal that is best for them, and avoid costly surprises at the closing table. We want to give greater control to consumers, so they can take charge of the decisions they are about to make and take a more active role in their closings.

In fact, all of our mortgage rules are designed to empower consumers and promote responsible lending. Most of those rules have now been in effect for five months. We conducted extensive industry outreach to help smooth implementation and have already trained more than 4,500 housing counselors on the servicing rules. We are moving forward in our goal of seeing a marketplace where consumer protections and business opportunities complement one another.

We want to know what you are seeing. With six months behind us, what are the trends you see? What kind of impact have the rules had on the market? This type of insight is invaluable. The CAB is designed to bring us input from those who work in these markets and on-the-ground with consumers. We use that feedback to inform our policymaking and to evaluate the effectiveness of our rules and also to consider its implications for the Bureau’s other programs. I look forward to discussing what you are observing in the mortgage markets today. 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