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MEDIA RELEASE / March 27, 2007
Conference of State Bank
Supervisors
1155 Connecticut Avenue,
NW, 5th Floor, Washington, DC
20036
States Firmly Committed To Supervisory Oversight of Mortgage
Lending, CSBS Tells House Subcommittee
WASHINGTON,
D.C., March 27, 2007
– In testimony today before the House Financial Services
Subcommittee on Financial Institutions and Consumer Credit,
Massachusetts Commissioner of Banks Steven L. Antonakes said state
regulators have actively pursued unfair and deceptive practices in the
mortgage market.
However, he said, most state actions have not received much media
coverage, contributing to the perception that the industry is largely
unregulated.
“In 2006 alone, states took 3,694 enforcement actions against
mortgage lenders and brokers based on problems found during routine
examinations of mortgage companies,” Antonakes said. He added that
through three nationwide settlements alone, state regulators have
returned over $800 million to borrowers.
Antonakes appeared on behalf of the Conference of State Bank Supervisors (CSBS),
alongside federal banking regulators at Tuesday’s hearing on how
agencies regulate subprime mortgages as well brokers who engage in real
estate lending that may be categorized as predatory.
Antonakes described several initiatives currently under way to
further improve state supervision of the mortgage industry:
- a national mortgage
licensing system and database that will feature single records for every
state-licensed mortgage company, branch and individual loan
originators;
- issuance of
guidance on nontraditional mortgage products to parallel federal
guidance setting forth sound underwriting standards and consumer
protection provisions;
- expected state
regulatory adoption of a proposal currently under consideration by
federal financial regulators dealing with subprime mortgage lending;
“For example, CSBS would like to work with our federal
counterparts to encourage our supervised entities to reach out to those
consumers whose adjustable-rate mortgages are scheduled to reset this
year,” he suggested.
Antonakes added that state regulators are frustrated in their efforts
to protect consumers by federal preemption of state consumer protection
laws.
“State legislatures have the right to expect the laws they pass
to be followed by companies operating in their state,” he said,
adding that 37 states have acted by passing predatory lending laws only
to have them voided by OCC and OTS rulings.
Antonakes, who holds the state regulators’ seat on the Federal
Financial Institutions Examination Council (FFIEC), recommended better
coordination among states and between state and federal regulators as a
way to improve accountability for mortgage brokers and lenders and
provide consistency across the industry to the benefit of the
borrower.
“We recognize that there are regulatory weaknesses in our
current system of both state and federal supervision. It is important
that we debate and discuss these weaknesses. However, we need to move
toward finding common solutions,” he said.
His testimony may be found at http://www.house.gov/apps/list/hearing/financialsvcs_dem/ht032707.shtml
<http://www.house.gov/apps/list/hearing/financialsvcs_dem/ht032707.shtml>
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The Conference of State Bank
Supervisors is the nationwide regulatory organization
for state banking, representing the bank regulators of the 50 states,
the District of Columbia, Guam, Puerto
Rico and the Virgin Islands. The CSBS
is responsible for defending state authority to determine banking
structure and the products and services state-chartered institutions can
offer and for improving the quality of state bank supervision by
providing department performance evaluation and accreditation programs
and supervisory education/training programs for state banking department
personnel.
Information Contact: Mary
White, Vice President, Communications, CSBS,
mwhite@csbs.org <mailto:mwhite@csbs.org> or
(202) 728-5715.
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