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Media Release

Conference of State Bank Supervisors
        1129 20th Street, NW, 9th 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

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