Ask longtime regulator Steven Antonakes what qualities he looks for when hiring an examiner, and his description sounds a lot like the man himself.
The associate director for supervision, enforcement and fair lending at the Consumer Financial Protection Bureau and a former commissioner for the Massachusetts Division of Banks, Antonakes, 44, estimates that he has conducted more than 2,500 examiner interviews over the course of his 22-year career.
"You need someone, obviously, with strong analytical skills and good communication skills. You want someone who is fair at the end of the day," Antonakes said in an interview in his office. "I don't want someone who is going to go in with a preconceived notion, and who's not going to pay attention to the information that's in front of them.
"There are times when there are disagreements, and it's incumbent upon the examiner to always keep cool and just present the information. It's never personal," he added.
Those who have worked with him, both at the CFPB and in Massachusetts, describe a similar person: analytical, calm and unbiased.
"He really is a consummate regulator—and coming from my world that's a flattering thing," says John Ryan, president and chief executive of the Conference of State Bank Supervisors. "He approaches things in a fact-based, fair manner," Ryan adds. "There's a slow, careful build to Steve in certain assessments."
Others describe a reserved but focused leader. "Steve is a man of few words, but when he speaks, his words are deeply powerful," says Catherine West, who served as associate director and chief operating officer at the CFPB during its infancy, and now works as a managing director at consultancy Promontory Financial.
"He sits back in a meeting and really thinks about things, and he focuses on the central issue," says West. "He's not the guy playing on his BlackBerry or leafing through pages."
Critically, Antonakes' balanced approach—and what he calls a focus on "substantive consumer harm versus ticky-tack, technical compliance issues"—could prove advantageous for an agency repeatedly accused of having a political agenda. Lenders have bristled at CFPB oversight since the bureau's inception, warning that its powers under director Richard Cordray are unfettered and that new, tougher rules would do more harm than good.
As such, Antonakes' appointment may provide some comfort for an industry facing a host of new compliance challenges. Industry veterans who know him say Antonakes is driven to set rules that help the industry run better, not bog it down.
"He's not a regulator for regulation's sake. He wants to have a set of predictable rules that allow banks to operate in safe and sound manner," says Richard Schaberg, a partner at Hogan Lovells, who represented a number of state chartered banks in front of Antonakes. "He's not for having an apparatus over financial institutions because he thinks they need baby-sitting."
His experiences in Massachusetts, including overseeing more than 200 state-chartered banks and credit unions and 4,500 nonbank financial institutions, may also help guide the bureau as it ramps up supervision of the mortgage industry, including nonbank mortgage lenders and servicers. The agency is also working on a slew of rules, including standards for mortgage servicing and regarding a borrower's ability to repay a mortgage.
"Supervision of nonbank mortgage lenders and servicers is a top priority. Before the creation of the bureau, a significant part of the mortgage market was not subject to federal supervision," Antonakes says. "We are working closely with state regulators in an effort to ensure a level playing field in the nonbank mortgage industry and to closely coordinate our supervisory work."
He notes that as the industry evolves, the bureau will have to stay nimble to address the latest challenges, rather than focus on problems of the past.
"You need to have a supervisory approach that is flexible and adapts to changes in the marketplace in real time so you don't waste resources chasing yesterday's problem," he says. "For example, state legislatures were still tackling predatory lending practices in the refinance market just as new challenges in the purchase money market were coming to the forefront in the form of new high-risk mortgage products."