Banking chief to join US consumer bureau
Massachusetts banking Commissioner Steven Antonakes was tapped yesterday to hold one of the most powerful posts in the new consumer watchdog agency created by Congress in response to the financial crisis.
In his new job at the Consumer Financial Protection Bureau, Antonakes will head the team that will monitor how the nation’s largest banks market and sell consumer products such as credit cards, checking accounts, and home loans to ensure they do not mislead or exploit consumers.
“This represents an exciting opportunity to build an agency from the ground up,’’ Antonakes said in an interview yesterday.
The state Division of Banks named David J. Cotney, the number two official at the agency, to serve as acting commissioner while the Patrick administration searches for a permanent replacement.
The Protection Bureau was created by Congress as part of the massive financial overhaul legislation it passed last summer. It is being set up by Elizabeth Warren, the Harvard Law School professor who promoted the idea of a consumer watchdog to the Obama administration and now serves as an assistant to the president.
Congress established the agency to address concerns that banking regulators were too narrowly focused on “safety and soundness’’ issues — making sure financial institutions were healthy — and therefore unable to stop lenders from abusive practices, such as providing loans that borrowers could not afford to repay, or extending credit to consumers already deeply in debt.
Antonakes’s new responsibility will be to stop such abuses and make sure banks are providing consumers with products that are appropriate for their financial condition. In a statement yesterday, Warren said Antonakes would play a critical role in building an agency “that will level the playing field between bank and nonbank lenders.’’
“He’s been a good advocate for the consumer,’’ Deirdre Cummings, legislative director for Massachusetts Public Interest Research Group, said of Antonakes. She said the commissioner cracked down on payday lenders and other so-called predatory lenders that target the poor, pushed banks to disclose more information about fees, and was open to other actions proposed by consumer activists.
“We will be well served by someone like Steve working to protect their interest,’’ Cummings added.
Separately, Bloomberg News reported yesterday that Warren has also tapped David Silberman of the Boston-based Kessler Group to run the new unit at the bureau that will research and write rules for credit cards.
Silberman is a graduate of Brandeis University and Harvard Law, according to Kessler, which helps companies with partnership programs such as affinity marketing campaigns.
Antonakes, 42, has been head of the Massachusetts banking office for seven years. It oversees 240 state-chartered banks and credit unions and thousands of mortgage offices and other financial entities.
During his tenure only one bank in Massachusetts failed — Butler Bank, a Lowell community bank, in April.
Some within the industry credit Antonakes for being early to confront problems tied to the wave of foreclosures that has swept the housing market.
“He was working on foreclosure prevention before most regulators could even spell the word foreclosure,’’ said Kevin Cuff, executive director of the Massachusetts Mortgage Bankers Association.
However, Antonakes has not been immune from criticism.
A study by Boston University’s New England Center For Investigative Reporting, published in the Globe last year, said Massachusetts banking officials were less likely than other state regulators to take serious disciplinary action against mortgage brokers and lenders.
Antonakes declined to comment.
But at the time, Cotney, his deputy, argued the statistics were skewed because other states were more likely to impose punitive measures for minor infractions.
Antonakes received a bachelor’s degree from Tufts University and earned graduate degrees from Harvard University’s John F. Kennedy School of Government and Boston University.
Todd Wallack can be reached at email@example.com.