Earlier this week CFPB Director Richard Cordray addressed the Consumer Bankers Association annual conference in Phoenix. In his prepared remarks he reminisced about the evolution of supervision and enforcement of the banking industry over the last four years. He also addressed criticisms head-on, including the complaint database, rulemaking through enforcement, and the repeated industry argument that increased regulation will lead to negative consequences for consumers.

“Many of your comments over the years have raised the bar for our efforts, and we have been quite open to iterating our processes accordingly. As a result, our supervision tool has now grown into a rigorous, data-driven program based on sound analytics. Our processes have become more thoughtful, more complete, more consistent, more transparent, and more prompt. Our dialogue with CBA and others has materially assisted these objectives.

Another important way that our sometimes pointed discussions have helped refine our work is in the area of publication of information. Certainly the CBA has never been a fan of our public consumer complaint database. Some of your feedback has led to adjustments, as you know. Others have not, but we are always listening. Despite all of that lively debate back and forth, your member institutions have very much caught the spirit of the whole enterprise. Companies have come to realize that if they are going to make sure they are treating their customers fairly, it is not enough to rely solely on their own subjective impressions. Instead, they have to listen closely to what consumers are telling them, think carefully about what they are hearing, and act accordingly.”

Indeed, it would be “compliance malpractice” for executives not to take careful bearings from the contents of these orders about how to comply with the law and treat consumers fairly.

“Likewise, our public enforcement actions have been marked by orders, whether entered by our agency or by a court, which specify the facts and the resulting legal conclusions. These orders provide detailed guidance for compliance officers across the marketplace about how they should regard similar practices at their own institutions. If the same problems exist in their day-to-day operations, they should look closely at their processes and clean up whatever is not being handled appropriately. Indeed, it would be “compliance malpractice” for executives not to take careful bearings from the contents of these orders about how to comply with the law and treat consumers fairly.

Some have criticized this approach as regulation by enforcement, but I think that criticism is badly misplaced. Certainly any responsible official or agency charged with enforcing the law is bound to recognize that they should develop a thoughtful strategy for how to deploy their limited resources most efficiently to protect the public. That means working toward a pattern of actions that conveys an intelligible direction to the marketplace, so as to create deterrence that can be readily understood and implemented. The alternative is just a random series of actions that takes a few wild swipes at the bad actors without systematically cleaning up the practices that harm consumers across the marketplace.

Others have framed this criticism as a suggestion that law enforcement officials should think through and explicitly articulate rules for every eventuality before taking any enforcement actions at all. But that aspiration would lead to paralysis because it simply sets the bar too high. Particularly in an area like consumer financial protection, the vast majority of our enforcement actions involve some sort of deception or fraud. And courts have long noted that trying to craft specific rules to root out fraud or untruth is a hopeless endeavor, as they would likely fail to cabin “the ingenuity of the dishonest schemer.”  For these reasons, we strive to present specific enforcement orders that meticulously catalogue the facts we have found in our very thorough investigations and set out the legal conclusions that follow from those facts. These specific orders are also intended as guides to all participants in the marketplace to avoid similar violations and make an immediate effort to correct any such improper practices.

So yes, we are pushing you – hard – to become more consumer-focused and consumer-friendly institutions. And when you push back, we welcome your input. We welcome it because we realize that your input can make us a better and more effective agency. Indeed, that is exactly what everyone should want us to be, in order to improve the financial marketplace for all responsible businesses as well as for consumers.”

Cordray also addressed the often-used industry argument that more regulation will lead to less credit – or more expensive credit – for the consumers he is trying to protect.

“…At the same time, we found that credit is now cheaper and more available and the business remains attractive and profitable. In total, consumers had access to nearly $3.5 trillion in credit as of early 2015 – an increase of nearly $325 billion since early 2012. And new account openings are growing, with more than 100 million credit card accounts opened in 2014 – faster than the growth in the population. This is a sign of a healthy market – where credit card companies are making the decision to extend credit to responsible customers – and it is being reinforced by unusually low consumer credit card defaults.”

He also gives credit for these improvements to financial providers doing more than they “had to” with customer service, and to consumers themselves for modifying their behavior. “Thus,” he says, “we have the trifecta of progress noted earlier – a better regulated market, better institutional behavior, and better consumer performance.”

He then turned to other topics, continuing to lay the case for the fact that increased regulation has led to good, rather than bad, results for consumers. Including – the market for mortgage lending:

“…What has the effect of these rules been so far?  Some predicted that lending would be suffocated by the common-sense rules that we finalized in January 2013. On the contrary, the mortgage market is thriving. In 2014, the number of home purchase mortgages was up by almost 5 percent over the prior year, and preliminary data indicates that this trend accelerated last year. When our Know Before You Owe mortgage disclosure rule took effect in October, some again asserted that its implementation would paralyze the market. We are keeping a close eye on many transitional issues that lenders and others have faced in the past five months, but home purchase mortgages remain on the rise, and the housing market now is finally making a positive contribution to the ongoing recovery of the American economy.

…And while we saw minor consolidation in some parts of the mortgage market, there is no evidence of any mass exodus, as doomsayers had predicted. In fact, after adjusting for merger activity, the latest data indicates that the number of lenders originating mortgages has been increasing.

…Reasonable regulation of financial markets, which includes evenhanded oversight and enforcement of the law, should always tend to benefit the most responsible providers.”

He moved next to what’s ahead, and said the CFPB’s rulemaking agenda will remain active. He briefly mentions debt collection, but makes no specific reference to timing, appearing to suggest that other topics are first in line.

“Soon we will be finalizing a rule to provide basic consumer protections for prepaid accounts for the first time ever… In the coming months, we will issue our notice of proposed rulemaking on small-dollar loans such as payday loans, car title loans, and certain installment loans. We will also issue a notice of proposed rulemaking on the use of arbitration clauses in consumer finance contracts, advancing a process that Congress first set in motion in the Dodd-Frank Act.

We are also looking at the incidence and transparency of overdraft fees, including the opt-in process for overdraft coverage of electronic transactions…

Another focus is on debt collection practices – still the most-complained-about activity affecting consumers in the financial marketplace – including the practices of third-party debt collectors, first-party creditors, debt sellers, and debt buyers.

And we have begun work on another project required by Congress, which is to establish a rule governing the collection and publication of data on small business lending – as well as determining how to organize and manage that data collection and publication. We are moving forward with this project now that we have completed our statutory task to update the framework for collecting similar data on mortgage lending under the Home Mortgage Disclosure Act.”

Finally, Cordray talked about financial education. He mentioned several of the bureau’s initiatives in this arena – specifically with young people, at the workplace, and with older Americans — and encouraged bankers to feel the responsibility to take this on as well.