Banking selection highlights issues
> On the same day that New Hampshire residents by the tens of thousands went to the polls to cast votes in support of one candidate’s message about a broken economic system and a "rigged economy," Gov. Maggie Hassan nominated a man to oversee the state banking industry who for 20 years had been the head of the New Hampshire Banking Association.
This is why people are disgusted with politics.
Sen. Jerry Little, R-Weare, is a decent enough guy. But putting him in charge of regulating the very industry he spent two decades advocating for raises real questions about how g o v e r n ment works in this state.
"The New Hampshire Banking Department is committed to protecting the public’s interest through professional supervision of the financial services we regulate," reads the message on the department’s website.
But what happens in those instances where the public’s interest might not strictly align with the interests of the financial institutions the department is supposed to regulate?
We can infer from his longevity that Little is a competent guy and a friend of the banking industry. We welcome the competence, but the public is right to question whether Little’s background compromises his ability to stand up to banks that may try to go beyond the bounds of what is prudent.
It’s been known to happen. In fact, Little was with the banking group on the darkest day in New Hampshire banking history – Oct. 10, 1991 – when seven banks in the state failed, including the Nashua Trust Co. Those banks represented 25 percent of banking assets in the state, and their failures sparked a crisis that required the Federal Deposit Insurance Corp. to bundle up the assets of the banks and sell them off. It’s not clear that the Banking Department played a role in those failures – it was blamed on a deep recession and banks that were too loose in their lending practices – but the fact that the failures even happened suggests there was a breakdown in an oversight process somewhere.
We bring it up to show that the question of banks pushing the boundaries of prudence isn’t just a hypothetical exercise, and the consequences of regulatory failure can be significant and even severe.
Little told the New H a m p shire Union Leader that opportunities like this don’t come along very often. To the contrary – if confirmed by the New Hampshire Executive Council, Little would be the fourth person to lead the banking department since 2010.
It’s hard to believe Hassan couldn’t have found someone with more of an arm’s-length relationship to the banking industry to oversee the department, which also licenses and regulates mortgage loan companies, title lending organizations and other financial institutions.
If those New Hampshire residents who voted their displeasure with the system on Tuesday want to continue their fight, they need look no further than Concord. Viewed in the one light, the Little nomination suggests that cronyism is alive and well in New Hampshire. Unfortunately, it’s hard to tell just how bad the system is, because the legislature and governor’s office claim to be exempt from the state’s transparency law.
Fixing that transparency law so that it serves the governed rather than the governors would be a good place to start.