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.