Once a Lobbyist, State Banking Nominee Says He's Now Ready to Be a Watchdog
As a former lobbyist for the New Hampshire banking industry, Jerry Little had little trouble raising money for his 2014 campaign for state Senate.
Of the more than $100,000 in contributions Little collected, more than a third came from donors with ties to the financial sector. Little, a Republican, went on to win his race by a comfortable margin.
But, if Little’s 22 years as president of the New Hampshire Banking Association helped him get elected, it may hurt his chances to become the state’s next banking commissioner, the job he's now seeking.
Gov. Maggie Hassan nominated Little to the post last month, citing his “extensive experience in the banking industry.” Yet it’s precisely that experience that’s provoked opposition to Little, including an online petition, signed by more than 760 people, demanding Hassan withdraw his nomination.
Hassan’s pick has also met resistance from Chris Pappas and Colin Van Ostern, the two Democrats on the Executive Council, which must approve the nomination. Van Ostern says he’s concerned about Little’s ability to regulate an industry he worked hand-in-hand with for more than two decades.
“I have real doubts about whether this nominee’s background is consistent with the independence we need in this role,” he says.
Hassan has stood by the nomination, saying Little understands “the importance of a well-regulated financial sector to a strong economy.”
"Pivotal" role in Senate
Another supporter is Sen. Dan Feltes, a Democrat. He says Little helped push through a bill last year that helps struggling New Hampshire homeowners by requiring banks to give an additional 20 days’ notice before initiating a foreclosure sale. The legislation was opposed by the New Hampshire Banking Association, which wanted the change to apply only to big national banks.
“He was pivotal in making that happen,” Feltes says. “He did break with his former colleagues in the banking industry on that, stood up to them and got this done.”
Little acknowledged concerns about his background, but says he’s prepared to address questions about any potential conflict of interest. And he says it shouldn’t surprise anyone that people in the industry stepped up to help his Senate campaign.
“I appreciated it obviously, but these are my friends,” he says. “These are people that I have known personally, socially, professionally for two decades, and what they know of me is that I am a person with integrity and character and that I treat people fairly.”
If confirmed as banking commissioner, Little would lead a state agency that oversees state-chartered banks, credit unions and trust companies. One division conducts “safety and soundness” examinations of financial institutions and enforces state and federal banking laws. Another investigates complaints against mortgage brokers, finance companies and non-bank lenders.
An effective advocate
Little is well-respected in the State House as an honest and thoughtful broker. And as someone who no doubt knows the workings of state banking regulators as well as anyone, he was an effective lobbyist for the regulated.
Paul Rizzi, retired president of Merrimack County Savings Bank, says Little was a strong advocate for local banks after the Great Recession. At the time, Rizzi recalls, state lawmakers were anxious to side with consumers against the perceived abuses of the financial industry, which was already being subjected to sweeping new federal regulations.
“In my mind, there is good consumer regulation and over-the-top consumer regulation that would make it virtually impossible for a bank to function,” Rizzi says. “Jerry fought to make sure the legislation that was proposed was not redundant and over the top and not something that would hurt banks.”
Rizzi supports Little’s nomination and says he will make a “fine commissioner,” if confirmed. “He will obviously need to assure people that he doesn’t have a conflict of interest,” Rizzi says, “and I don’t think he does.”
Paul Gentile sought Little's assurances shortly after hearing of his nomination. Gentile heads the Cooperative Credit Union Association, which represents credit unions in New Hampshire, Massachusetts and Rhode Island, and sometimes found himself at odds with the bankers association.
He says that Little and the New Hampshire Bankers Association were vocal opponents of federal legislation that would have raised the cap on credit union lending to businesses. Banking associations around the country have also been pushing Congress for years to end the tax exemption for credit unions, which banks say gives the unions an unfair advantage.
“We put that to bed, but certainly someone with a background with the New Hampshire Bankers Association would catch our eye,” Gentile says.
Gentile says he and representatives from New Hampshire credit unions recently met with Little to talk over their concerns. “We sat with him for about an hour, asked him a number of questions about his approach to regulations,” Gentile says. “We felt OK that he would treat us as he would any other regulated institution.”
Little says his meeting with Gentile, as well as his time in the Senate, is evidence that he can meet both sides of an issue halfway.
“That’s what I think I do as a state senator,” he says. “I have constituencies that have different interests in seeing things happen and not happen, and the way you deal with that and get to the right answer is to hold the conversation and make sure everyone has a chance to express themselves.”
Making the transition
Executive Councilor Chris Pappas says he walked away from a recent meeting with Little with no doubts about his integrity, but he’s still worried Little might not be the right person for the job. The Council is expected to set a date for a public hearing on the nomination when it meets Wednesday, and Pappas says he'll use the opportunity to press Little on how he'll make the transition from lobbyist to watchdog.
Pappas points to the to the scandal involving Financial Resources Management as an example of the need for a strong consumer advocate as banking commissioner. The Lakes Region firm was exposed in 2009 as a Ponzi scheme that defrauded investors of millions of dollars.
There was plenty of blame to go around among state agencies, but investigators found that the banking department in particular had ignored numerous warnings over the years, including dozens of violations uncovered by the department’s own examiners.
“I remain concerned about putting someone with a lobbying career in as chief regulator of banks in our state,” Pappas says. “So I’m going to let the process play out and hope to continue to probe some of these issues through the public hearing and further conversations.”