President Steve introduced our speaker—Jerry Little, Banking Commissioner for the State of New Hampshire.  Jerry graduated from Concord High School and the University of New Hampshire. He started with a career in broadcasting and then as press secretary for Governor John H. Sununu. Jerry served as chair of the New Hampshire Bankers Association, eventually being nominated for banking commissioner by Governor Maggie Hassan.
Jerry Little
Jerry began his talk with an explanation of the national banking system and how New Hampshire’s banking department fits into the dual nature of that system. President Lincoln set up the first national banking system that stuck. The states have their own individual systems, and the two systems operate simultaneously—the national banking system and the state charter banking system. Mascoma Bank, for example has just moved back into being governed by the New Hampshire Banking Department after having operated for a number of years under the federal system when such a charter was necessary to have operations in more than one state. Jerry noted that half of all small businesses get their funding from state-chartered banks, which have a more community orientation. Last year Congress passed a regulatory relief bill that defined community banks as banks having less than $10 billion dollars in assets, a metric that Jerry strongly disagrees with. He stated that it’s the focus of the bank’s services that matters, not the size of the bank’s assets.
The New Hampshire Banking Department also regulates non-depository trust corporations. The department receives about four to six trust applications a year, including some that might be set up for just a single family. Trusts can have a very narrow focus, and their fiduciary duties are regulated.
Friction has developed in the banking system nationally as organizations look for ways to get around regulations such as those required by the FDIC. Google and other online organizations are looking for a “killer app” that will wipe out the banking industry as it is presently structured.
The New Hampshire Bank Department has two main focuses: to foster a robust economic climate and to provide consumer protection. The state department operates to promote competition and to protect the consumer. The department does not operate in the regulation of business lending by banks. The department does regulate such operations as car loans and other small loans—but not title loans. New Hampshire has very few payday loan operations because of our strict regulations.
Much of Jerry’s focus as banking commissioner has been to overhaul a broken budgetary process. New Hampshire’s budget-making regime calls for establishing budget figures two years in advance, usually with a demand for a minimal percentage increase. The process has had a very negative effect on hiring procedures and for the enabling of a workable career advancement path for the department’s employees. Of the 55 employee positions authorized in the department budget, only 45 are currently filled. On top of that problem is the formidable task of making sense of a budget that comprises two budget books each one-foot high—with a lapse of expenditure of $1.2 million of the allocated funds each year as estimates are made for hiring two years in advance. Salaries and benefits comprise 82% and tech resources 17% of the depart budget.
The banking department spends $150,000 to $180,000 in training a new hire—then the new employee finds that there is no visible career ladder laid out for him beyond bank examiner 1 and 2. The highly trained employees then jumps ship to more lucrative employment across the street with the FDIC, for example. Jerry has begun to address these problems with a regularly scheduled biweekly staff meetings with a focus on establishing visible career ladder. Jerry has also gotten governor Sununu’s support in making changes to the budgetary process through legislation now before the state legislature.