Pub. 15 2018 Issue 2

16 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G N E W M E X I C O R E A L I Z E D R E A M S In order to effectively oversee these entities, FID has five different examination teams. We have our bank examination team, credit union examination team, consumer examination team, mortgage and escrow examination team, and lastly our newly created independent trust examination team. Annually, we generally complete over eight-hundred examinations. As a regulator, what challenges do you see the New Mexico banking community facing in the next few years? One of the challenges I see for New Mexico banks is the low loan demand in our state. We have one of the lowest loan-to-deposit ratios in the country. That is indicative of the overall economy and growth in our state. Obviously, a major function of a bank is to lend money. With such a low loan demand, a bank’s profitability and sustainability is tested. As our economy continues to improve, being able to capture quality credits will be important. Another challenge that all banks are dealing with is the changing regulatory environment. There are still changes on the horizon, such as the adoption of the Current Expected Credit Loss (CECL) standard that could present challenges to the banking community going forward. The size of the institu- tion is inversely correlated to how these regulatory changes and standards effect the institution. If an institution does not have the appropriate economies of scale, these challenges are more intense and could affect the overall viability of the institution. If I had to identify a single challenge that our New Mexico banking community is facing, it is the threat of cybercrimes. As technology has advanced, many banking services are now on a virtual platform. The evolution of banking to a more tech- based platform provides many convenient services to bank- ing customers; however, the tradeoff is increased risk. Cyber criminals are constantly evolving their craft. Having a good cyber security program is key to the future of banking. What have been some of your most important accomplishments thus far as Acting Director? I have served as Acting Director going on two years now. I have to say that the past two years have gone by in a blink of eye and we have accomplished so much. Overall, the examination teams within FID have become better detectors of fraud. Because of this, an examination of a non-profit trust company that provided trustee and fidu - ciary services to individuals with mental and physical dis- abilities, uncovered numerous acts of fraud, embezzlement, and mismanagement committed by the CEO of the company. Upon discovery of these egregious violations, I took immedi- ate action to preserve the records of the company, bring the operation under strict controls, and prevent the CEO from causing further financial harm to the clients of this company. Since then, the company has been placed into receivership, and I personally serve as the court-appointed receiver for the company. We have been working diligently to wind the com- pany down, while still maintaining the fiduciary relationships required by the terms of the individual trusts. Our end goal is to try to recover as much money as we can, in order to make the victims in this case as whole as possible. On the legislative front, we have also accomplished quite a bit. After the failure of the non-profit trust company, we discovered many discrepancies in the New Mexico Trust Company Act, specifically pertaining to emergency powers when dealing with an institution that has been found to be operating in an unsafe manner. We successfully amended the Act to address those issues, and to ensure that in the event a failure in the future, there are proper emergency powers in the law to allow the division to act swiftly and decisively in order to better protect consumers. Lastly, the passage of the Uniform Money Services Act (UMSA) was a huge accomplishment. Prior to the passage of the UMSA, New Mexico was the last southern border state (and one of only three remaining states in the country) that did not regulate or license money service businesses (MSBs). MSBs consist of money transmitters, currency exchangers, check cashers, and some forms of virtual currency providers. The passage of this act was a monumental task; however, a task that was very important to accomplish. MSBs are vulner- able to being exploited through illegal activity such as money laundering. What qualifications do you think are crucial to running FID? First and foremost, I think the Director of the FID should have a resume that consists of, at the very least, an under- graduate degree in a field pertaining to business, finance, or economics. Having a graduate degree in the same fields is not necessarily a requirement, but would certainly add to the overall resume of the person. The Director should have some private sector experience in the financial sectors. I think this is important in order to understand how areas of the financial sector operate and to understand how diverse the financial sector can be. With that being said, I think the most important qualifica - tion to run FID is a person’s ability to multi-task and handle several different issues at once. With fourteen different industries to oversee, day-to-day operations are constantly changing. There is not a day that goes by where I am not called upon to make decisions on issues concerning several different industries. I have to be able to change my mindset (the different hats that I wear) on a minute-by-minute basis. For example, on any given day, one minute I am discussing the legal lending limit for banks and ten minutes later, I am discussing requirements for licensing a mortgage originator. The director of FID needs to not only be versed in regulatory aspect of banks but on all fourteen different industries. At the end of the day, the Director of FID is that person where “the buck stops here”, and every decision is impactful in one way or another. Lastly, in order to be qualified to run the FID, the Director should possess a passion for public service. Public service, at times, can be overwhelming and underappreciated, but, at the end of the day, it is honorable and worthwhile. Many in public service do not do it for the paycheck, but for the social good. To have the ability to effect change on a positive level and the opportunity to help others is very rewarding. Without that passion, I believe, the direction of the Division would suffer. n n Christopher Moya Interview continued from page 15