CSBS Mourns the Passing of General Counsel John “Buz” Gorman
|
|
|
Washington, D.C. – The Conference of State Bank Supervisors (CSBS) today announced that John “Buz” Gorman has passed away after an eight-month battle with glioblastoma. Mr. Gorman started his career at CSBS in 1996, serving as General Counsel for the last 15 years. He held pivotal roles in the enactment of important legislation and served as a mentor to CSBS staff and throughout the state regulatory system, leading with positivity, humor, and strength. “The state regulatory system and the broader financial system will forever be in debt to Buz Gorman,” said CSBS President and CEO Brandon Milhorn. “He was a critical contributor to every major piece of financial services legislation over the past 30 years. Buz will be remembered for his unrivaled knowledge of financial services policy and regulation, but more importantly for his mentorship, friendship, and leadership. He will be greatly missed by his friends and colleagues at CSBS and throughout the state system.” |
|
|
| Mr. Gorman came to CSBS from Capitol Hill, where he spent a decade covering work and environmental issues for former Florida Senator Connie Mack. Early in his CSBS career, Mr. Gorman was critical in successfully drafting and implementing the CSBS Nationwide Cooperative Agreement. The agreement provided a framework for states and federal regulatory agencies to coordinate the supervision of state-chartered |
|
|
banks that operated in multiple states. Mr. Gorman’s steady demeanor and positive attitude are credited with helping states resolve disagreements and adopt this new, important agreement. Mr. Gorman worked with Congress to develop the blueprint that led to the eventual passage of the Financial Services Regulatory Relief Amendments Act of 2006, a landmark bill that gave state regulators a vote on the Federal Financial Institutions Examination Council and helped improve supervision of multi-state, state-chartered banks. He was instrumental in the creation and launch of the Nationwide Multistate Licensing System. In early 2007, he set a course for changing the mortgage and housing markets through new state and federal supervision requirements. The resulting Secure and Fair Enforcement for Mortgage Licensing Act changed mortgage regulation, bringing new protections for consumers and efficiencies for the mortgage market. Mr. Gorman also played a key role in advancing provisions of the Dodd Frank Act that advanced the state system by re-setting the state-federal balance in banking law and consumer protection and ensuring that the Federal Reserve System maintained its supervisory role over smaller institutions. The only thing that made him more excited than a state banking matter was his pride and love for his wife Kathy and his sons J.P. and Andrew. |
|
|
| A multi-year effort to enhance NMLS and deliver an improved user experience for state regulators and industry professionals – those who rely on NMLS the most. |
|
|
Washington, D.C. – The FDIC’s proposed corporate governance guidelines for certain state-chartered banks are so fatally flawed that they should be withdrawn, state financial regulators said in a comment letter filed by the Conference of State Bank Supervisors (CSBS). “With little justification and no analysis, the FDIC proposal tramples on the historic role of the states in corporate governance,” said CSBS President and CEO Brandon Milhorn. “The FDIC guidelines would micromanage how a bank’s board functions, imposing a tangle of organizational requirements and procedural checklists.” Approximately 60 of the nation’s more than 3,600 state-chartered banks would be explicitly subject to the guidelines, which would apply to FDIC-supervised, state-chartered banks with more than $10 billion in assets. The FDIC, however, could also extend the guidelines to smaller banks if it deems them to be “highly complex or present a heightened risk.” For state-chartered banks that are not members of the Federal Reserve System, the FDIC shares supervisory responsibility with state regulators. The proposed guidelines would conflict with state corporate governance laws, introduce overly complex and unnecessary board independence requirements, and confuse the roles and responsibilities of directors and management. The requirements also would create an unlevel playing field for covered banks, as institutions supervised by the Federal Reserve and Office of the Comptroller of the Currency would not be subject to similarly strict mandates. |
|
|
The FDIC should withdraw its proposed corporate governance and risk management guidelines. The proposal ignores and conflicts with state corporate governance laws, micromanages how a bank’s board is constituted and functions, and imposes a tangle of ill-designed organizational requirements and procedural checklists. In short, the proposal is fatally flawed, as CSBS told the FDIC in a comment letter. State regulators promote safety and soundness and support strong corporate governance and risk management practices. However, the FDIC’s proposal lacks data or factual support to demonstrate that these additional corporate governance and risk management requirements would actually promote safety and soundness. In the end, the guidelines appear to be a solution, albeit specious, without a defined problem. The guidelines would conflict with state corporate governance laws. For example, a new federal “stakeholder” standard would require bank directors to consider the interests of an impossibly broad list of stakeholders, including the general public. But state laws already govern a board’s obligations and duties, and for over 100 years these state fiduciary standards have made clear that directors owe a fiduciary duty to the corporation and its shareholders. Ultimately, the FDIC’s new federal stakeholder standard would undermine the ability of directors to meet their primary duties to the bank and its shareholders. The FDIC’s proposal would also blur the critical and fundamental distinction between a board’s policy setting and oversight responsibilities and management’s operational responsibilities. Bank directors would be required to carry out a litany of prescriptive tasks that are delegated to management under every other corporate governance framework. Banks and their boards would be overloaded with procedural checklists, and no doubt distracted from focusing on core safety and soundness risks. The guidelines include a new board composition requirement, mandating that most of a bank’s directorate be independent and outside directors. And the FDIC adds new tests for when a bank director would qualify as “independent.” These requirements are unnecessary and overly complex. They would needlessly upend the current composition of many banks’ board of directors and create complications for banks with holding companies as well as publicly traded banking organizations. These flawed guidelines would apply to banks with $10 billion or more in assets that are jointly supervised by state regulators and the FDIC, i.e., state nonmember banks. Approximately 60 state-chartered banks would be subject to these onerous requirements but not the nearly 100 other banks of that size that are not subject to FDIC supervision. The FDIC could also extend the guidelines to any size state nonmember bank it deems to be “highly complex” or posing a “heightened risk.” The guidelines have the perverse effect of imposing the most onerous corporate governance and risk management requirements on the relatively smallest banks. But the FDIC has provided no rationale for why one group of banks should have a dramatically different set of corporate governance and risk management requirements than others. State regulators believe the best solution is for the FDIC to withdraw this fatally flawed proposal in its entirety. |
|
|
| For most of my professional life, I have worked to turn my perspective on law and public policy into executable strategic plans. I like to say that I spent the first 24 years of my life desperately trying to become an attorney, and the rest trying not to practice at all. Then, after a career in national security, I found myself at the FDIC nearly six years ago focusing on financial services, technology, and transformation. How could the agency overcome siloed data, legacy technology, and rigid processes to more effectively supervise banks? How could we rethink our laws, policies, and engagement with industry to foster innovation – reducing costs, improving compliance, and increasing access to financial services for underserved communities? |
|
|
|
