HOWARD PITKIN
A faster chartering process for new banks could be in the works under legislative proposals now taking shape at the Connecticut Department of Banking.
The effort to smooth the path for firms seeking state banking charters tops the list of changes in state law the department expects to promote when the Connecticut General Assembly returns to work next month. The need for more speed also fits well with Banking Commissioner Howard Pitkin’s philosophy, dating back to his days as a bank examiner and administrator at the state agency, a department spokesman said.
“With all of the turmoil happening in the economy right now, he really thinks applicants shouldn’t have to wait so long for a charter,” said Jim Heckman, who doubles as legislative liaison for the banking department. “Anything that speeds up the process and gets new banks in business of writing loans and taking deposits would be a good thing.”
The General Assembly reconvenes Jan. 7, with any department proposals starting out before the Banks Committee, co-chaired by state Rep. Ryan Barry (D-Manchester) and state Sen. Bob Duff (D-Norwalk). Public hearings and testimony continue through late February, with most committee action wrapping in March.
Committee staff this week indicated Barry and Duff, along with other House and Senate members, were aware of the department plans to fine-tune bank charter rules but said it would be difficult for the lawmakers to comment before they see specific proposals.
Thomas Mongellow, vice president of the Connecticut Bankers Association, also hasn’t seen a charter-related bill yet but said the trade group typically favors “less regulation and less red tape, so we’d probably be supportive of the legislation when it’s introduced.”
Long Time Coming
The time needed to charter a new bank in Connecticut has varied widely, although by most standards, it tends to be lengthy. For example, organizers behind The Bank of Fairfield, the state’s newest entry, spent nearly 21 months between filing their initial application in December 2006 and opening the bank’s doors for the first time this summer on Aug. 29.
But while waiting up to two years or beyond is common, some recent newcomers such as Connecticut Bank and Trust in Hartford have sped through the chartering process in as few as 14 months. The longest interval during the past decade was for The Bank of New Canaan, crossing the finish line after 35 months and two days, according to banking department records.
Heckman said it’s likely the department would accept a “sunset” on the proposal, meaning that any changes adopted by the Assembly would expire after a specific period and revert back to current law.
“That would give everybody with a stake in the process a chance to evaluate how effective the changes were,” he said.
Gayle Fierer, previously the supervising administrative attorney for the banking department, last week was named to a new position spearheading its legislative initiatives. The move was part of a reorganization of the agency’s legal team, with other department lawyers picking up specific duties within the department’s three divisions regulating consumer lending, banks and investments.
Pitkin, who already had a reputation for shaking up organizational charts prior to becoming permanent head of the banking department in 2007, said the recent shuffle aligns its legal talent with individual strengths.
“(Our) attorneys have developed significant knowledge and experience in the business lines the department regulates,” Pitkin explained in prepared statement. “To put this knowledge to better use, the department is assigning them directly to each line division.”
