Florida's top elected officials could pick the state's next financial regulator tomorrow, nearly a month after they pressured the previous person in the job to resign.
More than 30 people have thrown in to become commissioner of the Office of Financial Regulation, but the four-member Cabinet already has some favorites, including: state Rep. Jay Fant, a Jacksonville Republican whose family bank was shut down by OFR in 2012; Linda Charity, who worked in the office and was twice interim commissioner; and Scott Jenkins, a vice president at Wells Fargo who used to work for the Florida Bankers Association.
It's a relatively obscure job, but one that oversees some of the state's most important industries. Here are three reasons why it's important:
1. OFR oversees and regulates the "shadow banking industry."
Florida's check-cashing stores have been dubbed a "shadow banking industry" responsible for laundering hundreds of millions of dollars each year in the state. For years, OFR, which regulates the industry, and lawmakers did little to crack down on it, but a recently created state database is supposed to help. Already, Walmart is trying to cash bigger checks without participating in the database.
2. It's important to powerful special interests.
The office oversees the mortgage industry, banks, payday loan stores and other aspects of the financial service industry, which has deep pockets and is constantly looking to loosen regulations. The payday loan industry this session was successful being able to cash bigger loans with larger fees. The aforementioned Walmart is aiming again to get around state regulations, with the help of some lawmakers. And the office is likely to start overseeing a new industry in the near future: cryptocurrency.
3. The office's failures can affect you.
A damning series of stories in the Miami Herald in 2008, at the height of the financial crisis, showed how OFR allowed more than 10,000 people with criminal histories to sell homes while ignoring the complaints of consumers who were victimized by them.
The series showed how regulators were asleep at the wheel, and how consumers were harmed. Take this excerpt from one of the series' first stories:
State regulators allowed thousands of ex-convicts to enter a profession that gave them access to the most sensitive and personal financial information: credit cards, bank accounts and Social Security numbers. Those criminals went on to commit nearly $85 million in mortgage fraud, the newspaper found. They stole their customers’ identities. They stole their money. They even stole their homes.
The stories led to legislative reforms and the resignation OFR Commissioner Don Saxon, who felt that the allegations were overblown and that a state investigation would vindicate him.