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Florida financial regulator resigns

By Jennifer Liberto, Times Staff Writer
In print: Wednesday, August 13, 2008

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TALLAHASSEE — The beleaguered top financial regulator for Florida abruptly announced his resignation Tuesday, moments before his bosses could vote to oust him.

In a meeting of the Financial Services Commission, Gov. Charlie Crist joined Chief Financial Officer Alex Sink's call to fire Don B. Saxon, 57.

But rather than wait for the vote, the financial services commissioner, a veteran state bureaucrat, opted to announce his resignation from the $133,000-a-year job, effective Sept. 30.

Sink has been calling for Saxon to resign since late last month, when the Miami Herald wrote a series of stories about how lax enforcement of state laws allowed convicted felons to be licensed as mortgage brokers, including individuals who took part in mortgage fraud.

"I believe we have to have new leadership. Leadership that's proactive, not reactive. Leadership that will keep us, as board members, informed," Sink said. "I've yet to be convinced that this is the kind of leadership we have there."

Until Tuesday, Crist had not openly discussed dissatisfaction with Saxon and shocked veteran observers by seconding Sink's motion.

Saxon's resignation came as the four-member Florida Cabinet, acting as the Financial Services Commission, unanimously approved a stricter set of emergency rules that ban people from obtaining mortgage broker licenses if they've been convicted or plead no contest to felony financial crimes such as fraud, money laundering, dishonesty or breach of trust, including extortion, grand theft and embezzlement.

The emergency rules also bar people from obtaining mortgage broker licenses for 15 years if they've been convicted or plead no contest to felony crimes of "moral turpitude," such as rape, aggravated assault or armed robbery.

The new rules don't apply to mortgage loan originators, since that would require a legislative change. The Herald investigation found hundreds of felons worked as originators, whom state law doesn't regulate.

The emergency rules last only 90 days, but officials agreed to start the process to making them permanent.

Agricultural Commissioner Charlie Bronson wondered if the commission had the authority to tighten mortgage brokerage licensing without a legislative change. Attorney General Bill McCollum went a step further and said he didn't believe that the Financial Services Commission had that power, although he was willing to support the rules. Crist and Sink disagreed.

"We have (that authority) until somebody says we don't. And it protects the people," Crist said.

Saxon said he wanted to "pursue other areas of my career." The commission unanimously accepted his resignation.

After he left the Cabinet meeting, Saxon said that he wants to reserve judgment as to the agency's failures under his watch until an outside audit is completed.

"You always wish you could do better," Saxon said to a gaggle of reporters who had cornered him in an elevator. "We were applying the statutes the best we could."

Saxon, who worked in state government for 33 years plans to retire upon his departure, he said in a press release.

He will be eligible for a lump sum benefit of $198,675 through his participation in the Deferred Retirement Option Program. And he'll collect annual retirement benefits of $61,600.