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Banking Commish Travels on Banker Money

State Financial Institutions Commissioner Greg Gonzales has made 14 out-of-state trips in the past 18 months, receiving about $14,000 in reimbursement for his travel expenses from a department budget financed by the businesses it regulates.
The trips, Gonzales says, are for keeping open lines of communication with other state banking regulators, federal officials and officials in the lending business.
“The more dialogue we can have in the industry, the better, I think,” he said in an interview. “Dialogue is just the key… given the complexity of the regulatory environment and the way it is changing.”
The commissioner, who has held the same position under both former Democratic Gov. Phil Bredesen and current Republican Gov. Bill Haslam, also said that it is inappropriate to state – as the News Sentinel did in a recent overview of gubernatorial cabinet travel – that his trips are at taxpayer expense.
The Department of Financial Institutions develops a budget that is subject to approval of the governor and the General Assembly, as with the rest of state government. But unlike the others, the department then makes an “assessment” of state banks to cover the cost of oversight activities, including audits, during the year. Other regulated industries – credit unions and so-called “payday” lenders, for example – also pay fees intended to cover their share of regulating costs.
“We are self-funding,” he said of the department budget, which is about $8.5 million this year. “It’s not taxpayer dollars.”
But Dick Williams, chairman of Common Cause of Tennessee, both as to frequency – he wonders if there is duplication of information or “overlap in content value” at the various conferences – and the general nature of the arrangement.
“The fact that it’s not direct taxpayer monhy is kind of fungible,” he said. “Anything charge to a bank ultimately gets back to be charged to its customers. It’s not like it’s free money.”
“If state government is looking to a top-to-bottom review on expenses, they ought to look at regulatory fees, too, in addition to direct taxpayer money,” he said. “And maybe he ought to go visit some groups of consumers, too, not only the people who run the banks… to hear the other side of the story.”

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