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Joseph A. Leonard, a member of the Banking and Financial Services practice group, was featured in Banker & Tradesman’s “In Person” interview on April 28. In the Q&A interview, Joe provides his unique perspective on the banking industry given his more than 25 years at the Massachusetts Division of Banks.

Q: What are some of the more interesting changes you’ve seen in banking in Massachusetts over your career?

A: When I started with the legislature, there were four types of bank charters: savings banks, cooperative banks, credit unions and trust companies of commercial banks. Over time, that changed, but back in those days, all the laws pertaining to savings banks were in one chapter. The Division of Banks had examiners who were trained to only do savings bank law, and the same thing for cooperative banks, credit unions and trust companies.

Over time, banks realized their competition really wasn’t amongst themselves. Their competitors were the mutual funds, and that’s when, in the 1980s, the laws were re-codified to say that each of the banks could do whatever the broadest power was given to each institution.

Massachusetts has had a wonderful past. We had the first savings bank law in the country, the first credit union law in the country, the first truth-in-lending law in the country, the first regional interstate banking. And I’ve had a wonderful seat to see all these changes and participate in a good bit of it.

Q: What kind of perspective do you hope to be able to share with bankers, now that you’re sitting on the other side of the table?

A: I’ve participated in the legislative process for 40 years now, so I hope to bring to the table that understanding of the general laws, why they were put in there, how they were drafted, as well as the perspective of having worked for a regulatory agency for 28 years. In the law, you’re dealing with the same words and the same facts, but different weight is given to those words and those facts, so I hope to be able to inform Nutter and its clients of what the legislative intent may have been in those words. I’d also like to anticipate, from the regulatory side, issues that people should spend more time addressing and supporting before any application is filed or any presentation is made to the division, and ultimately making for a better application when it’s submitted to the regulatory agency.

Q: What kind of challenges do you see on the horizon for Massachusetts banks – and regulators?

A: One major challenge is to update all the documents that regulate and supervise a community bank, from laws to regulations and regulatory bulletins of the division. There’s a modernization project with [the Massachusetts Bankers Association]. The division has participated in this by going over all their regulatory bulletins and their regulations to modernize and update and
streamline the statutes and also, to reduce the regulatory burden while maintaining consumer protections.

The more important thing is to recognize technology. That moves so quickly. Massachusetts law is wonderful, but it does take time to pass a law, and other competitors are able to advance more quickly with that new technology. It’s a combination of advancing the laws and having them recognize that the speed of change in the monetary system needs to be recognized in the law as well. Related to that is emerging payment systems. Whether it’s virtual currency or mobile apps, again, that’s something banks have to be concerned with and what impact those developments in technology and people’s habits will have on community banks.

Top Five Tips From A Regulatory Counsel:
1. Allocate time in your oral presentation for principals to describe the matter, reasons for action and resulting benefits or harm.
2. The burden is on you to review and double-check that the entire document accurately and completely reflects the transaction and involved parties.
3. Present the agency with a sound legal theory to consider.
4. If it isn’t written down, it never happened.
5. Help yourself and the regulatory agency by making any presentation complete, well-documented, supported and detailed to the issue and your institution as concise as possible.

For more details on Joe’s top five tips, click here.