Md. Bank Regulator Fired For Fighting Staff Cutbacks

Maryland's bank commissioner for the past 13 years was abruptly fired last Friday, after fighting to protect her department in the face of drastic budget cuts.

The sudden dismissal surprised and angered Margie H. Muller, who learned just 20 minutes before the move was made public that she and her deputy, David Porter, would lose their jobs and that her entire department would be merged into another.

The action followed Ms. Muller's efforts to block an administration budget proposal to cut $300,000 from the bank commission's budget and fire six examiners. That's about one-fourth of the department's $1.3 million budget and one-third of the examination staff, she said.

Ms. Muller, reached by telephone at her home in Baltimore, explained that she was concerned that the proposed cuts would leave the department unable to properly supervise 77 state-chartered banks.

"I would have started fiscal 1997 in July with a diminished budget that would have crippled the department," Ms. Muller said. "It would have been heartbreaking to tell these people, who have worked so hard, that they would have to go, when in fact they are sorely needed."

Ms. Muller said she was "angry" and "regretful" over the manner in which her dismissal was handled by the state. She said she was initially offered the option of resigning, but didn't have time to consider that alternative before the announcement was sent out.

"I was shocked, because I was given no warning that this was a problem," she said. "I had thought that if I was going to be terminated, I would have had some advance warning."

On top of the dismissals, the bank commission will be merged into the commission of consumer credit. The bank commissioner and deputy bank commissioner positions - with their $76,119 and $62,622 salaries, respectively - will be eliminated.

The commissioner of the consumer credit department, H. Robert Hergenroeder Jr., will take over as acting bank commissioner until legislation is enacted to merge the two departments. The merged position will be called commissioner of financial regulation.

The action came as a surprise to others in the industry, who viewed Ms. Muller as a "leader in the state banking system for years," said Ellen Lamb, spokeswoman for the Conference of State Bank Supervisors, a trade group that Ms. Muller once chaired.

"Certainly we look forward to working with the new commissioner and will help him as he restructures that agency, but we were surprised," Ms. Lamb said.

Ms. Muller was instrumental in setting up a groundbreaking pact last month among four Middle Atlantic states to allow state-chartered banks to branch across state lines and deal with one regulator, a key plank in state bank commissioners' fight to stay on a par with federal regulators.

John B. Bowers Jr., executive vice president of the Maryland Bankers Association, said he felt Maryland bankers are generally supportive of Mr. Hergenroeder, a former banker and state legislator who was appointed commissioner of consumer credit about nine months ago by Gov. Parris Glendening.

"The industry is very comfortable with Bob Hergenroeder," Mr. Bowers said. "He's a banker and knows the industry.

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