Derrick D. Cephas, who as New York State superintendent of banks had a significant influence on regulation both in Washington and in other state capitals, has resigned to join a Wall Street law firm.
Mr. Cephas, who was appointed by Gov. Mario M. Cuomo in April 1991, is joining the firm of Cadwalader, Wickersham & Taft.
The resignation was reported Thursday by The New York Times and announced by the law firm, but it was not confirmed by state banking department spokeswoman Clare Sykes. Mr. Cephas could not be reached for comment.
Mr. Cephas had made a three-year commitment to the superintendent's position, and had made it clear he wanted to return to the private sector, according to industry sources. There had been speculation for several months that Mr. Cephas would leave his post this year.
A source said that the governor's office had hoped Mr. Cephas would stay on through the governor's reelection campaign this fall.
Three years is a typical tenure for New York superintendents, sources said. "For most people, these are not lifetime jobs," said H. Rodgin Cohen, a banking lawyer with Sullivan & Cromwell.
Mr. Cephas had been a partner in the New York firm of Breed, Abbott & Morgan prior to his state regulatory appointment.
A replacement is unlikely to be named until after the November elections.
Leaving a Legacy
"Whoever is elected [as governor] will have to look to someone that the [banking] industry is comfortable with, as well as community groups," said Warren Traiger, a New York-based lawyer who has acted as special counsel to the state banking department.
Mr. Cephas is leaving a legacy as superintendent that will encourage future state regulators to act as catalysts of change, industry sources said.
"The most important thing Derrick's done is to verify the relevancy of the dual banking system," said Mr. Traiger.
Under Mr. Cephas, "New York did what state regulators should do - apply regulatory reforms to a limited universe," Mr. Traiger added.
"Whether you agreed with him or not, he forced the consideration of a number of crucial issues," said Mr. Cohen.
Mr. Cephas waded into several important controversies, including reform of bank reporting under the Community Reinvestment Act and conversion of mutual savings banks into publicly owned companies.
Under Mr. Cephas' direction, the state banking department changed the regulation of foreign banks and allowed banks to open branches across state lines. He also recommended a new and controversial method of assessing whether banks are meeting CRA responsibilities.
Mr. Cephas also approved the conversion of Green Point Savings Bank from a mutually owned institution to one owned by shareholders, but he denied the million-dollar compensation packages for the bank's trustees and management.