N.Y. Superintendent's Job Is Homecoming for Cephas

When Derrick D. Cephas took office on Monday as New York superintendent of banks, the New York State Banking Department got back one of its own.

Mr. Cephas (pronounced SEE-fus), who served as general counsel and deputy superintendent from 1983 to 1985, succeeds Jill M. Considine, who resigned to take a job at American Express Co. There is probably little he does not know about how the agency works.

"I've been there before," Mr. Cephas said in an interview.

State Authority Being Challenged

The department will need someone who knows his way around because its authority, like that of other state regulators, is being challenged by proposals to centralize more supervision in Washington.

"I'm concerned about all the regulations in Washington," Mr. Cephas said, adding that he has no intention of taking a back seat to federal regulators.

"If the concept of states as primary regulators vanishes, there will still be state banking departments, but they won't be very meaningful."

Mr. Cephas declined to list his priorities but said New York State's budget problems, consolidation among banks, community reinvestment issues, and deteriorating loan portfolios at commercial banks are major concerns along with banking reform.

"Banks have gotten to be almost as bad as savings and loans," he said. "And the budget problems in New York mean that we've got to do more with less at a time when we need to tackle what appears to be a deteriorating industry."

On industry mergers and consolidation, he said he has serious concerns about economic concentration, antitrust issues, and how to deal with the consequences of large-scale cutbacks in bank employees.

Cracking Down on Foreign Banks

And when it comes to community reinvestment, Mr. Cephas clearly intends to get tough. "Some foreign banks have got a less than stellar performance" in contributing to local communities, he said. "They need to move faster, and the state needs to make that clear to them."

"I was born poor, and I grew up poor," said Mr. Cephas, 39, who was reared in the small farming and fishing town of Cambridge, Md., on the eastern shore of Chesapeake Bay. A scholarship, supplemented by his own savings, took him to Phillips Exeter Academy in New Hampshire. From there he went on to Harvard University and Harvard Law School.

In 1979, he joined the New York City law firm of Breed, Abbott & Morgan. From 1983 to 1986 he took a leave to join the banking department and later the state's Urban Development Corp. He returned to the law firm in 1986.

Mr. Cephas himself appears mildly surprised by his rise through New York officialdom. "I was originally planning to move back to Boston after spending a few years in New York," he said.

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