N.C. bank chief to monitor U.S. deal

The Obama administration clearly won't take no for an answer when it comes to recruiting state Banking Commissioner Joseph Smith Jr. to tackle the mortgage mess that has been hampering the nation's economic recovery.

On Thursday, the administration tapped Smith to monitor the $25 billion settlement that calls for five of the nation's largest banks to provide relief to struggling homeowners.

The appointment comes 13 months after Smith, facing resistance from Senate Republicans, withdrew his name from consideration to become the overseer of Fannie Mae and Freddie Mac, the mortgage lending giants taken over by the government during the economic crisis.

Smith's new job, making sure the banks adhere to the terms of the settlement, won't require Senate confirmation. Smith wasn't available for comment Thursday, but N.C. Attorney General Roy Cooper said in a release that he plans to work from Raleigh.

Cooper said he requested that Smith be given the enforcement job.

"He and his team will look over the banks' shoulders to make sure that they meet targets for homeowners," Cooper said. "I know Joe. He will be tough. He will be thorough. He will be fair."

Smith's appeal is his uncanny ability to steer a middle course that has won the support of both the banking industry and consumer groups.

"Joe has done an excellent job during a very difficult time," said Jim Beck, CEO of Raleigh-based community bank TrustAtlantic Bank as well as chairman of the Greater Raleigh Chamber of Commerce. "He has remained even-keeled and even-handed."

Smith has been banking commissioner since 2002. Under his leadership the state strengthened its landmark anti-predatory lending law and tightened license requirements for mortgage brokers. New rules designed to help borrowers avoid foreclosures also were established during his tenure.

"He has really been instrumental in shepherding through a lot of the kinds of programs, practices and enforcement that has really made North Carolina a safe place for consumers and lenders alike," said Chris Kukla, senior counsel for government affairs at the consumer-oriented Center for Responsible Lending.

Smith's initial foray into Washington marked a rare instance when he wasn't able to win over those on both sides of the political aisle. Smith has been tight-lipped about that experience but said in an interview last summer that he had no regrets.

"It was an honor to be nominated," he said. "The process was exhausting but interesting. I met a lot of people in the administration and on the Hill, in both parties I might add, that are dedicated public servants."

In an interview last week, Shaun Donovan, the secretary of Housing and Urban Development, praised the efforts of both Smith and N.C. Attorney General Roy Cooper, who played a role in the settlement talks with the major banks.

"I do think North Carolina is an example of where the public sector can play a productive and important role" in preventing abuses and finding solutions, Donovan said.

'He's got the integrity'

Peter Skillern, executive director of Reinvestment Partners, a Durham nonprofit that fights predatory lending practices, said he distrusts some federal banking regulators but takes comfort in knowing that Smith will be overseeing the bank settlement.

"He's got the integrity to enforce the rules," Skillern said.

In North Carolina, Smith has been able to champion consumers without making waves, which undoubtedly has endeared him to the Obama administration, said Tony Plath, a finance professor at UNC Charlotte.

"Joe's job is essentially to get past the politics," he said. "Keep as many people in their homes as we can so that we don't increase the foreclosures that are on the market and get the foreclosures that (already) are on the market out of inventory so the home prices can start to go up again. That's a tall order."

Staff writer David Bracken contributed to this report.