Lending regulator plans to resign

Scott Bice, 46, commissioner of the Mortgage Lending Division since late 2003, said Thursday that he resigned effective July 31 to accept a bank position.

Bice’s term for the last three years was marred by controversy surrounding the failure of USA Capital, but his predecessor also felt the sting of criticism for failed private lenders.

Mendy Elliott, director of the Nevada Department of Business and Industry, has not named an interim commissioner for the $95,000 a year job, spokeswoman Amanda Penn said. Brent Boynton, a spokesman for Gibbons, declined to comment.

In a separate development, Elliott announced that she selected George Burns, former senior vice president and manager of compliance at Business Bank, to become commissioner of the Financial Institutions, which pays $94,000 a year. City National Bancorporation of Los Angeles acquired Business Bank earlier this year.

Bice was the first to run the mortgage division, which the Legislature created to deal with recurring problems at private lenders. He developed a reputation taking administration action against mortgage brokers accused of violating state rules. His actions included fines, license suspensions and license revocations. Bice counted 236 administrative actions over the last three and one-half years.

Bice helped persuade the Legislature this year to create 17 new positions at the mortgage division. That will bring the staff to 46, up from 12 when Bice started as commissioner.

Bice blamed his small staff for the biggest issue of his tenure.

When USA Capital, the largest private lender, filed for bankruptcy in April 2006, it had been 16 months, four months longer than allowed, since the last mortgage division examination of USA Capital’s financial records. Bice said he didn’t have enough examiners to review the books for every licensed mortgage lender in Nevada every 12 months.

Bice also argued that USA Capital was being looted long before he became commissioner.

Before Bice’s appointment, Scott Walshaw, then commissioner of the Financial Institutions Division, regulated both banks and mortgage brokers. Harley Harmon Mortgage and Interstate Mortgage Group were just the last of several private lenders that collapsed during Walshaw’s tenure.

The legacy of those failures seemed minor when compared with the collapse of USA Capital, which held $962 million in assets for 6,000 investors.

Bice said he did not have a large enough staff to examine private lenders and brokers who originate residential mortgages. The Legislature added 17 positions to the mortgage division staff, bringing the total to 46. Bice believes his successor will have adequate staff to conduct exams on private lenders yearly.

Bice said he was not asked to leave but said he decided to resign in order to establish a mortgage lending division for Town & Country Bank of Las Vegas.

Leo Davenport, owner of GFD Investments and a private lender, frequently criticized Bice but wished Bice well in his new job. Davenport said he hopes the state selects a new commissioner with extensive experience with auditing, which both Bice and Walshaw lacked.

Corrine Dale, president of Capella Mortgage, thanked Bice.

“I know what it was like before you came on board, and I know what it is like now, and it is a world of difference for the better,” Dale said. “You came into a very tough job, and managed to bring the industry together to support long-overdue legislation.”