The Finance Commission of Texas met Thursday, October 20, 2011, in Hearing Room E2.028, Texas Capitol Extension, 1100 N. Congress Avenue, Austin, Texas.

Members and Staff in attendance were:

Bill White, Finance Commission, Chair
Stacy London, Finance Commission Member
Darby Byrd, Finance Commission Member
Cindy Lyons, Finance Commission Member
Jonathan Newton, Finance Commission Member
David J. Cibrian, Finance Commission Member
Lori McCool, Finance Commission Member
Jay Shands, Finance Commission Member
Paul Plunket, Finance Commission Member
Susan H. Burton, Finance Commission Member
Larry L. Patton, Finance Commission Member

Others Present:

Jim Crowson Assistant Attorney General, Office of the Attorney General

Finance Commission Chair Bill White announced a quorum was present, with all Commission Members present. Chairman White called the meeting to order at 3:22 p.m.

Chairman White called for an Executive Session at 3:24 p.m.

Chairman White reconvened the Finance Commission at 6:10 p.m.

Possible Vote to take action with Respect to the Duties of a Person Holding the Position of Executive Director of the Finance Commission, Deliberations with Respect to the Duties of Persons Holding the Position of Agency Commissioner Positions, and Other Staff.

Members of the Compensation Committee discussed the evaluation process including methodology used and the review of comparable pay history. Reasons for recommendations of salary adjustments for each Commissioner were provided. The Members stressed that in the compensation process they were extremely sensitive to the budgetary pressures of the political and economic climate. Members summarized the work and production of the three Commissioners, described as extraordinary leaders.

The review of state compensation for agency commissioner positions, and the analysis of agency commissioner pay history for the last 18 years were also taken into consideration. An overview of both federal compensation levels for the Federal Reserve, Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) positions, and job postings for open federal comparable positions were discussed. The Texas Bankers Association (TBA) and the Independent Bankers Association of Texas (IBAT) conducted executive pay surveys of the Texas industry and those were used as well.

Members addressed and discussed the mission to properly regulate the state lending industry and the importance of effective regulation by the Commissioners. The evaluation of and review process of each yielded performance ratings of excellence. The Members noted that no taxpayer dollars are used to fund the agencies’ operations or salaries. Members stated that since becoming self-directed, semi-independent (SDSI), the agencies have been fiscally responsible and well-managed per the budgetary process.

Specific reference was made that the Commissioners have not received cost-of-living and longevity pay adjustments during a 10-year period while these allowances had been provided only to the agencies’ staff. Members confirmed 100% support of industry stakeholders (TBA/IBAT), and the Texas Mortgage Bankers Association (TMBA) for competitive pay necessary to retain quality commissioners. Members agreed that even during current economic conditions there was an urgent need to become competitive with state, federal and private industry pay, given the extensive hiring mandates required to support the Dodd-Frank Act and the Consumer Finance Protection Bureau (CFPB) programs.

Members also agreed that agency heads are highly valued and are major assets. The Commission must avoid the loss of present talent and maintain the ability to hire future talent with experience; this focus is more important than ever with the current economic condition and the federal regulatory environment. Members noted that the Commissioners’ current pay is significantly below state, federal and the private industry based on the research and analysis conducted.

Stacy London made a motion that the Finance Commission approve salary adjustments effective October 1, 2011 for the three Agency Commissioners as follows:

Texas Department of Banking Commissioner:

Increase in salary from $180,000 to $205,200, a 14% change of $25,200

Texas Department of Savings and Mortgage Lending Commissioner:

Increase in salary from $155,000 to $176,700, a 14% change of $21,700

Office of Consumer Credit Commissioner:

Increase in salary from $155,000 to $170,500, a 10% change of $15,500

Cindy Lyons seconded and the motion was adopted.

Darby Byrd made a motion that the Finance Commission make a one-time Executive Director stipend payment of $2000 to rectify a pay gap resulting from the recent Executive Director change.  David J. Cibrian seconded and the motion was adopted.

Discussion of and Possible Vote Pursuant to Section 551.072, Texas Government Code Regarding the Purchase, Exchange, Lease or Value of Real Property.

Jay Shands made a motion pursuant to the provisions of Sections 16.006 and 16.007, Texas Finance Code, that the Finance Commission encourage the three agency Commissioners to move forward with facility planning and real property matters including negotiations with respect to the purchase, exchange, sale or lease of real property as necessary in order to obtain adequate facilities for the operations of the Finance Commission, the Department of Banking, the Department of Savings and Mortgage Lending, and the Office of the Consumer Credit Commissioner.

He further moved that the three agency Commissioners be authorized to select, pursuant to appropriate procedures a Texas Multiple Award Schedule (TxMAS) contractor, to facilitate the process of defining and locating appropriate and adequate facilities for the operations of the Finance Commission and the three departments.

He further moved that, if the three agency Commissioners are not in unanimous agreement with respect to any incremental step in the procedure of obtaining adequate facilities, the Strategic Planning Committee be authorized to provide guidance in order that the process may move forward.

He further moved that the final decision with respect to the financial structure of an arrangement to obtain adequate facilities for the operations of the Finance Commission and the three departments is subject to the approval of the Finance Commission.  Stacy London seconded and the motion was adopted.

Possible Vote to take action with Respect to the Duties of a Person Holding the Position of Executive Director of the Finance Commission, Deliberations with Respect to the Duties of Persons Holding the Position of Agency Commissioner Positions, and Other Staff.

Paul Plunket made a motion that the Study Committee of the Finance Commission be charged with developing a protocol in fact finding and proper analysis of any potential conflict of interest that may arise with respect to either employees or Commissioners at any time in the future.  Cindy Lyons seconded and the motion was adopted.

There being no further business, Commission Chair Bill White adjourned the meeting of the Finance Commission at 6:27 p.m.

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Bill White, Chair
Finance Commission of Texas

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Doug Foster, Executive Director of the
Finance Commission of Texas

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Tammy King Wooten, Executive Assistant
Finance Commission of Texas