Mary Gallagher
Commissioner, Massachusetts Division of Banks
Age: 42
Industry experience: 20 years
The first female commissioner of banks in nearly 45 years, and only the third ever since 1906, Mary Gallagher has an appreciation for regulation that provides a level playing field in an industry that demands consumer confidence and trust.
“I feel very fortunate that my continued curiosity led me to the Division of Banks, where I’ve come to truly appreciate the value and importance of community banking, lending and consumer finance at a much more localized level,” she said.
Gallagher, who was appointed in May, began her career just as “irrational exuberance” became a catch phrase, and she got to experience both the dot-com and housing bubble boom-busts. She is no stranger to the Division of Banks, having joined the division four years ago as chief operating officer after nearly 17 years working in global markets, sales and trading roles at large global institutions including Morgan Stanley, State Street and Deutsche Bank. She replaces Merrily Gerrish, the interim commissioner of banks who was filling in after former Commissioner Terence McGinnis left his post after two years for unknown reasons. Gerrish will resume her duties as the division’s general counsel.
Q: What are some of the big initiatives the division has been working on over the past few years that you hope to see through?
A: Our primary focus in the near term will be to ensure that the division continues to be well-equipped to meet our mission. I have had a few years already to see that the strength of the agency has been built up by those who have come before and is sustained by the well-seasoned and experienced team already in place. We are a relatively lean organization that constantly monitors emerging industry trends, so we will be focused in the near term on enhancing our staffing needs – working to fill some vacancies while bolstering training opportunities, particularly in evolving industry areas like large bank supervision, CRA reform, non-qualified mortgage products, cyber and IT examination and blockchain.
In addition to the strategic focus on our core mission, there are several agency initiatives and partnerships already in place that we hope to continue and even expand. The division’s Mortgage Settlement Trust has provided grant funding to sponsor financial literacy fairs at Massachusetts high schools as well veteran and military communities through a partnership with the Treasurer’s Office of Economic Empowerment. Prior commissioners established initiatives on cybersecurity and elder financial abuse prevention, and we hope to continue such efforts.
Q: How would you describe the safety and soundness of the state’s banking industry right now? What should the industry do to prepare as we get closer to a potential recession?
A: Fortunately, the Massachusetts banking industry is very strong and well-managed. The key metrics that the division uses to assess safety and soundness have been solid for several years – a reflection of a strong local economy coupled with talented bankers. The unemployment rate in Massachusetts has dipped below 3 percent for the first time in almost 20 years, at the same time real estate values have yet to show any signs of weakening.
As a result, asset quality is exceptionally strong in Massachusetts with loan delinquencies and charge-offs holding at very manageable levels. Capital levels are high, and earnings performance is improving. Just as the FDIC’s Problem Bank List has been declining nationally, any concerns with state-chartered banks in Massachusetts are isolated and minor in nature. In fact, the vast majority of our banks have earned satisfactory or strong examination ratings in the areas of safety and soundness and risk management.
With all that said, we certainly understand the cyclical nature of the economy and the impact that can have on the industry. I know our banks dedicate a significant amount of time and effort preparing for adversity, whether borne by market or economic conditions or other associated risks such as cyberattacks. I would encourage banks to continue managing these risks through continued modeling, stress testing, ongoing analysis and cyber preparedness. Finally, with competition for deposits being fierce, liquidity and interest rate risk warrant close monitoring.
Q: In recent years, the industry has consolidated in Massachusetts Do you think there is still a lot more ahead?
A: I believe strongly in local community banking and consumer choice, and while I’d like to think we’ve reached a peak in merger activity, I acknowledge that there are market pressures to expand, grow market share and gain efficiencies through mergers and acquisitions.
Offsetting the trend of consolidation, however, is the recent opening of New Valley Bank & Trust, a de novo commercial bank in Springfield. This is the first de novo bank to open in Massachusetts in a decade, and the first state-chartered bank since 2008. I’d like to think that the vibrant local economy and strong banking conditions can generate further de novo activity for the commonwealth.
Q: Along with your first deputy commissioner and general counsel, there are many women in top positions at the division. Do you see this as significant? Where do women stand in the state’s banking industry?
A: That the Baker-Polito administration appointed both First Deputy Commissioner Cynthia Begin and me to assume greater responsibility in leading the Division of Banks is a testament to our existing team – from the ranks of entry-level examiners to senior management, there is a solid foundation in place at the division. I’m humbled and honored to serve as commissioner of banks and thrilled to be part of an organization where women are in three of the most senior roles. There is plenty of data to suggest that diversity of thought is paramount for any organization’s success, and even prior to my appointment, the division already demonstrated strength in diversity.
I think a cultural shift has been evolving over time in many sectors, and although the change is happening more slowly in the banking and financial services industry, we are starting to see this shift translating into more diversity in executive roles and board rooms. I do believe that highly qualified individuals with diverse backgrounds lead to improved diversity of thought, exchange of ideas, critical thinking, adaptability and innovation.
Gallagher’s Five Favorite Leadership Quotes
- “It is not the critic who counts. … The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood … who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly so that his place shall never be with those cold and timid souls who know neither victory nor defeat.” – Theodore Roosevelt
- “It is amazing what you can accomplish if you do not care who gets the credit.” – Harry S. Truman
- “The time to repair the roof is when the sun is shining.” – John F. Kennedy
- “I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.” – Maya Angelou
- “Do your job.” – Bill Belichick
