BETH LINDSTROM
Budget ‘challenge’

The issues have been identified, but the action plans remain in question.

Only a few weeks into the New Year, Beth Lindstrom, the newly appointed director of the state Office of Consumer Affairs and Business Regulation, is preparing to tackle the issues that face the business – and banking – community in Massachusetts.

Although not yet ready to formally announce her 2003 legislative agenda to the eight regulatory divisions under the umbrella of Consumer Affairs, Lindstrom said the biggest challenge facing businesses is the state budget.

“Our biggest challenge is the budget and we are looking at consolidations of agencies and the efficiencies of consolidations,” said Lindstrom. “Like anything, we look at revenues and expenditures and see what we need to do.”

At the Massachusetts office of the U.S. Small Business Administration, officials said they are hopeful that core services that aid small businesses can be maintained.

“I work in the area of advocacy for small business and 98 percent of businesses in New England are small,” said Barbara Manning, regional advocate for New England. “I think the [economic] recovery we see will come from the small-business sector.”

Lindstrom said that before she could set any type of agenda and address issues relative to banking, financial services and small businesses, it was imperative that she “get up to speed” before making any decisions “that would affect the industry and the people involved.”

But industry members are ready for some change.

“The chairmanships haven’t been named yet so we don’t know what we’re dealing with, but any push this year will be in expanding the Community Reinvestment Act in the mortgage companies,” said Robert S. Barry of the Boston lobbying firm Beacon Strategies, which works with financial services firms. “Predatory lending is always a priority, but again, you don’t know where the priorities are until we know who is chairing the departments.”

Lindstrom said that, at this point, she is not making changes in staffing but has met with agency heads and administration personnel for the “quick overview” of concerns and issues facing Bay State businesses and consumers.

Two issues of concern for bankers are privacy and Web banking, Lindstrom said. Industry professionals said they are ready to lobby for appropriate action in those areas.

“There is a bill pending that the Massachusetts Bankers Association filed in an effort to simplify the electronic banking statute and make it more consistent with the federal law, and we want to see that move forward,” said Lynne Barr, partner at Goodwin Procter in Boston and legislative counsel to the MBA, referring to the association’s bill that would revise aspects of the electronic banking statute, including allowing banks to provide disclosure in electronic form.

Barr said the issue of modernizing electronic banking legislation and bringing it up to date is high on a lot of banker’s lists, and while Lindstrom agreed that technology is important, she said announcing any legislative initiative is premature this early in her tenure.

“What’s important is to make sure our [Consumer Affairs’] technology is always on the cutting edge,” said Lindstrom. “For consumers and the industry, it’s important to feel confident in your business environment. In the meantime, hopefully we can become more efficient in our technology. We want to keep all associations and agencies on the wireless service to keep everyone in the loop. There are some things, specifically legislation [that Consumer Affairs may pursue], but what direction we want to take is premature.”

Lindstrom said the banking and finance industry retains a strong presence in the state and it is important to preserve the industry’s safety. Consumer Affairs oversees the state Division of Banks.

“It is important to have a safe and sound banking environment … and we need to make sure we are doing everything we can, from a cost-effective standpoint, but still enforce strong regulation,” said Lindstrom. “We need to continue the oversight and keep regulation that is beneficial to everyone, but again, is cost-effective.”

‘Critical’ Topics

According to Barr, the banking industry is Massachusetts is looking to Lindstrom and her office to address numerous lingering issues.

“There is a lot to work on this year. We have a lot of duplicated and, I think, unnecessary licensing requirements and I would like to see some rationalizing in that area,” said Barr. “There needs to be a little more action on the wildcard parity in terms of letting state-chartered banks do what federally chartered banks do. We are lucky we have a healthy and robust banking industry in Massachusetts and we would like to see that continue.”

Lindstrom said the issue of state charters would not fall off her radar screen because “it’s critical for the competitiveness in our marketplace” and her main focus is to ensure that all federal regulatory changes also be addressed at the state level.

Another issue facing bankers that also has Lindstrom’s attention is predatory lending. But while Lindstrom is anxious to tackle the issue, bankers are still weary of the implications of new regulations governing that area.

“I do not engage in predatory lending nor do any of my clients, and the problem we have had and continue to have is the very unclear definition of what constitutes unfair lending practices,” said Barr. “I’m very sympathetic to the efforts to crack down on abusive lenders but people who operate fairly in the marketplace should not be penalized because we have vague rules.”

Recent regulatory and legislative developments in the industry have given consumers a reason to reach out to the Consumer Affairs office, and Lindstrom said educating the public and Bay State businesses is key to tackling complicated issues.

The “Do Not Call” registry has become a widely looked-at piece of telemarketing legislation and Lindstrom said the measure makes perfect sense for industry professionals.

“From a business standpoint, [businesses] can be more targeted and can save a lot of money by taking a more targeted approach to their customers,” said Lindstrom. “If people feel good about buying things, they are going to buy them. This [registry] is going to help consumers make a smart approach to buying and businesses make a smart approach with their customers.”

And with the recent news of Massachusetts Bank Commissioner Thomas J. Curry’s consideration for director of the Federal Deposit Insurance Corp., Lindstrom said the banking industry may be facing a new challenge.

“It’s not a decision that will be made tomorrow, so if Tom [Curry] is chosen, we will have time to learn all we can about his management and his management style,” she said.

The Division of Banks has historically had an “excellent working relationship” with the Office of Consumer Affairs and Business Regulation, according to Steven Antonakes, senior deputy commissioner of administration and policy at the DOB. The division, he said, looks forward to working with the new administration.

As the first woman to head the Massachusetts State Lottery and oversee the $3 billion agency and its $600 million budget, Lindstrom said she is prepared and excited to begin the next step of her career with the Romney administration.

While Lindstrom has as strong political background, she said in her new position her business background stands out and her political background comes second. Despite her experiences as founder of her own online company and as executive director with the Massachusetts Republican State Committee, Lindstrom said sorting through the sheer volume of information has been a challenge in her first days on the job at Consumer Affairs.

According to Lindstrom, who lives in Groton with her husband, Ray, and three sons, “I leave my house by 5:30 [a.m.] in the morning so I have the time to get in here and read and let it soak in.”