St. Anthony: New commerce commissioner beefing up the agency

  • Article by: NEAL ST. ANTHONY , Star Tribune
  • Updated: February 12, 2012 - 6:22 PM

More investigations, enforcement actions under Rothman, who also supports improving financial literacy for consumers.

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Michael Rothman

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Mild-mannered Minnesota Commerce Commissioner Mike Rothman, described by Republican and Democratic predecessors as a good listener, has put the teeth back into the agency.

Rothman, a business lawyer by trade, was hired by Gov. Mark Dayton a year ago with a mandate to step up consumer protection, enforcement and financial literacy initiatives at an agency that was perceived as less-than-aggressive under Gov. Tim Pawlenty. Since Rothman took over, several deputies who oversaw insurance, enforcement and banking have retired or left.

Former Commerce Commissioner Glenn Wilson, a career mortgage banker, has disputed that the agency was slow to respond to the mortgage meltdown that brought the nation's economy to its knees in 2008. Regardless, the pace of investigations, enforcement actions and the agency's profile have picked up under Rothman.

"I sensed an opportunity to reorganize and emphasize some things that could be done better," said Rothman. "We're responsible for protecting the public. We also want to make sure that business has an opportunity to succeed. There's a balance there. There are some bad actors out there. But the overwhelming number of Minnesota companies, 99 percent, are good citizens."

In recent months, Rothman, 49, was engaged in national negotiations with the nation's five largest mortgage lenders that resulted in last week's settlement over past practices which will provide up to $300 million to Minnesota borrowers in direct payments and refinancing relief.

He also has announced settlements, investigations and enforcement actions against numerous mortgage brokers, a crackdown on unlicensed payday lenders and ongoing actions against debt-collection agencies that were alleged to have broken the law.

Rothman was recommended to Dayton by Tom Borman, a business lawyer and investor, a former commerce commissioner and a key member of Dayton's campaign and transition team.

"Rothman has great business experience," said Borman, a Democrat. "He's taking over a department that was decimated. He's going to rebuild it. And the governor wants him to be strong on consumer issues, and also to support the good, job-creating businesses of Minnesota, and that's the balance you want. But the governor wants a more aggressive agency."

In addition to overseeing state-chartered banks and insurance companies, the Commerce Department licenses real estate agents and investment representatives. The agency oversees utility rate increases and broadband and telecom matters, and it's also responsible for setting up the new health care exchanges designed to give consumers and businesses more access and a competitive landscape for selecting health insurance under the Affordable Care Act.

"He strikes me as a thoughtful guy who is concerned about the protection of consumer rights," said Bert McKasy, a Republican who was commerce commissioner in the early 1990s. "He has represented financial service companies, and he knows what it takes to succeed. We have visited from time to time. I also have seen him reach out to Republicans for their ideas on the health care exchanges."

Rothman was a key aide 20 years ago to then-state Sen. Bill Luther, a Democrat, who worked successfully with Borman and McKasy in crafting bipartisan legislation that improved consumer rights, guarantees and capital standards for life insurance companies, in the wake of several national failures. The matter proved contentious at times with the Minnesota life insurance industry. In the end, the bipartisan coalition held, several Minnesota life insurance CEOs got behind the compromise legislation and the industry continued to expand profitably in the state.

Rothman's key appointments include:

•Steve Carlson, previous chairman of the banking and commercial department at Dorsey & Whitney, who oversees day-to-day operations at Commerce as well as heading the consumer protection and education unit.

•Bill Grant, the deputy commissioner of energy and telecommunications, was the executive director of the Izaak Walton League of America for 16 years and was a plain-talking proponent in the Midwest for utility regulatory reform, energy efficiency and renewable energy policies, some of which were adapted in Minnesota.

•Robert Moilanen, director of securities, was a securities and commercial litigator at Anthony Ostlund Baer & Louwagie who once served as a state prosecutor.

Blaine Shepherd, a veteran regulator, is the acting commissioner of the insurance division, replacing Jaki Gardner, who left last year to run an Illinois insurer.

•William Horlitz, acting deputy commissioner for financial institutions and a veteran federal bank examiner, succeeded the retiring Kevin Murphy last year.

In the mid-1990s, Rothman worked in California on the liquidations of Mission Insurance and Executive Life, two of the biggest U.S. insurance disasters. He later represented insurers as co-chairman of the financial services practice at Winthrop & Weinstine, where he was a partner. He took a significant pay cut, to $108,000, when he took the Commerce Department post.

"I had wanted to do a little more public service in my career and this was the chance," said Rothman, who is married to a professional musician and has three kids. "Hopefully, we will do great things."

Neal St. Anthony • 612-673-7144 • nstanthony@startribune.com

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