What Is a Commissioner of Banking?

A commissioner of banking is a regulatory director that oversees all of the banks in a state. In addition to enforcing regulations and leading investigations into wrongdoing, the commissioner of banking supervises the liquidation of insolvent banks and performs other administrative functions.

Key Takeaways

  • In the United States, the commissioner of banking is appointed by a governor or state assembly to oversee the state's banks.
  • The commissioner of banking is responsible for administering and enforcing the banking and financial policies and regulations of a state.
  • In addition, the commissioner will aid in the liquidation of failed banks, issuing charters to new banks, and establish licensing criteria for individuals in the sector.
  • Banking commissioners have authority over all financial institutions within a state, which include state-chartered banks, savings banks, savings and loan associations, credit unions, trust companies, and mortgage lenders.
  • The responsibilities of a commissioner of banking include monitoring the strength and fairness of a state's financial services marketplace, mandating examinations of each financial institution and licensed lender and broker to ensure compliance with state and federal laws, investigating consumer complaints, and assessing administrative fines.

Understanding a Commissioner of Banking

A banking commissioner serves a similar role as the insurance commissioner, and those who hold this office may have political aspirations. They are typically regarded as the chief executive and administrative officer of a state's banking or finance department.

A commissioner of banking is responsible for the administration of state financial policies and is usually the final state authority in the banking industry. In most states, the commissioner is not an elected position but is appointed, usually by the governor.

Banking commissioners have authority over all financial institutions within a state. Those institutions and companies may include state-chartered banks, savings banks, savings and loan associations, credit unions, trust companies, mortgage lenders, mortgage servicers, mortgage brokers, mortgage loan originators, mortgage loan processors, mortgage loan underwriters, consumer finance companies, check cashiers, money transmitters, and tax refund anticipation loan facilitators.

Responsibilities of a Commissioner of Banking

A banking commissioner may be responsible for chartering, licensing, and regulating financial institutions and companies operating within a state. A banking commissioner may also be tasked with monitoring the strength and fairness of a state's financial services marketplace through the supervision and regulation of financial service providers in that marketplace. They may also be responsible for administering a complaint resolution process that facilitates communication between consumers and the various regulated financial entities. 

A commissioner of banking may also mandate examinations of each financial institution and licensed lender and broker to ensure compliance with state and federal laws and regulations. They might also have the authority to investigate consumer complaints, hold public hearings, assess administrative fines, and order restitution if state laws are violated by institutions under the commissioner's jurisdiction.

A banking commissioner's office may also be responsible for making sure that financial service providers operate in a safe and sound manner, industries function as a coordinated system considering the broad scope of the financial services arena under its jurisdiction, and consumers that seek services from licensed financial service providers are protected from unfair or damaging practices.

Other responsibilities that a banking commissioner would have might include processing and reviewing applications by depository institutions for new charters, branches, relocations, plans of acquisition, mergers, bulk sales, stock conversions, and auxiliary offices. In addition, they might be responsible for the examination of state-chartered commercial banks, savings banks, and savings and loan institutions and for enforcement actions involving these depositories.

Special Considerations

If you are in need of the services provided by the office of the commissioner of banking in a particular state, the Consumer Financial Protection Bureau (CFPB) provides a list of the regulators in each state with their phone, fax, and website. A simple online search of a state's "commissioner of banking" will also provide links to a state's regulator.

Some states, such as New Jersey, have a combined commissioner of banking and insurance, which regulates a variety of areas, including banking, insurance, and real estate. Depending on your needs and state, you may need to contact a specific commissioner's office or just one.