Departing Nevada financial regulator praised, criticized

Kevin Rademacher

Monday, July 28, 2003 | 11:24 a.m.

Scott Walshaw, commissioner of the Nevada Financial Institutions Division, announced his resignation Friday -- but Walshaw and state officials are not commenting on the reasons behind his departure.

Walshaw, who held the post for 20 years, is expected to continue working through the Oct. 15 effective date of his resignation.

The announcement came in a statement from the state Department of Business and Industry, which oversees FID.

In the position, Walshaw is responsible for the licensing and supervision of all state-chartered banks, savings and loans, credit unions and thrifts. He also guided the regulation of mortgage lending and escrow companies, collection agencies, debt adjusters, money transmitters, trust companies, installment loan companies and all check cashing and payday loan companies.

Walshaw makes $80,000 a year.

Walshaw could not be reached for comment and the Department of Business and Industry would not comment further on the resignation, citing confidentiality laws governing personnel matters. A spokesman for Gov. Kenny Guinn referred calls to the Department of Business and Industry.

FID had been under fire in recent years for a series of collapses in the mortgage lending industry, including the failures of Harley L. Harmon Mortgage Co. and Interstate Mortgage and the recent placement of Global Express Capital Mortgage into receivership.

Ted Wehking, executive vice president of the Nevada Bankers Association, said Walshaw had a difficult job.

"I thought, overall, he was doing a very good job," Wehking said. "When a couple of mortgage companies went, no matter who was in that position was going to take some bullets. Statutorily, he was doing everything he could do."

In April, a Clark County District Court judge sharply criticized the FID for its failure to act on complaints against Las Vegas-based Vestin Mortgage Co. by developer Howard Bulloch.

Bulloch filed a complaint against the FID for its failure to act on the alleged mishandling of two loans he received from Vestin. District Court Judge Sally Loehrer ordered a new investigation, and three possible violations were found.

James Olson, a partner with Rawlings, Olson and Cannon, which represent Bulloch, said the criticism could be tied to Walshaw's resignation.

"I would only be speculating, but obviously Judge (Sally) Loehrer was very displeased with FID," Olson said. "Her remarks about the lack of investigation and the whitewash of Vestin may have been a contributing factor."

Vestin has denied wrongdoing in the Bulloch court case. In March, Bulloch won a $5 million judgement against Vestin in U.S. District Court. The company plans to appeal.

In a separate FID complaint against Vestin over the Bulloch allegations, a June 16 hearing was delayed, and a new date has not been set. Again, in the FID case Vestin has denied wrongdoing.

The state was ordered to pay Bulloch $187,000 in attorney's fees for the complaint brought against the FID.

State officials declined comment on why Walshaw is staying on the job until Oct. 15 -- which could be an indication he's not being forced out since officials being fired typically leave immediately.

In the recent legislative session a bill was passed removing mortgage oversight from the FID, creating a new division.