Sunday, April 20, 2008

Women as Regulators

by Tanta on 4/20/2008 08:31:00 AM

Like anyone else with even a modest dash of common sense, I am not sure I really want to wade into the issues Yves raises in this post. But having been personally wished on the inoffensive British--who have as far as I know done me and mine no particular harm since at least 1812, if you don't count LIBOR and Diana--as a final rhetorical fillip, I feel as if I were already in one of the pitfalls, so there's limited upside to trying too hard to avoid them.

Yves is, of course, talking about Wall Street. Even now, after the last several years of more than usually unholy more than usual alliance between the mortgage industry and the investment banks, it is still true that only ever a small slice of mortgage industry people have any direct contact with the Street and its culture. Some of those who do take to it immediately, rather like those suddenly exuberant freshmen at a large and urban campus, who shake off the persona of small-town straight-A valedictorian and throw themselves into the libertine ways of the university--beer! everywhere you look!--without looking either backwards or forwards all that carefully. Others cringe in horror and are only too grateful to return to their quieter Main Street offices, where the unglamorous but reassuring touch of the files and hum of the worker-bees steadies a mind reeling from too many bright young aggressive deal-makers flicking their laser pointers at too many garish hockey-stick-laden PowerPoint slides.

The other 90% of the industry never left Main Street to begin with, and hears these snippets of gossip and bullet-point about how we're now writing loans to "Wall Street standards" with bemusement and amusement in roughly equal measure. Depending on the sense and sensibility of local management, by and large most of the rank and file roundly ignore such things and get on with their days. Except for the very young, all corporate workers have lived through enough management fads and buzz-word fashions to know that this, too, shall pass.

"They're not going to re-engineer us, are they?" asks my administrative assistant, leafing through the pile of stuff I've tipped out of my briefcase on return from the latest secondary marketing conference.

"No, I don't think so this time," I mutter, staring at 283 unread email messages. "But if they do, I've still got all the stuff from last time in the lower left drawer of my credenza. If it's not worth doing, it's certainly not worth not plagiarizing."

I shall posit that it has simply been a different trajectory for women in the mortgage business, and retail banking generally, than it has been for our sisters on Wall Street. Not only have there been more of us on Main Street; we did not, by and large, enter this business to "pursue careers." Most of us of a certain age simply "got jobs" in an industry that has always needed a lot of pink collars. Generalizations are of course rightfully fearful things, but I am inclined to think there's a reason why so many laid-off mortgage middle managers are heading for nursing and teaching, and it has nothing to do with especially "nurturing" personalities or gender identities. We have always been of that pink-collar sisterhood, even as some of us broke a bit past the top of its salary band and even found our well-coiffed hair flattened against the glass ceiling.

That is, indeed, why so many of us have been held in such contempt--open or camouflaged--by the senior managerial class and those wannabees who adopt its favored postures. I have never entered a mortgage operation--a bank or a mortgage banking firm--as employee, client, or consultant, without encountering manifestations of that "taint" carried by those who know, fully and in detail, how the sausage is actually made. Precisely because, whatever their current job is, the tainted ones used to make sausage.

I am, in fact, one of the very few women I know in this industry who was hired directly into a "professional" position (writer of policies and procedures) based almost solely on academic credentials. At that first job of mine, the underwriting manager was a woman--who had started years and years ago as an underwriter trainee. The production manager was a woman--curiously enough, also one with a humanities degree--who had begun as a lowly FHA loan originator twenty years before. The female loan sale and pricing manager had started on the teller line, as had the female servicing manager.

They were--I became--the accidental managers of the business. Having one as a production manager was rare then and is still rare now: if you took all the women managers in the mortgage business and separated out the ones in processing, underwriting, closing, post-closing review, and servicing, you wouldn't have many left. Some women have certainly risen to the heights of senior management, but nearly all of them did so with responsibility for the "back office" functions out of which they arose. Back office functions that are, crucially, cost centers, not profit centers.

In an industry that has always--to its own detriment--most empowered those who "bring in the bacon," this has generally functioned to severely curtail the power these women can exercise in the corporate culture. They know how to do things; they get things done; their orientation is nearly always "conservative": they limit the risks, double-check the entries, enforce the rules. They often have the largest staffs, while also having the largest number of low-paid, less-educated people who are first in line for any layoffs going. They are "costs"; they get "cut."

To a mind trained to a certain traditional gender stereotype--and we have our share of those, alas--female mortgage managers are the gatherers and domesticators, and males are the hunters and risk-takers. It is no wonder that a culture that does not value such things as raising reasonably well-behaved children as an accomplishment does not value the risk-limiters much. It is the rhythm of these meetings, and has been for a long time:

He: My branch generated $45MM in gross revenues this quarter!

She: Well, my underwriters tried to stop you.

To return to Yves' suggestion, there's certainly a lot to be said for regulators recruiting from this pool of women mortgage managers. We know where the bodies are buried. We know how they got to be buried. We know how they died. We've got the reports in our lower-left desk drawer.

The thing is, I see two sides of this. Certainly a passel of middle-aged women who earned their stripes managing mortgage back-offices would be more effective, probably by an order of magnitude, than the pool of examiners the regulatory agencies mostly currently have. Quite possibly they might feel sufficiently vindicated at this point--we did, you know, tell you where this was heading while you were busy not listening--to exercise their new regulatory empowerment with sufficient hard-headedness to overcome both senior management and political-appointee resistance. But that's the other side of this: senior management at the banks and political appointees at the agencies aren't known for hanging their heads, admitting their faults, and going along meekly with the house-cleaning.

I don't know that women are going to be able to fix that; men are going to have to demand more of--and give less to--the hunters and risk-takers. My own personal experience suggests that while there's a certain passing pleasure in being able to say "I told you so," no one is less welcome in the meetings than those of us who told you so--and who took the damned minutes to prove it, too.

It does leave me with a lingering sense that now that the party is over, we are casting about for house-cleaners in the usual place that domestic help is found. That is not, of course, what Yves is saying at all; it is merely the context in which the other edge of the sword cuts. For it is surely not young women just entering the business we want here--of course we want them for other things, but we're not just looking for women, we're looking for women veterans. I profoundly doubt that the few on Main Street who have achieved senior management status will want to leave for a job as a bank regulator if they can hang on to the job they have. You're talking about middle-aged women just below the executive ranks, here. Should there be some real effort to recruit us to the ranks of regulators, how do we prevent regulatory work from becoming yet another pink-collar cost-center?