WASHINGTON — If Mitchell Glassman visited your town sometime in the past 35 years, it probably wasn't for a good reason.
As a veteran of the Federal Deposit Insurance Corp.'s bank-seizure arm, Glassman has been involved in nearly 1,000 takeovers, more than three times the current total resulting from the financial crisis.
He started as a roving agent, traveling between failed banks with nothing more than what would fit in a Toyota station wagon. As he climbed the agency's ladder, he saw technology transform how failed-bank deals — once a manual process involving snail mail — were done. Through it all, he was attuned to the not-always-warm reception a closing team could receive.
"There were communities where there had been multiple failures, where obviously our coming had the look of the grim reaper," said Glassman, who retired Dec. 3 as head of the FDIC division of resolutions and receiverships.
But in his 10 years as division director, no period was as intense as from late 2008 to now. In the first eight years of the millennium, 32 institutions failed. Since then, 314 have done so.
"I was driving around in a nice, easygoing Chevrolet. When the middle of 2008 hit, I thought I was in a Nascar doing 160 miles an hour," Glassman said.
It was not just the weekly routine of resolving banks that put his job in overdrive. Much as it always has in a crisis, the agency has shouldered an enormous weight of criticism — for seizing certain banks, for not seizing others and for picking the winners and the losers in its auctions.
"It's kind of like playing musical chairs. If you're the one that's left standing, it doesn't matter whether the music stopped," he said. "The fact is, you're the one who has got to take the criticism. You're the one who's got to answer for what's going on."
Glassman was among the regulators pilloried at a House hearing in January led by Chicago-area lawmakers on the closure of Park National Bank, which was loved in its community. The legislators, as well as spectators, complained that regulators were too quick to close community institutions while the industry's largest banks were bailed out.
The FDIC's objective is to seal a deal with an inheritor bank that over time can placate community concerns. In Park National's case, he said, the agency almost did not find a buyer, meaning depositors could potentially have lost money.
"What we were hearing, really, was the fear factor of whether or not the new institution was going to still have a connection with that community," he said. "We felt good that we found another buyer and … the depositors were taken care of. But … I think we're always going to be doubted.
"We are obligated to follow the law. I'm sorry for any bank that fails. The best failure is no failure."
Before being called on to answer such questions, Glassman was just a man on the beat. After a short stint at a bank owned by his family, he found part-time work at a temporary bridge bank established by the FDIC to resolve a failed institution's deposits. That led to his being recruited to become what then was called a "liquidator-at-large." The first failure he handled was in 1975 at the Clearing Bank, outside of Chicago.
"I was a low man on the totem pole," Glassman said. "We didn't have big regional offices like today. Where you were put is where you called home. I didn't stay in Chicago for more than six or seven weeks and had to pull up stakes and move to Milwaukee. You didn't know when you were going to be called."
The regimen took a toll on his family, he said.
"I still feel guilty for the missed birthdays and the first tooth. I had to leave my poor wife in San Diego with a newborn while I went off on assignment," he said. "There were many times you missed out on things. There were also many times where you busted your butt to get back home."
Glassman rose through the ranks to become the division director's deputy and then its chief.
As a senior official, his impact on the FDIC was perhaps felt most in an enthusiasm for technology. Glassman was one of the first to use a cell phone and a BlackBerry, and his example often led to a new gadget's being used widely at the agency.
"Before we had cell phones, there were times that, in order to let the closing team know that it was OK to come into a bank, they had to stand by a pay phone and keep people off of it so we could have the means to call them and say, 'It's time.' "
And after decades of a paper-based system of selling failed banks, Glassman spearheaded the agency's use of Web-based auctions around the turn of the millenium. Rather than potential buyers flying around the country to examine targets, and submitting bids through overnight mail, bankers could participate in auctions with the click of a mouse.
Yet that system has also been the subject of criticism. Not only have market participants complained about the types of deals the agency selects, and the types of buyers it prefers, but many have said the agency should disclose more about the bidding process, including a quicker release of losing bids to the public.
"We've got the appropriate balance of protecting the people who do participate in the process" and providing information to "those who still want to know what the value[s] are of the winning and losing bids," Glassman said.
At the outset of the wave of failures, the resolution division had about 200 employees; it had to rely on temporarily hiring retirees as well as contractors. Today, with the additions of satellite offices in California, Illinois and Florida, along with new staffing at the division's headquarters in Dallas, the head count has ballooned to 2,200.
Though Glassman said he never doubted the agency's ability to respond, he said the division was spread thin early in the crisis. "I was very concerned about people burning out," he said.
Many of the division's new hires have known all along that their appointments are temporary. This, Glassman said, will help the agency unwind operations smoothly as failures stabilize. The slowdown phase after the savings and loan crisis in the early '90s was not easy; a painful downsizing left morale issues for years.
"When it's time to wind down, we're hoping that a lot of our employees will eventually get back into the industries they came from," he said.
For Glassman personally, the wind-down has already begun. Though he is considering taking a private-sector job, he said he expects his Friday nights to be considerably quieter.
"My stress level will obviously go down; I may actually try to get to bed a little bit earlier," he said. "I'll probably get hooked up with the same subscription service that any other mortal or reporter can get ahold of. I'll probably still track it."
Register or login for access to this item and much more
All Bank Investment Consultant content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access