ANDY ROSEN
Daily Record Business Writer
November 8, 2007
Thomas E. Perez, secretary of the Maryland Department of Labor, Licensing and Regulation, wants to raise the profile of the agency that he says is one of the state’s key communicators between citizens and industry.
Appointed to head the department in January, Perez, 46, has been an outspoken advocate for homeowners during the recent spike in foreclosures and the collapse of the subprime mortgage market. He also issued the report that helped cement Gov. Martin O’Malley’s position that the horse racing industry needs slot machines to survive.
But in an October interview with
The Daily Record, Perez — a former Montgomery County Council member, federal civil rights prosecutor and civil rights lawyer — said he still has much to do.
TDR: DLLR is an expansive organization with many different responsibilities. To you, what is the common thread that ties it all together?
Perez: DLLR is indeed an octopus. We have many tentacles and what ties the octopus together is protecting and empowering Marylanders in so many different ways. We protect Marylanders by ensuring that the elevator they go up [in] is safe, by ensuring that the amusement rides they ride are safe, by inspecting railroad track. We protect workers by ensuring that the workplace is safe by enforcing occupational safety and health laws. We empower workers by providing training so that a worker can move from a good job to an even better job. We protect consumers by going after unscrupulous lenders or unscrupulous contractors or unscrupulous real estate agents. And so really, I think that the glue that ties the octopus that is DLLR is the glue of protecting and empowering Marylanders …
If you asked the average person about DLLR, if they knew anything, the only thing they knew was that we were the elevator people. And yes, we are the elevator people, but we’re so much more …
… We’re a consumer protection agency. And if people are victims of a mortgage scam but they don’t know to call us, then we’re not doing our job as effectively. And so, we’ve got to get the word out better that we’re open for business, whether it’s the living wage context, whether it’s the unemployment context, whether it is the mortgage fraud context or whether it’s the home improvement context. We’re open for business and we can protect and help Marylanders in a wide variety of ways. That was the big weakness I observed, that we were not sufficiently conspicuous in the community, and we’re doing a lot to change that.
TDR: What are some of the issues facing the racing industry today that may not be addressed during the debate over slot machines? And, can you think of any other issues that may come up during the session that will affect the industry?
Perez: Well … slots is the 600-pound gorilla in the room. I mean, the racing industry is competing for survival with one hand tied behind its back, and that is plainly and simply because of slots. The revenue from slots that is being generated in [nearby] states is being used to subsidize the horse industry in those states, as well as the horse breeding industry, and that, in turn, has created an unlevel playing field and has transformed Maryland from the envy of the mid-Atlantic to a state that’s fighting for survival.
Some people say, ‘…some things were great 50 years ago, maybe their time comes.’ I really think that this is not about sentimentality and
Seabiscuit. This is about survival. This is about preserving anywhere between 15,000 and 20,000 jobs, including farm jobs.
TDR: Your department’s literature talks a lot about demand-driven development. Can you describe how this differs from traditional work force development and affects the interplay with economic development?
Perez: Having a trained work force is the linchpin to the governor’s economic development strategy. If you don’t have a well-trained work force, you can’t attract the businesses that are the key to our economic survival. And so, the governor has made work force development one of the top priorities, and the lieutenant governor has been very passionate in talking about this issue, as well. And as a result, when we talk about demand-driven, what we have been doing is ensuring that we have a very precise understanding of the demand needs of the various sectors. Because if we’re producing, in our educational systems, dozens and hundreds of widget makers, but there are no demands out there for widgets, we are misallocating our resources.
So in the health care sector, we have developed a very acute understanding of what our needs are: How many nurses do we need? How many doctors do we need? How many phlebotomists do we need? How many allied health professionals do we need? And so, we have a very good sense of that in a number of industries. We need to get a better sense of that in some other industries. We also need to get a better sense, and we’re in the process of doing this, of the supply of labor that currently exists. And by that I mean: We need to understand, better than we currently do, the demographic characteristics of people living in Maryland.
TDR: Can you describe the state’s role in regulating banking and explain how it compares to other states?
Perez: Maryland has an enormously important role in protecting the safety and soundness of our financial institutions and in protecting consumers in the home mortgage and other contexts. Seventy percent of the loans that are issued in Maryland are issued by Maryland banks or other financial institutions that are covered under Maryland law. And so what that means is that our Division of Financial Regulation is really the front line in protecting consumers and ensuring a level playing field in the home lending context. Our Office of Financial Regulation is the front line in looking at Maryland chartered banks and related institutions to ensure that they are, again, operating properly.
What we saw in the S&L crisis of the late ’80s was, again, an illustration of the importance of having effective regulations in place. And the governor firmly believes that effective regulation and effective consumer protection go hand in hand. They’re not mutually exclusive.
That’s a huge philosophical difference between Martin O’Malley and Bob Ehrlich. Bob Ehrlich believed that regulation was bad. It created a “bad business climate.” You talk to businesses [that] are playing by the rules, and they will tell you that when you don’t regulate, you are simply rewarding bad behavior. And, sound, effective and fair regulation and sound, effective consumer protection go hand in hand; they’re not mutually exclusive. And we can have a sound business climate and important and critical consumer protection at the same time, and that’s precisely what we’re working toward in the mortgage context and in other financial contexts.
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