N.Y. Regulator Proves She's Not Just 'Acting'

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In the three years since her former boss left to become New York State's top insurance regulator, Elizabeth McCaul has filled in as the state's banking superintendent and waited for the word "acting" to be taken out of her title.

She has overseen the state's 3,500 financial institutions, listened to the seemingly endless complaints of financial executives and consumer groups, and occasionally placated political bosses in Albany and Washington. In addition she has promoted, with the zeal of a recent convert, the virtues of the state banking charter.

When Neil D. Levin, who had been a colleague of Ms. McCaul's at Goldman Sachs in their pre-regulatory days, left the State Banking Department in 1997, rumor had it that she would soon follow and continue as his lieutenant -- at the Insurance Department. There was even talk that the two agencies would merge, with Mr. Levin taking over as some sort of super-regulator.

But the idea of regulatory convergence soon died, and Ms. McCaul remained acting superintendent of banking month after month.

In that role she surprised everyone with her leadership ability, and in December she finally received Gov. George Pataki's nomination to hold the job for real. The state Senate is expected to approve her appointment this session.

Bankers in New York seem pleased with the decision. "The Pataki administration has been in office for nearly six years," says Michael P. Smith, president of the New York Bankers Association. "Elizabeth has been in that department for that entire period of time. We have extended experience with her, which has led to openness and dialogue. The department is always amenable to hearing our views. She's very energetic, she enjoys her job, and she's not afraid to speak her piece. That's good for the …