A former prosecutor of financial fraud cases was named Tuesday by Gov. Janet Napolitano to be the next superintendent of the Arizona State Banking Department.
Felecia Rotellini was an assistant state attorney general for 13 years before becoming an assistant superintendent at the banking department earlier this year. Her appointment is subject to Senate confirmation.
She will replace Richard Houseworth, who has held the post since 1993. He is retiring at the end of this year.
Rotellini has been involved in investigating and prosecuting high-profile cases.
Nearly a decade ago, for example, she succeeded in forcing Tucson’s largest collection firm to close its doors. Rotellini said the company was guilty of deceptive practices.
More recently she got one of the nation’s largest accounting firms to pay a $750,000 penalty to settle claims that it helped mislead investors about the financial condition of UDC Homes, a company that went bankrupt.
Rotellini said UDC claimed — and Arthur Andersen, its accounting firm, did not dispute — it would have pretax income of $16 million in 1995 and $18 million in 1996. But she said the evidence showed that UDC posted losses.
In an interview with Capitol Media Services, Rotellini said much of the focus at the agency will remain on the areas that generate the lion’s share of consumer complaints: Mortgage brokers, mortgage bankers and escrow agents.
Rotellini said the transition from investigator to regulator is logical because it will allow her to focus on creating and implementing policies at the banking department that prevent problems from getting to the point where the state has to go to court.
State law requires the banking superintendent to have at least five years as an executive at a financial institution or that much background in examining financial institutions at a state or federal level.
The law also gives the superintendent a fixed fouryear term, a provision given to only a handful of state agency chiefs designed to protect them from being dismissed by a governor for political purposes or replaced when a governor is elected.
Houseworth said he does not know what, if anything, he will do next, as it would be improper of him to make job inquiries while he is still a state regulator.
But he noted that this is the fourth full-time position he has had since he "retired’’ after leaving what was The Arizona Bank after 30 years in 1987. That included his appointment by then-President Ronald Reagan as a director of the Export/Import Bank, followed by a stint at the Inter-American Development Bank.