The Price commission held an abbreviated meeting today because Commissioner Merlene Bailey Martinez had to leave early to attend a funeral in Independence Village. But the session did roll for one hour and 15 minutes with follow up testimony from Franklin Magloire, the manager of projects and appraisals for the period in question. Magloire was asked to return with files for big loans and so called sensitive loans to see if they had benefited from appraisals. But in reviewing those, he also discussed the demise of the DFC between the years 2000 and 2004 as the corporation's portfolio ballooned, and so did its default ratio.
Franklin Magloire, Manager of Projects
"The DFC at one time was really a model bank. Our ratio for arrears and non-performance, arrears was like between three to four percent. We were bordering on fifteen percent which is the standard we had set for ourselves and to see an organization move from that kind of level, because the non-performance ratio was moving up in leaps and bounds.
I was concerned that our established policies, guidelines, were being waived too frequently. I was concerned, and there was reasons for it, because with regards to housing, you had a whole inventory of housing that we were trying to move and you so can't want to sell something and ask for equity so you found that we started saying that we'll finance the whole thing, 100%. When you do that you also lose some control because the person moving into the building really has no equity at stake and we experienced persons moving into buildings, staying in there for a few months, not paying anything, and when you pressure them too much they simply walked off the building.
To my mind, the organization was heading, and had been already involved too much, in to areas that we were not cut out for. We were cut out for providing developmental credit. We were cut out for providing student loans, for residential mortgages and that kind of thing. We had that kind of expertise. We did not have the expertise in construction projects. That should have been left to the private sector entirely."
David Price,
"You yourself didn't bring these concerns to the attention of management or board?"
Franklin Magloire,
"I did not. Primarily because I knew that it would not have been heeded. As I mentioned in earlier testimonies, management had no discretionary whatsoever."
David Price,
"Were there people of similar views to you at the DFC at the time?"
Franklin Magloire,
"Within the organization? Certainly, everybody in DFC had a concern. I need to mention that prior to now, longevity of staff at the corporation was something that was remarkable. You had people working there for thirty years, people working for fifteen, twenty years. Those same persons had seen a DFC that had almost gone bankrupt, had worked with the organization to bring it to the high standard that it had reached prior to now. Those same persons were concerned. Management was concerned that our portfolio was deteriorating significantly."
The hearings were suspended at 11:15 am and will continue on Tuesday, again with testimony from Magloire.
