Richard Fulkerson retired last fall after 10 years as Colorado's top banking regulator. There was just one bank failure, in 1998, during the tenure of the taciturn Wyoming native.

Fulkerson came to Colorado in 1995 after 10 years as a savings and loan regulator, including the peak of that industry's crisis. His departure in November - just as storm clouds gathered over Colorado's banking industry once again - had been planned for years, he says. Rather than go into full-blown retirement, however, he's joined consulting firm Patten, MacPhee & Associates.

Fulkerson spoke to the Rocky in January about the state of the industry. Some excerpts:

On his seemingly sudden retirement, which occurred just a few days after it was announced by the Department of Regulatory Agencies, and his new job:

It had always been my plan to retire when I was 55, and fortunately, the PERA retirement system allowed for the purchase of years of service, which was a prudent investment at the time. The timing may appear unfortunate, given the recent decline in the banking industry, but my plan was set in 2003. I considered delaying it, but to an extent, you get burnt out in a job, and the people at the Division of Banking are so good, they deserve a fresh face. I think there's a shelf life for commissioners.

My intention was to just sit on the sidelines awhile and just refresh and recharge, but get re-engaged in some way - like Habitat for Humanity. I had known Les Patten for years. He contacted me, and I'm going to work on a contract basis, hopefully not full time. I found getting up at 6 in the morning, putting on a coat and tie, and heading to work really wasn't such a bad thing after all.

On the differences and similarities between today's banking-industry problems and the savings and loan crisis of the 1990s:

Primarily, the problem I dealt with was a savings and loan industry with limited powers and inherent structural weaknesses. It wasn't (home) loans that caused their problems. It was the need to be in much higher-return investments to offset the 7 percent to 8 percent they were paying on deposits. Regulators were ill-prepared for the risks. The institutions that were conservative and could live with a negative spread for a while survived.

In this crisis, it really hit the large institutions - the Wachovia Banks and WaMus - who were heavily invested in subprime residential lending and collateralized mortgage obligations. Community banks, in Colorado and in the nation as well, had been left out of residential lending, so they pursued other avenues and were more diversified, and to this point in the cycle, have been relatively insulated from the problems we're seeing at the national level.

On the root cause of today's problems:

(Home loans) have always been considered the easiest loan to make, and the safest loan. But in an effort to put as many people as possible into a home to strengthen society, we stretched the credit process to the point where origination has detached from collection. Anyone can make a loan if they don't care whether someone else has to collect. At the highest level of Wall Street, there was a lack of understanding of the risk of mortgage pools and how they'd react in a downturn.

It's the difference between someone doing the right thing because they know someone else will look at it in 12 to 18 months, versus someone saying, 'How much can we get away with before it blows up and we walk away.'

On the charge, by some bankers, that strict regulators are making things worse by clamping down on commercial real estate lending:

In 2006, guidelines were issued that didn't preclude commercial real estate concentration, but said if you exceed (guidelines), higher standards would be expected, including a higher level of capital to offset the risk and stronger monitoring of the commercial real estate portfolio. For those banks in the higher end of the threshold - and there are a number of Colorado banks with high concentrations, because that's where the business is - as the market slows, their ability to renew those loans is restricted. It can't help but have a chilling effect on the real estate market. Good borrowers are going to have a harder time finding financing right now. It's dangerous to make generalizations, because banks are still making loans, but they're making good loans, and more conservative loans. That shouldn't be viewed as the credit markets drying up. I think we're getting back closer to where we should be.

WHAT THEY'RE SAYING

"It has been a real honor to serve on the board with Richard. He is professional, practical, and efficient. He was quick to acknowledge responsibility when there was a problem. He championed his staff at all times. His intelligence, integrity and sense of humor will be hard to replace."

Mary Reisher FirstBank, chairwoman of the banking board

"I can say that as a former federal regulator with the OCC, and in my many years working with federal and state regulators in my representation of financial institutions, Richard Fulkerson was in my experience at the very lead of the pack as an outstanding regulator and individual. He was not only extremely knowledgable, but he demonstrated time and again a wise guidance for Colorado's state banks that went well beyond mere competence."

Bob Vinton attorney, Fairfield & Woods