Help wanted: U.S. über-bank regulator
Washington, D.C.-based institution seeks new leadership after near-brush with death and potential future of irrelevance. Strong executive skills required to manage merger with failed rival. Banking and regulatory experience are essential. Must love consumers. Lobbyists, academics need not apply.
That’s not how the White House will recruit its replacement for the Comptroller of the Currency to replace John Dugan, who is leaving next month. But maybe it should. Given the new OCC chief’s expanded portfolio, a broad range of experience is indispensable. First up is restoring the reputation of a regulator that’s been charged with lax oversight of banks before the financial meltdown and having scant interest in consumer protection.
Next is helping implement myriad new provisions of soon-to-pass financial regulatory reform, including the absorption of the smaller Office of Thrift Supervision, the regulator largely credited with missing the failings at American International Group’s financial products arm and lenders Countrywide, Washington Mutual and IndyMac. The comptroller will also sit on the new systemic risk council with the Treasury Secretary, Federal Reserve chairman and other financial regulators.
So who’s up for such a broad task? That depends. If President Barack Obama is looking for a candidate already intimately involved in the transformation of the nation’s regulatory architecture, he could go with Daniel Tarullo, the Fed governor in charge of bank supervision. The former Georgetown professor and author of a book on capital standards served in the Clinton administration.
But why would he want the job? Although the OCC will pick up the powers of the thrift regulator, oversight of the very biggest bank holding companies will be the purview of the Fed. In that respect, the OCC could be considered a step down for Tarullo.
That paves the way for an up and comer, such as Richard Neiman, New York’s top state bank regulator since 2007. Neiman knows Washington, too. He worked at the OCC earlier in his career and serves on the congressional oversight panel for the bank bailout. Even better, Neiman has actual private sector experience as head of TD Bank USA.
True, a business background would make him an anomaly among Obama appointees. But it would help him understand the real-world implications of his decisions. Whatever the choice, the White House needs to get cracking on defining, and filling, the position to achieve its hoped-for transformation of the financial regulatory system.