Yellen to appoint senior Fed official to lead main banking regulator

WASHINGTON – Treasury Secretary Janet Yellen is considering appointing one of the Federal Reserve’s top big bank supervisors to become the acting currency controller, overseeing the nation’s largest financial firms, according to a person close to the Federal Reserve. folder.

Ms Yellen is expected to appoint Michael Hsu, associate director of the Fed’s banking supervision and regulation division, as the first deputy supervisor, the person said. After joining the Office of the Comptroller of the Currency, Mr. Hsu would then become Acting Comptroller.

Ms Yellen is expected to make the announcement in the coming weeks. Blake Paulson, the current acting controller, will remain at the agency as assistant controller and chief operating officer, the person said.

Currently, Mr. Hsu helps lead the Fed’s oversight of the largest financial institutions, including companies such as

Goldman Sachs Group Inc.,

Morgan stanley

and

Wells fargo

& Co. He was also instrumental in responding to implosion of Archegos Capital Management. He is an associate director, one of the most senior positions in the central bank.

The OCC, which has 3,500 members, is an office independent from the Treasury. It oversees approximately 1,200 banks with combined assets of approximately $ 14 trillion, or two-thirds of the total of the US banking system. It has supervisors stationed at major U.S. financial firms, which makes the supervisor one of the most powerful regulators, which also include the Fed and the Federal Deposit Insurance Corp.

It was not immediately clear who the Biden administration planned to appoint to serve as comptroller on a permanent basis. At least one person, former Fed Governor Sarah Bloom Raskin, turned down an offer to run the agency, according to people familiar with the matter.

The law gives an administration unusual latitude to hire an interim director from outside the agency, who does not need to be confirmed by the Senate or even work in the government.

A series of interim administrators have led the BCC over the past year. In recent weeks, Democrats have stepped up calls for the Biden administration to bring in its own interim civil servant after Mr. Paulson defended a Trump-era settlement Democrats are considering rescinding, known as the “real lender” rule, through a legislative tool known as the Congress Review Act.

This appointment makes it easier for regulators to agree on key policy priorities, such as how to revamp low-income lending rules under the Community Reinvestment Act and how to approach fintech companies seeking to obtain banking charters or to form partnerships with existing banks.

In January, Michael Barr, a former student of the Obama and Clinton administration who heads the School of Public Policy at the University of Michigan, was the main candidate for the position of Controller. Some progressive Democrats have urged the administration to install Mehrsa Baradaran, an Iranian-born law professor at the University of California, Irvine and author of “The Color of Money: Black Banks and the Racial Wealth Gap.”

Write to Kate Davidson at [email protected] and Andrew Ackerman at [email protected]

Copyright © 2020 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8

Leave a Reply

Your email address will not be published. Required fields are marked *