Two of President Trump’s nominees to key financial regulatory positions were reported out of committee and await consideration by the full Senate — despite concerns from Democrats that both candidates are too close to the financial industry, which they will be regulating.
Randal Quarles has been tapped to be the Federal Reserve’s vice chairman for supervision after a career as an investment manager. The vice chairman for supervision is a newly created position at the Federal Reserve that was developed in response to the financial crisis. He was approved by the Senate Banking Committee panel hearing by a 17-6 vote. He replaces Stanley Fischer; his departure next month would have left the seven-member Fed Board down four members.
Joseph Otting, former chief executive of Pasadena’s OneWest Bank, also is in consideration by the Senate for the job of Comptroller of the Currency — despite objections that OneWest’s foreclosure practices were overly aggressive — and his panel hearing was more narrowly decided by a 13-10 vote.
The Comptroller has broad regulatory powers over federally chartered banks, and Democrats are particularly concerned that Otting will simply not be a strong advocate for the American consumer.
“While I appreciate both nominees’ willingness to enter public service, I do not think either nominee is the person we want in these important roles as our financial watchdogs,” Sen. Sherrod Brown (D-Ohio) said before Thursday’s vote.
“We’ve made a lot of progress in the seven years since we passed Wall Street reform, and the last thing we need are people at the Federal Reserve and Office of the Comptroller of the Currency who are supposed to look out for our financial system, instead working to weaken or eliminate important safeguards,” Brown said, referring to the 2010 Dodd-Frank law that the Trump administration and congressional Republicans want to dismantle.
Otting took fire over his former bank’s reported practice of robo-signing — a practice in which workers signed mortgage- and foreclosure-related documents without reviewing them or verifying they were accurate. Otting defended his time at the bank, noting that his employees worked hard to forestall foreclosures.
“Instead of helping families recover from the financial crisis, as CEO of OneWest Bank, he contributed to the devastation,” Brown said of Otting before the vote.
Republicans supported both nominations. Committee Chairman Mike Crapo (R-Idaho) noted Joseph Otting and Randal Quarles “demonstrated a wealth of understanding and qualifications,” according to The Los Angeles Times.