In a prior post I discussed potential changes to the leadership of Federal financial regulatory and supervisory agencies as a result of the 2020 Presidential election. This post reviews progress on that front through the first six months of the Biden-Harris Administration. An updated scorecard is attached to this post for ease of reference.
In general, the Administration has acted swiftly to exercise its authority to change agency leadership, to wit:
- The Acting Comptroller of the Currency from the last administration has been replaced by an Acting Comptroller from this one. The Administration has not yet nominated a permanent Comptroller.
- Pursuant to the Supreme Court’s decision in Seila Law v CFPB, the Director of the Consumer Financial Protection Bureau (CFPB) from the last administration has been replaced. The Administration has submitted a nomination for a permanent Director, who has not been confirmed. The Agency is currently led by an Acting Director.
- The Board of Directors of the Federal Deposit Insurance Corporation (FDIC) has changed as a result of the leadership changes at the Office of the Comptroller of the Currency (OCC) and CFPB. The FDIC board now consists of a Chair, Director, the Acting Comptroller and Acting CFPB Director. The office of Vice Chair is vacant.
- Pursuant to the recent Supreme Court decision in Collins v Yellen, the Director of the Federal Housing Finance Agency (FHFA) from the prior administration has been removed and an Acting Director named to replace him. The Administration has not yet nominated a permanent Director.
- Pursuant to its authority under Free Enterprise Fund v PCAOB, the Chair of the Public Company Accounting Oversight Board (PCAOB) was removed, and a confirmed Commissioner named Acting Chair in his place. The Board has two additional confirmed Commissioners and two vacancies.
- The Chair of the National Credit Union Administration (NCUA) from the prior administration has continued as a Director but has been replaced as Chair by another confirmed Director. The NCUA Board remains at full strength.
- The Vice Chair for Supervision of the Federal Reserve Board of Governors remains in that office through October 2021, and as a Governor through January 2032. In addition, one seat on the Board is vacant, so the Administration has the option either of renominating the currently servicing Vice Chair for Supervision or replacing him in that capacity.
- The Administration’s nominee to be Chair of the Securities and Exchange Commission (SEC) has been confirmed and the Commission is at full strength.
- The Chair of the Commodity Futures Trading Commission (CFTC) from the prior administration has been replaced by an Acting Chair who is a confirmed Commissioner. The Commission is now split 2-2 along party lines and the Administration has not nominated a permanent Chair.
- As a result of the changes just mentioned, there are seven new members of the Financial Stability Oversight Board: Treasury Secretary (Chair), Comptroller, CFPB Director, CFTC Chair, FHFA Director, NCUA Chair, and SEC Chair. Four of these new members are Acting.
The Administration’s actions to date on agency leadership are a good start. However, there are two areas of concern. The first is the failure to nominate a permanent Comptroller of the Currency. Given the importance of the OCC in the ongoing debate over fintech, high-cost lending, Community Reinvestment Act, and systemic risk, the nomination and confirmation of a competent and experienced full-time Comptroller is a matter of importance, if not urgency. Five top-quality names have been floated since the Inauguration. It is time for the Administration to pick one and move the process forward.
A second area of concern is the number of Acting agency heads noted above. I hope the Administration will not follow its predecessor in agency management through perpetual Acting leadership, never nominating full-time leaders or slow walking the process so the Acting head stays in place. While I understand that Acting leaders have the technical authority to conduct agency business as if they were permanent, they do not have the kind of authority that full vetting and confirmation would confer. And the impermanent status of an agency leader may affect the morale of the agency itself, removing even a veneer of independence.
My criticism of Acting agency leadership is not personal to the leaders on the current scorecard, all of whom are experienced and highly technically competent. It is, rather, a criticism of governance that ignores the requirements of law, forecloses debate on important issues of national policy, and results in agency leadership that is divorced from experience in the rough and tumble of politics and the real economy. Many of the Acting leaders listed on the scorecard, and of the permanent agency heads for that matter, are long-time government executives or former Congressional staffers. Nothing wrong with that, but you can have too much of a good thing. As Speaker Sam Rayburn is reported to have said of the “best and brightest” of the Kennedy/Johnson years, “I wish a few of them had run for sheriff just once.” I’m with Mr. Rayburn; experience outside the Beltway would make Federal financial services supervision and regulation better.
So where do we find “sheriffs” for this purpose? I respectfully suggest that the current crop of State commissioners of banking or financial institutions would be a good place to start. The commissioners are a varied and talented group that have for years operated in a bipartisan way to address important issues of public policy and market supervision. They have first-hand experience of the needs and concerns of communities around the country and are partners in a variety of supervisory and regulatory activities with the FDIC, Federal Reserve, and CFPB. State commissioners have a good recent track record in Federal leadership positions: Sarah Bloom Raskin of Maryland as a Fed Governor and Deputy Secretary of the Treasury, and Tom Curry of Massachusetts as FDIC Director and Comptroller of the Currency. I hope the Administration will consider State commissioners for the open positions mentioned above.
The Biden-Harris Administration has done a lot to restore public confidence in government by appointing experienced and competent people to head the agencies of the Federal Government. As noted above, it still has work to do. I hope that it will, to the extent it has not already done so, nominate high-quality permanent leadership for Federal financial services supervisory and regulatory agencies as soon as possible. The integrity of the affected agencies and our financial markets depend on it.
Agency Leadership Scorecard
July 5, 2021
| Agency | Position | Incumbent | Term | Comments |
| SupervisoryAgencies | ||||
| Fed Board | Chair | Jerome H. Powell | As Chair: through February 2022; as Governor: through January 31, 2028. | |
| Vice Chair, Supervision | Randal K. Quarles | As Vice Chair for Supervision: through October 31, 2021; as Governor: through January 31, 2032. | ||
| Vice Chair | Richard H. Clarida | As Vice Chair: through September 2022; as Governor: through January 31, 2022. | ||
| Governor | Michelle W. Bowman | Through January 31, 2034 | ||
| Governor | Lael Brainard | Through January 31, 2026. | ||
| Governor | Christopher J. Waller | Through January 31, 2030. | ||
| Governor | Vacant | |||
| OCC | Comptroller | Michael J. Hsu | Acting | No nominee |
| FDIC Political Diversity required. | Chair | Jelena McWilliams | As Chair: through June 2023; as Director: through June 2024. | Republican director |
| Vice Chair | Vacant | |||
| Director | Martin Gruenberg | Hold-over. | Democrat director | |
| Director | Michael J. Hsu | Held by virtue of the office of (Acting) Comptroller of the Currency. | Democrat director | |
| Director | Dave Uejio | Held by virtue of the office of (Acting) Director, CFPB. | Democrat director | |
| NCUA Staggered six-year terms. Political diversity required. | Chair | Todd M. Harper | Through April 2025 | |
| Vice Chair | Kyle S. Hauptman | Through December 2026 | ||
| Board Member | Rodney E. Hood | Through April 2025 | ||
| RegulatoryAgencies | ||||
| CFPB | Director | Dave Uejio | Acting | Rohit Chopra nominated but not confirmed. |
| CFTC Staggered five-year terms with required party diversity. | Chair | Rostin Benham (Acting) | Acting; Commissioner through September 2022 | The President, with the consent of the Senate, designates one Commissioner as Chair. |
| Commissioner | Brian D. Quentez | Through August 2022 | ||
| Commissioner | Dawn DeBerry Stump | Through September 2023 | ||
| Commissioner | Dan M. Berkovitz | Through September 2023 | ||
| Commissioner | Vacant | |||
| PCAOB Staggered five-year terms. Appointed by SEC in consultation by the Fed. In Free Enterprise Fund v PCAOB, SCOTUS determined that this was unconstitutional. | Chair | Duane M. DesParte | Acting; Commissionerthrough October 24, 2023 | |
| Board Member | Rebekah Goshorn Jurata | Through October 24, 2024 | ||
| Board Member | Megan Zietsman | October 24, 2025 | ||
| Board Member | Vacant | |||
| Board Member | Vacant | |||
| SEC Independent commission with five-year staggered terms and required political diversity. | Chair | Gary Gensler | Through June 2026 | |
| Commissioner | Elad L Roisman | Through June 2023 | ||
| Commissioner | Hester M. Peirce | Through June 2025 | ||
| Commissioner | Allison Herren Lee | Through June 2022 | ||
| Commissioner | Caroline A. Crenshaw | Through June 2024 | ||
| Housing | ||||
| FHFA | Director | Sandra L. Thompson | Acting | |
| FSOC | Chair | Secretary of the Treasury | ||
| Fed Chair | ||||
| Comptroller of the Currency | Acting | |||
| Director, CFPB | Acting | |||
| Chairman, SEC | ||||
| Chair, FDIC | ||||
| Chair, CFTC | Acting | |||
| Director, FHFA | Acting | |||
| Chairman, NCUA | ||||
| Thomas E. Workman | March 29, 2024 | Independent member with insurance experience. Six-year term. |
Joseph A. Smith, Jr. is a Senior Fellow at the Global Financial Markets Center at Duke Law and the former North Carolina Commissioner of Banks.
