Dodd-Frank May Be Subject of Confirmation Hearing for U.S. Bank Regulators
FDIC Acting Chairman Martin Gruenberg
Joshua Roberts/Bloomberg
U.S. Federal Deposit Insurance Corp.'s acting chairman Martin Gruenberg.
U.S. Federal Deposit Insurance Corp.'s acting chairman Martin Gruenberg. Photographer: Joshua Roberts/Bloomberg
July 22 (Bloomberg) -- Neil Barofsky, former special inspector general for the Troubled Asset Relief Program, talks about the impact of the Dodd-Frank Act on the financial industry one year after its passage. Barofsky speaks with Lisa Murphy on Bloomberg Television's "Fast Forward." (Source: Bloomberg)
U.S. Federal Deposit Insurance Corp. Director Thomas Curry
Joshua Roberts/Bloomberg
U.S. Federal Deposit Insurance Corp. dDirector Thomas Curry.
U.S. Federal Deposit Insurance Corp. dDirector Thomas Curry. Photographer: Joshua Roberts/Bloomberg
President Barack Obama’s nominees to head agencies overseeing the biggest U.S. banks were quizzed over plans for implementing new regulations at a Senate hearing that provided a contrast to Washington’s debt-ceiling battle.
Martin J. Gruenberg and Thomas Curry, who helped guide the Federal Deposit Insurance Corp. through the 2008 credit crisis, testified at a Senate Banking Committee hearing on Gruenberg’s nomination to be FDIC chairman and Curry’s selection as comptroller of the currency.
Gruenberg, a longtime Senate staffer who is serving as acting FDIC chairman, and Curry, who was nominated as an FDIC board member by President George W. Bush in 2004, haven’t inspired the partisan rancor that led Senate Republicans to block or threaten Obama nominees for the Federal Reserve and the Consumer Financial Protection Bureau.
Still, lawmakers pressed the two men on how they plan to handle new responsibilities imposed by the Dodd-Frank regulatory overhaul enacted last year.
Curry, 54, was asked about his position on capital rules for banks. Acting comptroller John Walsh was assailed by Senate Democrats including Banking Committee members Sherrod Brown of Ohio and Jeff Merkley of Oregon for questioning whether requiring banks to hold higher levels of capital would force them to cut back on lending and undermine economic recovery.
“I would agree that capital is critically important to the health of the financial system,” Curry told the panel. Basel III, or the international banking standards, “would work to eliminate unlevel playing fields on an international basis.”
‘Times of Stress’
Curry, who would oversee national banks, told lawmakers that his 25 years of experience as a regulator have “underscored the fundamental importance of a safe and sound banking industry to our economy particularly in times of stress.” Before joining the FDIC, he served five Massachusetts governors as the commonwealth’s commissioner of banks between 1990 and 2003.
Gruenberg, 58, who has been FDIC vice chairman since 2005, would inherit the broader authority that Sheila Bair fought to gain for the agency before she stepped down this month. The new duties expand on the agency’s traditional role insuring deposits up to $250,000 at about 7,500 banks and overseeing safety and soundness at nearly 5,000 small and mid-sized lenders.
‘Leading Role’
“As the primary federal regulator of the majority of our country’s community banks, the FDIC carries a particular responsibility for the future of this crucial segment of our financial industry,” Gruenberg said in his remarks. “The FDIC will also continue to play a leading role in expanding access to insured financial institutions to all Americans as a means for economic opportunity.”
Arthur Wilmarth, a George Washington University law professor, said in an interview yesterday that both Curry and Gruenberg would have a “difficult challenge ahead of them” as their agencies work to restore the flow of credit in the financial system.
“They benefit from the fact that they have lived through the crisis. I would hope the Senate would see it as a big plus,” Wilmarth said.
To contact the reporter on this story: Meera Louis in Washington at mlouis1@bloomberg.net;
To contact the editor responsible for this story: Lawrence Roberts at lroberts13@bloomberg.net
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