politics

Progressives Ask Schumer to Pick Like-Minded Financial Watchdogs

  • Groups make demand over SEC, FDIC jobs in letter to senator
  • ‘Willingness to stand up to Wall Street’ seen as key attribute

Charles Schumer

Photographer: Zach Gibson/Bloomberg

Senate Democrats are being pushed by liberal groups to pick “strong progressive” nominees for openings at financial regulatory agencies, saying appointees must have a “demonstrated willingness to stand up to Wall Street” as the Trump administration relaxes bank rules.

The demands from a coalition of more than 30 organizations were outlined in a letter to Senate Minority Leader Charles Schumer of New York, who by custom can pick Democrats to sit on federal commissions and boards. The progressive groups, including the AFL-CIO labor federation, Public Citizen and MoveOn Civic Action, are targeting slots that need to be filled at the Securities and Exchange Commission and the Federal Deposit Insurance Corp.

“This administration has been filling key regulatory positions with people pursuing Wall Street’s agenda at the public’s expense,” the groups wrote in the letter dated May 23. “There is an enormous amount at stake at both the SEC and FDIC.”

Partisan activists are seldom riled up over regulatory jobs, especially those at financial agencies where leaders are rarely high-profile names and often are politically moderate. The letter to Schumer comes at a time when the Trump administration’s rollback of post-crisis rules is picking up steam, and many Democrats are looking to capitalize on the issue ahead of mid-term elections.

Highest Level

In the past, such scrutiny has usually been applied to only the highest level of nominees, like a Treasury secretary or Federal Reserve chairman. But that is no longer the case, said Jeff Hauser, who runs the Revolving Door Project, which investigates executive branch appointments.

Unions, civil rights organizations and so-called netroots political activists all signed onto the letter, aligning with groups like the Consumer Federation of America and Americans for Financial Reform that typically monitor the agencies.

“In the not too distant past, only a handful of organizations or activists to the left of Robert Rubin paid any attention to financial regulators like the SEC and FDIC,” said Hauser, who helped put together the letter. “Times have changed, and going forward, progressives expect the Democratic party will only put forth aggressive regulators.”

One of the two Democratic seats at the five-member SEC will open by the end of the year at the latest because Commissioner Kara Stein’s term has expired. In their letter, the groups asked Schumer to choose a commissioner “who will likewise be a strong and independent voice for the public interest.”

Vetting Candidates

While the coalition doesn’t suggest any candidates by name, Schumer is vetting at least two potential SEC nominees progressives would be happy with, according to people familiar with the matter. They are Heather Slavkin Corzo, director of the office of investment at the AFL-CIO, and Bharat Ramamurti, an aide to Massachusetts Democratic Senator Elizabeth Warren.

At the five-member FDIC, the vice chairman and one other position are slated for Democrats. Schumer is considering nominating outgoing FDIC chief Martin Gruenberg for the vice chairman role, the people said. There are two other potential candidates progressives are pushing: Graham Steele, a former Senate Banking Committee staff member who is now with the Federal Reserve Bank of San Francisco, and Sabahat Qamar, who worked in the Obama White House and is now at the FDIC.

A Schumer spokesman had no immediate comment. Gruenberg declined to comment when asked about his potential nomination earlier this week. Corzo and Ramamurti didn’t return calls. Qamar declined to comment, as did Steele through a San Francisco Fed spokesman.

— With assistance by Benjamin Bain, and Elizabeth Dexheimer

    Before it's here, it's on the Bloomberg Terminal. LEARN MORE