Obama to nominate Timothy Massad for CFTC chairman

November 12, 2013

President Obama will nominate a senior Treasury Department official to lead the Commodity Futures Trading Commission, which is responsible for overseeing a vast swath of markets that influence the price of oil and other commodities as well as interest rates on many financial products.

Obama, according to a White House official, will nominate Timothy Massad as CFTC chairman. Massad would replace Gary Gensler, who is leaving after nearly five years at the helm of the agency, where he developed a reputation as tough on Wall Street and an advocate of strict financial regulation.

At Treasury, Massad has led the office implementing the Troubled Assets Relief Program, the financial crisis-era initiative that sought to stabilize the banking and housing sector and also provided critical relief to auto companies. While TARP has faded from the public debate as the financial system has stabilized, Treasury officials have continued to wind down the government’s investment in banking and auto companies and dispense additional aid to homeowners.

“Tim Massad is the right person to lead the CFTC at this important time for our economy and financial markets,” a White House official said in a statement previewing the announcement. The official noted that the TARP program has netted a $30 billion profit, after committing hundreds of billions of dollars to private firms during the crisis.

Under Gensler, the CFTC, once a backwater agency, gained new prominence. CFTC pushed for tough oversight of the derivatives market – a previously unregulated but massive market that exacerbated the 2008 financial crisis. The agency also had taken on high-profile financial enforcement cases.

The White House official said Obama will thank Gensler for “his tireless work at the agency” during the announcement Tuesday – “particularly for his work crafting and implementing financial reform.”

Massad has not previously worked at a financial regulator, but the official said he is deeply familiar with derivatives through his work at a major law firm, Cravath, Swaine & Moore, where he spent the bulk of his career since graduating from Harvard Law School. He also advised the Congressional Oversight Panel which reviewed the causes and response to the financial crisis.

Obama also plans to use the announcement to underscore the agency’s role in carrying out new financial regulations under the Dodd-Frank legislation, passed in 2010. He will urge Congress to fully fund the CFTC, which has labored under tight budget constraints, given that the CFTC receives appropriations from Congress each year – unlike most federal regulators, which fund themselves through industry fees.

Zachary A. Goldfarb is a staff writer covering the White House, focusing on President Obama’s economic, financial and fiscal policy.
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Aaron Blake · November 11, 2013