President Biden likes to tout his role as “Sheriff Joe” in the Obama administration, where he helped distribute and monitor billions in recovery aid in response to the Great Recession. But another key part of the cleanup from the 2008 financial crisis was tighter regulation of Wall Street banks. In that area, Mr. Biden is in danger of not getting his own sheriffs in place.
At the top of the list is the need to fill the role of the Federal Reserve vice chair of supervision. This post has been vacant since Oct. 13, 2021. If midterm elections go the way polling currently predicts, Mr. Biden will have an even tougher time getting much done with a GOP-led House and possibly Senate, too. So this is likely Mr. Biden’s last window to get his picks in place in top bank cop positions. It’s inexplicable how slowly the White House and Senate Democrats have moved to fill these roles.
Financial regulators aren’t household names, but they can have a massive impact on everything from bitcoin to bank mergers to market stability. They have wide discretion to make regulations, largely without any additional input from Congress. The Trump administration used regulatory channels to severely curb immigration. Democrats could make a similarly large impact on financial regulation, but they have been slow to nominate and confirm key appointments.
It was well known since Mr. Biden’s first day in office that the Fed’s banking supervision position would be open in October 2021, yet the White House waited until January 2022 to nominate Sarah Bloom Raskin for the role. She was unable to garner enough Democratic votes for confirmation and was forced to withdraw. On April 15 — six months after the position became vacant — Mr. Biden nominated former Treasury official Michael Barr for the Fed role. His confirmation hearing has been scheduled for Thursday. Senate Democrats need to move swiftly after that to confirm him.
Mr. Barr was instrumental in implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act during President Barack Obama’s first term. He is widely seen as a moderate Democrat and is well known in the financial industry. He was an acolyte of Robert Rubin when he was Treasury secretary during the Clinton administration. While some on the left are concerned that Mr. Barr would be more lenient on the banks than they would like, it’s clear he is qualified for the role. In a less polarized world, he would garner Republican votes, too.
The comptroller of the currency post also remains open after Mr. Biden’s nominee, Saule Omarova, was forced to withdraw in December after a rocky confirmation hearing, and there’s no confirmed chair of the Federal Deposit Insurance Corporation. At both the OCC and FDIC, there are acting heads, which, while not ideal, at least allows Mr. Biden to have some sway over the agencies. But the Fed needs to have a confirmed person for the role.
At a time when stocks are nosediving and various cryptocurrencies are collapsing, Mr. Biden and fellow Democrats need to make these appointments a more urgent priority. This opportunity may not come again.