The top contenders to run Biden's financial agencies
Democratic U.S. President-elect Joe Biden's team has tapped a mix of progressives and centrist policy experts, including former derivatives market regulator Gary Gensler, to work on a transition plan for financial industry oversight.
CNBC reported on Wednesday that Gensler was also being considered for the job of Treasury deputy secretary, a role that would see him work closely with the heads of financial agencies. Here is how staffing could shake out at some of the key financial regulators, according to nearly two dozen lobbyists, officials and policy experts in Democratic circles. The CFPB director is a critical role for progressives such as Senator Elizabeth Warren who believe the agency can help tackle wealth inequality and racial injustice. A U.S. Supreme Court ruling in June handed Biden the power to fire Republican President Donald Trump's CFPB director, Kathy Kraninger, and many policy experts expect the former vice president to quickly remove her after he takes office on Jan. 20.
Potential candidates to replace Kraninger include Warren's protégée, U. S. Representative Katie Porter; Federal Trade
Commissioner Rohit Chopra; Bharat Ramamurti, Warren's former aide who sits on a pandemic congressional oversight panel; and Patrice Ficklin, the CFPB's fair lending director who has been at the agency since its inception in 2011.
Some lawyers argue that while Biden's pick is being confirmed by the Senate, the law bars him from parachuting in his choice of acting director and requires him instead to appoint Kraninger's current deputy as interim agency head.
If Biden's team agrees with that interpretation, Thomas Pahl, a Republican political appointee who has previously served stints at the Federal Trade Commission, would be promoted to acting director. Biden is also expected to quickly staff up the SEC, which under Chair Jay Clayton, a Trump appointee, has pursued many rule changes opposed by Democrats and investor advocates.
Clayton is stepping down at the end of the year, positioning senior Democratic SEC Commissioner Allison Lee as acting chair under Biden until a new chair is sworn in. Progressives are keen on former Democratic SEC Commissioner Kara Stein to chair the agency, although
Rob Jackson, also a former Democratic commissioner who currently teaches at New York University School of Law, is preferred by moderates.
Gensler is also a contender, as is Preet Bharara, the former U.S. Attorney in Manhattan who became a scourge of Wall Street wrongdoers before Trump fired him in 2017. There will be a handful of banking regulator roles to fill, with the first likely to be comptroller of the currency.
That's because current Comptroller Brian Brooks is serving in an acting capacity, allowing Biden to replace him quickly. While Trump has said he plans to nominate Brooks for the role permanently, there is limited time to push his confirmation through the Senate before Biden takes office on Jan. 20.
Amy Friend, formerly senior deputy comptroller and chief counsel at the agency under former President Barack Obama, is seen as a leading candidate for the comptroller position. Federal Deposit Insurance Corporation (FDIC) Chair Jelena McWilliams cannot be removed by Biden and has said she wants to serve out her term, which ends in 2023. But Biden can still tilt the agency's five-seat board, which passes rules via majority vote, by quickly appointing the heads of the CFPB and Office of the Comptroller of the Currency who always hold seats on the FDIC board too. Obama-era holdover and former FDIC Chair Martin Gruenberg already has a seat.
If McWilliams resigns, Michael Barr, a professor at the University of Michigan Law School and former Obama administration Treasury official, is seen as a contender for that or another banking slot, as is Graham Steele, a director at the Stanford Graduate School of Business and former Federal Reserve staffer. Barr is advising the transition team. Current Republican CFTC Chair Heath Tarbert is expected to resign his role as chair, putting senior Democratic Commissioner Rostin Behnam in line to be acting chair. But the sources said Dan Berkovitz, the other Democratic CFTC commissioner and formerly general counsel to Gensler when he led the agency, is the front-runner for the permanent role of chair. The FHFA is led by libertarian Mark Calabria who has said he is committed to overhauling the country's housing finance market before his term ends in 2024. He is unlikely to resign, the sources said, and cannot currently be fired.