Senate Banking Committee Chief Could Hold Up Fed Nominees Over Vacant Vice Chairman Post

By Victoria McGrane 

        WASHINGTON--The powerful chairman of the Senate Banking Committee suggested he may hold up President Barack Obama's two nominees for the Federal Reserve Board of Governors over a lack of action from the White House on another central bank position.
        At issue is a new post on the Fed's seven-member board of governors created by the 2010 Dodd-Frank law created to make the central bank more directly accountable for its duties overseeing the largest U.S. financial firms. Dubbed the vice chairman of supervision, the seat has stood empty for five years because Mr. Obama has never nominated anyone to fill it.
        "That's never been done. I think it ought to be done. I think the Fed needs all the help it can get," said Sen. Richard Shelby (R., Ala.) in an interview Friday for C-SPAN's "Newsmakers."
        Mr. Shelby said he intends to discuss the vacancy and the need to fill that "statutory role" with Fed Chairwoman Janet Yellen. He also linked the vice chairman post to two Fed governor nominees currently pending before the banking panel: University of Michigan economist Kathryn Dominguez, who was nominated July 21, or former Bank of Hawaii Chief Executive Allan Landon, who Mr. Obama nominated in January.
        "They want those nominees to fulfill the Board of Governors. We want them to follow the law," Mr. Shelby said.
        Mr. Shelby hasn't yet announced when his committee will hold confirmation hearings for Mr. Landon or Ms. Dominguez. After Mr. Landon's nomination, Mr. Shelby said he wouldn't move until a pick was named for the second vacancy on the Fed board. "They dithered for months, " Mr. Shelby observed.
        The Fed and the White House didn't immediately respond to requests for comment.
        Democrats are likely to protest any attempt Mr. Shelby makes to hold up Mr. Landon and Ms. Dominguez. The 10 Democratic members of the banking panel wrote Mr. Shelby this week to complain about the committee's lack of action on any of the nearly dozen nominations pending before it, including the Fed nominees, noting that Mr. Shelby hasn't held a single confirmation hearing all year.
        Mr. Shelby's comments are the latest attempt by Hill Republicans to turn up the pressure on the Fed and the Obama administration over the missing vice chairman of supervision. The lapse has irked a number of Republicans on the Hill who say the continued vacancy has kept Congress from exercising its full oversight over the Fed's considerable regulatory powers.
        Among other duties, the Senate-confirmed vice chairman is supposed to testify twice a year before Congress. Mr. Shelby and House Financial Services Chairman Jeb Hensarling (R., Texas) earlier this month asked Ms. Yellen to fulfill that testimony requirement until the White House names a candidate. Ms. Yellen appeared to acquiesce to that request during her July 15 appearance before Mr. Hensarling's committee, telling him "I certainly stand ready to respond to requests of this committee for me to testify."
        Regulatory oversight is currently handled by Fed governor Daniel Tarullo, who leads the Fed's internal committee on bank supervision, but he hasn't been formally nominated to the vice chairman post. The new vice chairman is charged with developing policy recommendations on bank regulation and with overseeing the Fed's efforts to ensure that the financial firms it watches over don't pose a threat to the broader economic system. That largely describes the job being carried out by Mr. Tarullo, who joined the Fed in 2009 as Mr. Obama's first Fed appointee.
        Write to Victoria McGrane at victoria.mcgrane@wsj.com
        (END) Dow Jones Newswires

        July 31, 2015 13:43 ET (17:43 GMT)

#SalesForex
#FX
#Forex
#SenateBankingCommitteeChief
#HoldUp
#FedNominee
#OverVacant
#ViceChairmanPost