Will Turnover at Agencies Hinder Policy?
Paletta, Damian, American Banker
WASHINGTON -- Edward M. Gramlich's announcement Wednesday that he would step down from the Federal Reserve Board in a few months not only added to the list of imminent vacancies at the central bank but highlighted the flux in the top ranks of several banking agencies.
Several major interagency efforts are at pivotal stages. These include simplification of community reinvestment exams, establishment of risk-based capital standards for large and small banks, review of new Home Mortgage Disclosure Act data, revisions of credit card and privacy disclosures, and tightening of standards for how lenders grant home equity lines.
Observers speculated about whether turnover at the Fed, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision will put any of the projects on a different path. Mr. Gramlich downplayed the prospects of major changes of direction but acknowledged that there is some uncertainty.
"I don't think the new leadership" at the OCC and OTS "will change any courses dramatically," he said in an interview Wednesday. "It's a little bit less clear what will happen at the Fed, because I have no idea who will be replacing me, but ... we have been able to talk through these tough issues and arrive at a pretty good consensus over here."
Wayne Abernathy, an executive director of the American Bankers Association, said many of the agencies' key staff members remain and will probably ensure continuity.
Because of the full slate of tasks, "I wouldn't expect to see any new initiatives," he said, "but I would expect regulators to continue working on what is there."
Mr. Gramlich, 65, plans to step down in August, after eight years as a Fed governor, two-and-a-half years shy of the end of his term.
However, he is not leaving the public policy arena. He will become the Richard A. Musgrave Collegiate Professor in the Gerald R. Ford School of Public Policy at the University of Michigan and a senior fellow at the Urban Institute. He also plans to do research in the next two years for a book on the growth of subprime lending, building on his experience on the board of the Neighborhood Reinvestment Corp.
Two of the Fed's other six governors are also slated to leave in the next eight months.
Chairman Alan Greenspan is expected to leave when his term ends in January, and a hearing is scheduled for today on Fed Governor's Ben Bernanke's nomination to head the White House's Council of Economic Advisers. …