As term runs out for vice chair for supervision, lawmaker asks Fed to hold off on further deregulation

The Federal Reserve should refrain from any further deregulatory actions until President Joe Biden (D) has chosen nominees for upcoming terms on the agency’s board, the chairman of the Senate Banking Committee said in a Wednesday letter to the chair of the Fed Board.

In the letter, which coincided with the last day of the term of Federal Reserve Vice Chair for Supervision Randal Quarles, Sen. Sherrod Brown (D-Ohio) wrote to Fed Chair Jerome H. (“Jay”) Powell that Quarles’ tenure over the Fed’s supervisory and regulatory agenda “has been a failure that must come to a close with the end of his Vice Chairmanship.”

“A new direction for financial regulation must be determined by whomever the President chooses, and Congress confirms, to critical leadership positions on the Board,” Brown wrote, underscoring his appeal that the Fed Board not act on any more deregulation.

Quarles’ term as vice chair for supervision ends Wednesday; the White House has not yet nominated a successor (who must be confirmed by the Senate). However, Quarles remains a member of the Fed Board, as his term in that role runs to 2032.

Brown, in his letter, asserted that Quarles pursued an agenda of deregulation since he first became vice chair in 2017, and continues to. “Not only did he immediately set out a plan to shift post-crisis rules to benefitting industry interests over protecting working families, he dutifully continued his deregulatory efforts even as the economy was shaken by a global pandemic,” Brown wrote. “I am deeply concerned about these efforts during a global economic crisis.”

There is one open seat on the Fed Board; the president has not yet nominated someone to fill it. Meanwhile, the term of Powell as board chair expires in February (although his term on the board itself runs to 2028). The president has not revealed his plans for the Fed Board chair after Powell’s term ends.

Letter from Senate Banking Committee Chairman Sherrod Brown (D-Ohio) to Federal Reserve Board Chair Jerome H. Powell (re: deregulatory actions by Fed Board)