Fed board member Tarullo announces resignation
WASHINGTON — Federal Reserve board member Daniel Tarullo, a key official guiding bank regulation efforts, will resign this spring, the Fed said Friday.
Tarullo’s decision will clear the way for President Donald Trump to select a candidate for the bank supervision position. Trump is likely to choose someone more in line with his desires to roll back the regulations put in place by the Dodd-Frank Act, which overhauled bank supervision in the wake of the 2008 financial crisis.
Tarullo said in a short resignation letter to Trump that he planned to step down “on or around April 5, 2017.” He did not provide a reason for his decision.
There are currently two vacancies on the Fed board because Congress refused to confirm two nominees of former President Barack Obama. Tarullo’s departure will mean that Trump will have the chance to fill three Fed vacancies in his first months in office.
The Dodd-Frank Act created a position of vice chairman for bank supervision. But the Obama administration never filled the post, reflecting in part the sharp disagreements between Democrats and Republicans in Congress over how the financial system should be regulated. Instead, Tarullo has effectively served as the Fed’s point person on bank regulation since 2009.
Trump last week launched his long-promised attack on the Dodd-Frank Act, ordering an administration review of the financial oversight law after meeting with business executives at the White House, and pledging further action to free banks from restrictions.
Trump had been expected to fill the vice chairman for supervision position, which would likely have complicated Tarullo’s role. His term as a Fed board member does not expire until Jan. 31, 2022.
In an interview, Tarullo said that after eight years on the Fed board he had been planning for some time to step down regardless of the outcome of the election. He said he believed the major reforms implemented with Dodd-Frank will survive the overhaul being pushed by the new administration.
“I am hopeful that the core of the reforms as they apply to the largest banks will be recognized as having created a much more resilient financial system,” Tarullo said.
Dennis Kelleher, president of Better Markets, an organization that has campaigned for tougher banking regulations, praised Tarullo as “a fearless fighter for protecting the American people from an unstable financial system, another financial crisis and an economic catastrophe.”
Fed Chair Janet Yellen said in a statement that “Dan led the Fed’s work to craft a new framework for ensuring the safety and soundness of our financial system following the financial crisis and made invaluable contributions across the entire range of the Fed’s responsibilities.”
Trump was also been highly critical of Yellen during the presidential campaign, accusing her of keeping interest rates low to benefit Democrats. He is expected to appoint someone else as Fed chair when Yellen’s four-year term ends in February 2018. Yellen has said she has no intention of leaving before her term ends.
Tarullo, 64, had been a law professor at Georgetown University Law Center before joining the Fed board in 2009.