Regulatory Chessboard Reconfigured: New Leadership Set to Shape Financial Oversight

The pieces on the regulatory chess board are lining up as the Administration nominates new heads for the regulatory agencies.  

The agencies and nominees: 

• Consumer Financial Protection Bureau (CFPB) – Jonathan McKernan  

• Commodity Futures Trading Commission (CFTC) – Brian Quintenz 

• Federal Deposit Insurance Corporation (FDIC) – No Nominee Yet 

• Office of the Comptroller of the Currency (OCC) – Jonathan Gould 

All of the nominees still need to go through the confirmation process, which could take some time depending on what else the Congress takes up. The Senate Banking Committee is scheduled to hear from Johnathan McKernan on Feb. 27. 

At the FDIC, former Vice Chairman Travis Hill was appointed Acting Director on Jan. 20. While Hill has been seen as more friendly to the payments and banking industries than former Chairman Marty Gruenberg, his appointment as Acting Director is not a guarantee that he will be nominated to be the permanent director.  

As evidence of this, Rodney Hood, the former chairman of the National Credit Union Administration Board (NCUA), was appointed to be the acting comptroller on Feb. 10. But that did not lead to him being nominated for the comptroller position.  

Jonathan McKernan, the CFPB nominee, was nominated to head the CFPB on Feb. 11. He previously served on the FDIC Board. If confirmed, he will return to the FDIC board, along with the Comptroller. The by-laws of the Board say that not more than three of the five-member board can be from one political party.  

Until his confirmation, the CFPB will be run by Office of Management and Budget Director Russell Vought. In February, he told the Bureau staff to stop all work and not to come into the office. He also said that the CFPB would not take any new money from the Federal Reserve because it had $711.6 million.  

While there has been much talk about closing the CFPB, that would require legislation, since it was created as part of the 2010 Dodd Frank Act. But, as one Washington observer pointed out, if they were planning to close it completely, the Administration would not have nominated a new director.  

The IPA has heard that the Bureau has retained most of its rule writing staff and will begin looking at the regulations or proposals which have not been finalized that are on the books today to see what needs to be changed, clarified, or revoked. .

It also likely will refocus its efforts on the housing market and going after bad actors.  
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The IPA will continue monitoring the personnel changes and look for opportunities to represent the industry’s interests as the new administration begins regulating.  ​

​​Ben Jackson is the Chief Operating Officer of the Innovative Payments Association, a leading trade association representing companies in payments. With over two decades of industry experience, Ben is dedicated to providing valuable information, advocacy, and support to help members improve financial outcomes for consumers, businesses, and government agencies.