The Federal Reserve governor who overseas bank regulations—a man known for applying a strict interpretation of the Dodd-Frank act in his duties—said he will resign in April. The upcoming vacancy will give President Trump a chance to appoint someone who shares his vision of deregulating the U.S. financial system.
In a letter to Trump, Daniel Tarullo said he would leave his job on or about April 5. He gave no reason for the resignation. Appointed by President Obama in in January 2009, his term is set to expire in January 2022. His reputation is one that “involves erecting safeguards after the [2008 financial] crisis and accompanying recession,” according to Reuters. “He has also pushed for bigger capital buffers and other checks on potential risks the largest banks may pose to the world’s financial system.”
In September, amid complaints of a lack of transparency in the models the Federal Reserve uses to measure bank capital levels, Tarullo said that he would not give big banks more details about how examiners evaluate capital levels. The Fed faces a potential lawsuit by members of the banking industry regarding the legality of some of the Fed’s stress testing.
Tarullo’s resignation comes amid major winds of change in the financial industry. Not only is the CFPB fighting a court ruling that declared its structure unconstitutional—a decision that impacts how the president determines the agency’s leadership—but a new executive order from President Trump would limit new federal regulations significantly, requiring two existing regulations to be removed for every new regulation adopted. The order follows Trump’s Jan. 20 freeze on forthcoming regulations until Trump’s regulatory agency appointees are given a chance to review them.
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