Mnuchin Bank's Former CEO Confirmed to Lead U.S. Watchdog
(Bloomberg) -- Former OneWest Bank Group Chief Executive Officer Joseph Otting won Senate approval on Thursday to lead a key U.S. bank regulator, further clearing the way for the Trump administration to roll back Wall Street regulations.
In heading the Office of the Comptroller of the Currency, Otting will be the chief overseer of banking units at giants such as JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc., plus hundreds of smaller lenders across the country. He’ll have a central role in efforts to reverse Volcker Rule trading restrictions, certain capital constraints and tough supervision that lenders say reflect an overreaction to the 2008 credit crisis.
Otting will replace Keith Noreika, a bank lawyer who made waves at the OCC after Treasury Secretary Steven Mnuchin installed him as temporary chief. The new comptroller will be reunited with Mnuchin, who was OneWest’s chairman when Otting was CEO. Their time at the bank, which rose from the ashes of crisis casualty IndyMac Bancorp Inc., was complicated by an OCC enforcement action targeting improper foreclosures.
Noreika sent a resignation letter to Mnuchin on Thursday, saying that government service was an “exception to the norm” for him and that he intends to return to the private sector. The letter could resolve persistent questions about whether he might take over the Consumer Financial Protection Bureau after Director Richard Cordray announced plans to step down. Noreika said he’ll leave the OCC after Otting is sworn in.
The road to confirmation was rocky for Otting, who faced criticism for his role in OneWest’s foreclosure practices and questioning of his credentials. At one point, the White House was forced to clarify his biographical information after Bloomberg News reported that Otting hadn’t attended Dartmouth College, as a reference to his being a “graduate of the School of Credit and Financial Management at Dartmouth College” seemed to indicate. In fact, it was only a management training course that used space on the Ivy League school’s campus.
Though Otting lacks the advanced academic degrees held by previous comptrollers in recent decades, he has amassed significant wealth in his banking career, having received a $10.5 million payout after CIT Group Inc. acquired OneWest in 2015. Before joining OneWest, he rose through the ranks at U.S. Bancorp and became a vice chairman.
At his Senate confirmation hearing, Otting said he’s open to revising regulations, such as those established in the Dodd-Frank Act. He said oversight should be more certain and predictable, and regulators’ discretion should be “as constrained as possible.”
American Bankers Association President Rob Nichols said Noreika gave Otting an “excellent foundation” to build on, and Otting’s professional experience will mean he “understands the important role that banks play in promoting economic growth.”
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