Community Bankers Look to New Fed Governor for Relief
(Bloomberg) -- The smallest banks in the U.S. hope they have someone in their corner in Washington after the Senate on Thursday confirmed Michelle Bowman, the Kansas state banking commissioner, as the Federal Reserve’s newest governor.
Before becoming a regulator, Bowman worked at Farmers and Drovers Bank, the small-town bank her great-great-grandfather helped found in 1882 in Council Grove, Kansas. She’s expected to be sworn in at the Fed in the coming weeks.
“Community bankers nationwide are wildly pleased that we have a community bank representative on the Federal Reserve,” said Paul Merski, executive vice president at the Independent Community Bankers of America, a lobbying group in Washington.
Bowman, who goes by “Miki," was approved with bipartisan support in a 64-34 vote on the Senate floor. She’ll fill a spot at the Fed reserved for someone with community banking experience.
In anticipation of the vote Fed Chairman Jerome Powell, at an event in Dallas on Wednesday evening, said “we’re really excited” at the prospect of Bowman joining the board.
Small bankers have long complained, especially since the financial crisis of 2008-09 triggered a major regulatory response from Washington, that they are overburdened by rules designed to protect the financial system from the risk-taking and misbehavior of large banks.
“When the Wells Fargoes of the world pull a stunt, we get blamed for it,” said Gene Suellentrop, a state senator in Kansas who sits on the board of a community bank in Wichita.
Suellentrop, a Republican who has dealt frequently with Bowman as a member of the Kansas Senate’s Committee on Financial Institutions and Insurance, described her as a “pragmatic and balanced” regulator.
“We’ll have an advocate on our side who will look out for us,” he said of Bowman and small banks.
Bowman also received praise from a Democratic lawmaker in Kansas, State Representative Gail Finney, who said Bowman was not an ideologically driven advocate of deregulation.
“She definitely has the experience, and I think she’s going to be a very fair person,” said Finney, who sits on the Kansas House of Representatives’ Committee on Financial Institutions and Pensions.
The ICBA’s Merski said Bowman’s arrival is well-timed as the Fed is currently considering adjustments to capital levels required of smaller banks.
“Having someone like Miki Bowman in the mix at the Fed as they’re working on those capital rules and representing community banks is extremely important,” he said.
Bowman, 47, was nominated to the job of Kansas state banking commissioner in 2016 by Republican Governor Sam Brownback. She also served in government for several years in Washington, first on the staff of former Kansas Senator Bob Dole and later as deputy assistant secretary and policy adviser to Homeland Security Secretary Tom Ridge.
As a permanent voter on the Federal Open Market Committee, Bowman will also have a say on monetary policy, but very little is known about her views in that area.
After Bowman is sworn in the Fed’s Board of Governors will still have two vacant seats. Nominees to fill those vacancies, former Fed staff economist Nellie Liang and Carnegie Mellon University professor Marvin Goodfriend, are still awaiting confirmation.
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