Fed Should Halt Work on New Bank Regulations, Top Democrat Says

(Bloomberg) -- The Federal Reserve should stop working on Wall Street banking regulations until President Joe Biden installs new leaders at the central bank, said Senate Banking Committee Chairman Sherrod Brown.

The Ohio Democrat made the request after the Fed announced that Randal Quarles would no longer be the agency’s vice chairman for supervision. Brown has repeatedly criticized Quarles and Fed Chair Jerome Powell over bank oversight, saying they pursued a de-regulatory agenda during the Trump administration. 

The Fed’s “supervisory and regulatory agenda has been a failure that must come to a close with the end of his vice chairmanship,” Brown said of Quarles in a letter he sent to Powell that was dated Wednesday.

While many in Washington and on Wall Street expect Biden to nominate Powell for a second term, the Fed chief’s stance on regulation is one of his biggest stumbling blocks, particularly with progressive Democrats. 

As Quarles’ vice chairmanship was set to expire, the Fed made a surprise announcement Tuesday that he’d be removed as the oversight chief, eliminating his role as head of the agency’s supervision and regulation committee. That post will remain empty until Quarles’s successor is confirmed by the Senate. So the Fed is likely to adhere to Brown’s request. 

Brown, who will have a prominent role in confirming Powell if he’s re-nominated, argued that “a new direction for financial regulation must be determined by whomever the president chooses” for the expiring Fed posts. The Fed is set to consider some key bank-capital regulations as well as a long-awaited rule on bonuses for financial executives. 

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