Reed Raises Alarm Over Trump Administration’s Political Power Grab at Wall Street Watchdog Agency
Senators say President Trump’s controversial move to install a financial services lawyer atop the powerful OCC without any vetting raises serious conflicts of interest & ethical questions
WASHINGTON, DC – Today, U.S. Senator Jack Reed (D-RI) and six members of the Senate Banking Committee – Ranking Member Sherrod Brown (D-OH) and Senators Chris Van Hollen (D-MD), Elizabeth Warren (D-MA), Robert Menendez (D-NJ), Brian Schatz (D-HI), and Catherine Cortez Masto (D-NV) – sent a letter to Treasury Secretary Mnuchin sounding the alarm about the Trump Administration’s recent personnel moves at the Office of the Comptroller of the Currency (OCC), which oversees over 2,000 national banks and is charged with protecting consumers and ensuring the safety and soundness of these financial institutions.
The Senators are raising concerns this week about Secretary Mnuchin’s decision to completely circumvent the Senate confirmation process by installing a Wall Street lawyer, Keith Noreika, as the acting head of the OCC. As Bloomberg noted: “The Trump administration used a highly unusual personnel move to skirt Senate confirmation and standard ethics requirements when it installed a financial services lawyer atop a powerful banking regulator. Keith Noreika’s transition from representing banks to overseeing them came courtesy of a quick two-step. He was made “first deputy” at the Office of the Comptroller of the Currency, a designation that ensured he would ascend to the top job once it opened. Then the administration ousted Thomas Curry, an OCC head picked by Barack Obama who had imposed tough rules and record fines on lenders. Just like that, Noreika became acting comptroller.”
Senator Reed says this move is a thinly veiled attempt to sidestep ethics rules and rollback financial regulations: “Mr. Noreika is taking a shortcut from his corner office where he fought for banking industry interests into the watchdog agency that is supposed to oversee them. This move is additional proof that the Trump Administration is further rigging the system and putting the interests of big banks ahead of the financial well-being of the American people.”
In their joint letter, the seven senators on the Banking Committee wrote: “We are deeply concerned by your decision to replace Thomas Curry, the head of the Office of the Comptroller of the Currency (OCC), with Keith Noreika, an acting head from outside the OCC. The Comptroller of the Currency must be nominated by the President and confirmed by the Senate. President Trump has not named a nominee for this position. Yet you have chosen to replace the current head with an acting head who is unvetted, has obvious conflicts of interest, and lacks the experience to run an agency that employs almost 4,000 individuals and oversees over 2,000 national banks, both large and small.”
The full text of the letter follows:
Dear Secretary Mnuchin,
We are deeply concerned by your decision to replace Thomas Curry, the head of the Office of the Comptroller of the Currency (OCC), with Keith Noreika, an acting head from outside the OCC.
The Comptroller of the Currency must be nominated by the President and confirmed by the Senate. President Trump has not named a nominee for this position. Yet you have chosen to replace the current head with an acting head who is unvetted, has obvious conflicts of interest, and lacks the experience to run an agency that employs almost 4,000 individuals and oversees over 2,000 national banks, both large and small.
As we learn more about the administration’s decision to install Mr. Noreika, we ask you to respond to the following questions no later than May 17:
- Can you describe the authorities of a First Deputy Comptroller and enumerate the differences between a First Deputy Comptroller appointed to the position of Comptroller as opposed to a Comptroller who has been confirmed by the Senate? Will there be any limits on his duties and authorities as Acting Comptroller of the Currency?
- Will Mr. Noreika be serving as Acting Comptroller or as a counselor from the Department of Treasury?
- As a “special government employee,” will he be limited in any capacity from undertaking the duties to run the agency?
- Will Mr. Noreika have the authority to sign enforcement orders in his new capacity? If he does not have this authority, how does the OCC plan on executing enforcement orders during his tenure?
- Will Mr. Noreika have the authority to close financial institutions regulated by the OCC? If he does not have this authority, how does the OCC plan on closing undercapitalized financial institutions during his tenure?
- Will Mr. Noreika have the authority to authorize mergers and approve new charters? If he does not have this authority, how does the OCC plan on approving mergers and new bank charters during his tenure?
- Will Mr. Noreika be a voting member of the Financial Stability and Oversight Council (FSOC)? If he does not have this authority, how does the OCC plan to have a voice at the FSOC?
- Has Mr. Noreika signed an ethics agreement? If so, please provide a copy. In addition, does President Trump’s “ethics pledge” apply to Mr. Noreika?
- Mr. Noreika has represented numerous clients in the financial services industry, including companies with substantial pending or potential matters before the OCC. In order to avoid any potential impropriety (or the appearance of it), is Mr. Noreika required to recuse himself from any matters which may result in a conflict or the appearance of a conflict?
- Please provide a detailed list of any such recusals that will be required of Mr. Noreika, based upon his disclosure of financial interests or prior representation.
- Has Mr. Noreika been granted any exemptions or waivers related to matters involving his work for previous clients?
- Is it your understanding that Mr. Noreika will continue to serve as First Deputy Comptroller following the nomination and confirmation of Mr. Curry’s successor? Does Mr. Noreika plan to return to his legal practice after his time at the OCC?
- When was the last time a Treasury Secretary appointed someone from outside the OCC to lead the agency? Please describe the process for installing that person at the OCC.
- Why wasn’t Mr. Noreika simply nominated for the position of Comptroller?
- What are the administration’s plans for nominating a new Comptroller of the Currency, and when will the Senate Banking Committee receive nomination papers for the nominee?
- Why didn’t the administration choose an individual already within the OCC as Acting Comptroller during this period of transition?
At a time when our financial institutions have recovered from the 2008 crisis but working families continue to struggle, the OCC’s work on consumer protection and financial stability is more important than ever. We see no reason to disrupt the agency’s operations by replacing a strong, independent leader like Comptroller Curry with an untested outsider who has not been confirmed by the Senate.
Thank you for your attention to this matter.