The transition to a new administration with the election of Republican Donald J. Trump as President, along with continued Republican control of the Senate and House of Representatives, promises to bring substantial change to each of the federal financial regulatory agencies.  Changes in leadership at the federal financial regulatory agencies will likely result in substantial changes in policy regarding regulation, compliance, enforcement, and transactions.  While these transitions will take place over different time frames depending on the agency, there will likely be new leaders and many new board members at all of the agencies within a year of the new President’s inauguration.

For the Office of the Comptroller of the Currency (“OCC”), a bureau within the Department of the Treasury, very significant transition changes could begin as early as Inauguration Day. The OCC is led by the Comptroller of the Currency (the “Comptroller”).  The Comptroller is appointed by the President with the advice and consent of the Senate, and holds office for a term of five years “unless sooner removed by the President, upon reasons communicated by him [the President] to the Senate.”  See 12 U.S.C. § 2. Courts have interpreted this appointment provision as making the Comptroller of the Currency removable at will by the President.  See PHH Corp. v. Consumer Financial Protection Bureau, No. 15-1177, slip op. at 33-34 n.6 (D.C. Cir., Oct. 11, 2016).

The five-year term of the current Comptroller of the Currency, Thomas J. Curry, expires on April 1, 2017, just two months after the new Administration takes office. Given this short overlap, the Administration could decide to allow Comptroller Curry to serve until the end of his term, or even to remain in office until his successor is in place.  But it is also possible that the Administration will ask for Comptroller Curry’s resignation sooner, or that he decides to resign sooner, which in either case would create a temporary vacancy.

In such circumstances, an Acting Comptroller would be appointed and would serve until the new Comptroller is nominated and confirmed.  Under the governing statute, the Secretary of the Treasury effectively has the authority to designate whomever he or she chooses to serve as Acting Comptroller, with no restriction on that person being a current employee of the agency.  12 U.S.C. § 4.  Such an appointment could presumably be made by an Acting Secretary of the Treasury if the Administration’s nominee to serve as the new Secretary has not yet been confirmed.

In the past, the Comptroller nomination and confirmation process has sometimes taken a number of months, leaving an Acting Comptroller in place for extended periods. But this time around the process may move more quickly since Congress generally acts on nominations faster at the beginning of new administrations.

 

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Photo of David Stein David Stein

David Stein advises clients on credit reporting, financial privacy, financial technology, payments, retail financial services, and fair lending issues. He assists a broad range of financial services firms, consumer reporting agencies, financial technology companies, and their vendors with regulatory, compliance, supervision, enforcement, and…

David Stein advises clients on credit reporting, financial privacy, financial technology, payments, retail financial services, and fair lending issues. He assists a broad range of financial services firms, consumer reporting agencies, financial technology companies, and their vendors with regulatory, compliance, supervision, enforcement, and transactional matters.

Mr. Stein has significant experience advising clients on compliance with the FCRA, GLBA, ECOA, EFTA, E-Sign Act, TILA, TISA, FDCPA, Dodd-Frank Wall Street Reform and Consumer Protection Act, and FTC Act, as well as state financial privacy laws. Mr. Stein is a member of the firm’s fintech and artificial intelligence initiatives and works with clients on issues related to cutting edge technologies, such as blockchain, virtual currencies, big data and data analytics, artificial intelligence, online lending, and payments technology.

Mr. Stein previously served in senior regulatory, policy-making, and management positions at the Consumer Financial Protection Bureau (CFPB) and the Federal Reserve Board (FRB). He played a significant role in developing regulations and policy on credit reporting, financial privacy, retail payments systems, consumer credit, fair lending, overdraft services, debit interchange, unfair or deceptive acts or practices, and mortgage origination and servicing. Mr. Stein draws upon his government experience in representing clients before the CFPB, the FRB, and other regulatory agencies and leverages his insights into the regulatory process to provide clients with practical, actionable advice.

Photo of Mike Nonaka Mike Nonaka

Michael Nonaka is a partner in the firm’s Financial Institutions practice group. He represents banks and other financial institutions on a wide variety of bank regulatory, enforcement, legislative and policy issues.  Mr. Nonaka also is co-chair of the firm’s Fintech Initiative and works…

Michael Nonaka is a partner in the firm’s Financial Institutions practice group. He represents banks and other financial institutions on a wide variety of bank regulatory, enforcement, legislative and policy issues.  Mr. Nonaka also is co-chair of the firm’s Fintech Initiative and works with a number of banks, lending companies, money transmitters, payments firms, technology companies, and service providers on innovative technologies such as big data, blockchain and related technologies, bitcoin and other virtual currencies, same day payments, and online lending.