The Biden administration said Friday it intends to nominate Michael S. Barr, a law professor and former Obama administration official, as deputy chairman of the Federal Reserve.
The position – one of the best places for financial regulation in America, as it strengthens the supervision of large banking holding companies, including Bank of America and Goldman Sachs – proved to be particularly difficult to borrow.
The administration’s original nominee, Sarah Bloom Ruskin, failed to win Senate approval after Republicans opposed her writing on climate finance oversight and took advantage of her limited responses to her work in the private sector. Senator Joe Manchin III, a West Virginia Democrat, joined Republicans in their decision not to support her, ending her chances.
Mr Barr, dean of the School of Public Policy at the University of Michigan, could be more fortunate in securing broad support because he is considered more moderate. But his path to confirmation may still be challenging.
A lawyer and regulatory expert, Mr Barr was a leading contender to be nominated for currency controller, but encountered opposition from the Progressive Democrats. Some of these grievances focus on his work in government: As an employee of the Treasury Department during the Obama administration, Mr. Barr played an important role in drafting the Dodd-Frank Act. The law renewed financial regulation after the 2008 financial crisis and created the role for which he is now nominated. But during the debate with the controller, some criticized him for opposing even tougher measures for large banks.
Other opponents focused on him work in the private sector with financial technology and the cryptocurrency industry.
But President Biden described Mr Barr on Friday as a qualified candidate who would bring years of experience to the Fed.
“At least there is strong support from across the political spectrum,” the president said in a statement announcing the decision. He noted that Mr Bar had been confirmed in his post at the Ministry of Finance “on a bipartisan basis”.
And several key lawmakers have indicated they will support him.
Sen. Elizabeth Warren, a Massachusetts Democrat and progressive, has signaled her support for Mr Barr’s candidacy. Mr Barr and Mrs Warren played a key role in setting up the Office of Financial Consumer Protection.
“I intend to support President Biden’s nomination for this important role in the Fed,” Ms. Warren said in a statement.
Mr Barr said he would sign an ethical pledge that could help ease worries about his ties to the financial technology industry, said a man familiar with the matter, who is not authorized to speak in public. The pledge Ms. Warren asked all Fed nominees to sign includes a promise not to work for or for financial companies for four years after leaving office.
Sen. Sherod Brown, an Ohio Democrat and chairman of the Banking Committee, said in a statement: “I will support this key candidate and strongly urge my Republican colleagues to abandon their old book on personal attacks and demagoguery.”
Sen. Patrick J., a Republican-nominated member of the committee. Tumi of Pennsylvania said reserves. “Michael Barr defended the Dodd-Frank rescue mechanism, which enshrined in law the rescue of banks from taxpayers,” Mr Toomey said in a statement. “He was also the main author of the unconstitutional and unaccountable CFPB. For these and other reasons, I have concerns about his nomination, but I look forward to meeting and discussing these and other issues.
Ian Katz, managing director at research and consulting firm Capital Alpha, on Friday gave Mr Barr a 60 percent chance of confirmation, as he is more moderate than Ms Ruskin and a well-known player in the banking industry. However, Republicans can still oppose it, so Mr Katz said his confirmation was not a “stab”.
If he does not garner Republican votes, Mr Barr will have to maintain the full support of Democrats in order to pass through the Senate.
Mr Barr complemented Mr Biden’s list of candidates for the five open positions at the central bank.
The other nominees – Jerome H. Powell for another term as chairman of the Fed, Lael Brainard as vice president and Lisa D. Cook and Philip N. Jefferson for seats on the Board of Governors – are awaiting confirmation. These nominations passed the Senate Banking Committee, the first step towards confirmation, and a Senate-wide vote is expected in the coming weeks.
Mr Biden said he would work with the committee to get Mr Bar to his first vote quickly, and called for a quick confirmation of the others.