Acting U.S. Banking Regulator Is Recused From Decisions on Many Banks -- Update
June 09 2017 - 2:50PM
Dow Jones News
By Ryan Tracy
The acting head of a top U.S. banking regulator has temporarily
recused himself from matters involving 80 banks, law firms and
other entities, according to documents made public Friday.
The recusal list for Keith Noreika, a former banking lawyer who
the Trump administration named acting Comptroller of the Currency
in early May, includes J.P. Morgan Chase & Co. to Bank of
America Corp. and other large banks the agency oversees.
Mr. Noreika is leading the comptroller's office until Mr.
Trump's permanent nominee for the job, former banker Joseph Otting,
is confirmed by the Senate. That process could take months. Mr.
Otting's name was sent to the Senate earlier this week.
Meanwhile, the ethics documents show Mr. Noreika will be recused
from decisions affecting many firms, from financial companies to
law firms such as his former employers, Simpson Thacher &
Bartlett LLP and Covington & Burling LLP.
The timing of the recusals varies. Mr. Noreika was recused from
matters involving Wells Fargo & Co. through May 18, covering
his first weeks on the job. He will be recused from matters
involving Bank of America until July 26 and J.P. Morgan until March
23, 2018
Senate Democrats have criticized the choice of Mr. Noreika to
lead the agency, saying he has a conflict of interest because he
once represented the banks he now oversees.
They have questioned why he hasn't signed on to an ethics pledge
that other Trump officials have signed, promising not to lobby
agencies where they work for five years after the end of their
government service.
"Mr. Noreika has recused himself from virtually all of the major
banks that the OCC regulates... how can he possibly do his job?,"
Sen. Chris Van Hollen (D., Md.) said in a statement Friday. He
added that Mr. Noreika "stands to profit from all of these
relationships the moment he finishes his work at the OCC because he
hasn't signed President Trump's ethics pledge."
A spokesman for the comptroller's office noted that under ethics
rules, Mr. Noreika "will be permanently barred from communicating
with or appearing before any executive or judicial branch employee"
concerning matters that he participated in while working for the
government, as well as barred for two years from working on matters
that were "pending under his official responsibility during the
last year of his federal service."
Treasury Secretary Steven Mnuchin, who tapped Mr. Noreika to
lead the agency, has said his banking experience would be a
positive for the regulator. "He has deep experience in helping
banks operate in a safe and sound manner, provide fair access to
financial services, and provide credit needed for business
expansion and job growth," Mr. Mnuchin wrote in a May 17 letter to
Mr. Van Hollen and others.
Mr. Mnuchin said the administration's ethics pledge doesn't
apply to Mr. Noreika because he is a temporary appointee. Mr.
Noreika's status as a temporary employee could change if he serves
for more than 130 days.
"Mr. Noreika will observe a recusal from particular matters
involving specific parties in which he knows one of the entities on
the attached list is a party or represents a party in the matter,"
the OCC's ethics counsel said in a May 24 memorandum on the
recusals.
The memo says "particular matters" include bank examinations and
enforcement actions, among other things. Mr. Noreika can receive
status reports on the matters but won't discuss recommendations or
decisions, it says.
Mr. Noreika won't be precluded from considering broadly
"policies, regulations, or legislation concerning the banking
industry," according to the memo.
Write to Ryan Tracy at ryan.tracy@wsj.com
(END) Dow Jones Newswires
June 09, 2017 14:35 ET (18:35 GMT)
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