The dream team or…something.
By Kevin Dietsch/Pool via Bloomberg.
In a week in which Donald Trump fired the person investigating his campaign’s ties to Russia, it will surely come as a shock to learn that the circumstances under which financial services lawyer Keith Noreika became the head of a powerful Wall Street regulator were not totally above board.
The story begins here: Donald Trump has promised his friends in the banking industry that he will gut financial regulations. But one thing that’s prevented him from doing so, thus far, has been the head of the Office of the Comptroller, Thomas Curry, who was appointed by Barack Obama and was thus a killjoy who made it his job—because it kind of was his job—to impose tough rules and big fines for wrongdoing in the industry. It was clear, given Trump and Treasury Secretary Steven Mnuchnin’s pledge to unshackle Wall Street from financial-crisis-era regulations, that Curry not only had to go, but be replaced by someone with a more friendly relationship with the banks, like Noreika.
Unfortunately, there was a problem with the longtime financial services attorney: Noreika, who reportedly worked closely with the same Wall Street companies that are overseen by the O.C.C., would have to be approved by the Senate—a process that would involve airing all of Noreika’s financial conflicts of interest. So the Trump administration devised a plan to avoid that particular obstacle. Per Bloomberg:
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…Just like that, Noreika became acting comptroller. While the OCC says Noreika has mitigated potential conflicts, there’s been no public disclosure of an ethics agreement or his former clients.
Once Noreika assumed his post on midnight May 5, President Donald Trump and Treasury Secretary Steven Mnuchin gained a needed ally in their push to undo financial regulations, an effort that has started slowly because Obama holdovers still lead key agencies.
While Trump and Mnuchin probably treated themselves to an over-cooked steak dinner to celebrate, Democrats were less than thrilled. “Mr. Noreika is an unvetted attorney who lacks the experience to serve as an independent Wall Street watchdog,” Senator Chris Van Hollen, a member of the Senate Banking Committee, told Bloomberg. “His work in the private sector creates an unprecedented series of conflicts of interest— further underscoring the need for anyone serving as comptroller to go through the Senate confirmation process.”
According to the O.C.C., Noreika’s position is meant to be temporary. While he serves as the head of the office, Noreika will be classified as a “special government employee,” which means he doesn’t need to sign an ethics pledge so long as he’s in the job fewer than 130 days in a 365-day period. As for his potential replacement, Mnuchin has reportedly recommended Joseph Otting, who served as the C.E.O. of OneWest Bank—the infamous subprime mortgage lender turned foreclosure machine that was recently chaired by—wait for it—Steven Mnuchin.