Acting U.S. Banking Regulator Is Recused From Decisions on Many Banks -- 2nd Update
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. About a fifth of the 80 entities on the recusal list are banks regulated by the comptroller's office or holding companies that own such banks, an OCC spokesman said.
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.
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(END) Dow Jones Newswires
June 09, 2017 15:33 ET (19:33 GMT)