WASHINGTON — With the next comptroller of the currency expected to be named within weeks, speculation is heating up over who President Obama will nominate.

Rumored candidates are well known to the banking industry, including Federal Reserve Board Gov. Dan Tarullo, New York Banking Commissioner Richard Neiman, North Carolina Banking Commissioner Joe Smith, Treasury Assistant Secretary Michael Barr and Federal Deposit Insurance Corp. Vice Chairman Marty Gruenberg.

The selection is even more significant than usual because the regulatory reform legislation on the verge of enactment will provide a series of new challenges for the next comptroller including updating preemption standards, absorbing the Office of Thrift Supervision and implementing a litany of new regulations.

"They will be looking for somebody who has a very strong regulatory background with good executive skills because it's going to require management to combine two different agencies," said Pat Doyle, a lawyer at Arnold & Porter. "They will have a lot on their plate with implementing the new regulatory reform bill."

The administration is expected to make its choice soon, with some predicting a possible recess appointment during the Fourth of July congressional break.

The reform bill is expected to be signed by then, and the House version would remove the current comptroller, John Dugan, as soon as it becomes law and direct the president to appoint an acting head. Dugan's five-year term expires on Aug. 4.

Of the potential successors, much of the current buzz surrounds Neiman, who has a broad mix of regulatory and banking experience. He previously worked at the Office of the Comptroller of the Currency as a special assistant to the chief counsel and spent 10 years working at Citigroup in various roles before eventually becoming the president and chief executive of TD Bank USA. In 2007, then-Gov. Eliot Spitzer appointed Neiman as the superintendent of New York's banking department.

In that role, he has been a vocal advocate for the dual banking system, and was a key player in helping to convince the Senate to back off a plan to slash the Fed's bank supervisory powers. He has also served as a member of the Troubled Asset Relief Program's Congressional Oversight Panel, providing a more moderate voice to Chairman Elizabeth Warren.

"His background just immensely suits him for the position," said Ernest Patrikis, a lawyer at White & Case LLP. "He worked for the comptroller of the currency's office. He worked for a private banking organization. He has experience as a bank supervisor. He has handled himself exceptionally well on Elizabeth Warren's commission. There may be people as good as him, but I don't think there are people better than him."

Although Neiman would likely take a tough line on preempting state consumer protection laws, the banking industry does not view him as a threat because of his banking experience and prior stint at the OCC.

"It would seem Neiman may be strongest of that group," said Oliver Ireland, a partner at Morrison & Foerster LLP.

Bob Serino, a partner at Buckley Sandler and former deputy chief counsel for the OCC, said Neiman would likely take a balanced view on preemption.

"He would come with a measured view, having done some on the state side and national side," Serino said. "Whomever takes the position of a national bank regulator is going to realize that preemption is needed and is not a bad thing. I think he is going to realize when he is in that seat that there are ways of evaluating state laws."

Neiman's state experience also could serve him well as state attorneys general are likely to get more power under the reform bill.

Both the House and Senate legislation would give state AGs more flexibility to enforce statutes against national banks, although the two differ on exactly how much. The legislation is expected to still allow the OCC to preempt laws on a case-by-case basis, but it will likely face a higher threshold for invoking preemption.

Smith of North Carolina would also bring a state regulatory background to the comptroller's office, but may take a tougher stance on preemption issues. The former chairman of the Conference of State Bank Supervisors, Smith previously was a lawyer at Thacher Proffitt & Wood in Washington. He also has banking experience, including nearly nine years as the general counsel of Centura Banks Inc. and Centura Bank in Rocky Mount, N.C.

Smith has been an outspoken opponent of preemption and a proponent of tougher consumer protections.

A February speech to the Exchequer Club provides some clues to Smith's views on banking supervision. In it, he advocated for forbearance to allow banks time to work through various issues, and called for Tarp funds to be more accessible to community banks. He also criticized the Federal Deposit Insurance Corp.'s rules on private-equity investment in banks as too strict, saying they were an important source of capital.

Bob Clarke, a former comptroller who is now a senior partner at Bracewell & Giuliani LLP, praised Smith's record.

"I have a lot of admiration for Joe Smith," Clarke said. "My experience dealing with him is he has what it takes. He's a very thoughtful, measured kind of guy. He understands what bank supervision is about."

Cathy Ghiglieri, the president of Ghiglieri & Co. and a former OCC staffer, also supported Smith as comptroller.

"It would be nice to have a banking commissioner become the comptroller because from the preemption side it's a healthy balance of understanding both sides of the fence so that would be an interesting choice," she said.

Another leading candidate is Tarullo, whose name was among the first to surface months ago.

A Fed governor since January 2009, he was previously a Georgetown University law professor and campaign adviser to President Obama. He held several positions during the Clinton administration, including assistant secretary of state for economic business affairs from 1993 to 1998 and stints on the National Economic Council.

In 2008, Tarullo wrote a book, "Banking on Basel," an issue that is likely to be central to the new comptroller as the international capital standards are revamped.

While observers view Tarullo as highly qualified, it's unclear if he wants the job. His Fed term runs to 2022, and the central bank is all but certain to take on huge new responsibilities once the reform bill is enacted.

While as comptroller Tarullo would get to head his own agency, the OCC stands to lose jurisdiction to the Fed under the reform bill. Under both versions, the Fed is expected to take a more hands-on approach to supervision of systemically important companies, which would include most of the top national banks, such as Bank of America and Citigroup.

"I don't know why Tarullo would want to go to the OCC," said Cornelius Hurley, a banking and financial law professor at the Boston University School of Law. "He would be leaving an agency that is gaining power to an agency that is losing power."

But Obama also could opt for Gruenberg or Barr, both of whom are considered more pro-consumer.

"I don't think they are very sympathetic to the banking industry," said Bert Ely, a bank consultant.

Barr has been one of the Treasury's main salesmen of its regulatory reform proposal, focusing much of his efforts on the creation of a consumer protection agency. During that push, he has been extremely critical of large banks, most of which are overseen by the OCC.

"I don't think it's a surprise that big banks and institutions that benefited from the status quo want to keep it that way," Barr told American Banker last year after unveiling the administration's blueprint for reform. "It's unacceptable to us. It's a very hard argument for a big bank to make that the status quo on consumer protection was enough, that consumers were protected enough during the financial crisis. I think that's a horrible position for them to be in."

Barr also advocated for eliminating preemption altogether. Prior to working at the Treasury, Barr taught at the University of Michigan Law School, where he advocated for stronger housing loan modification policies. He also was a Treasury deputy assistant secretary during the Clinton administration.

"From the banker's point of view, they wouldn't want someone inclined for states to override preemption," said Bill Longbrake, an executive in residence at the University of Maryland's Robert H. Smith School of Business and a former vice chairman of Washington Mutual Inc. "That will be enormous, because the next round after the financial reform is implementation."

Barr's background does fit with past comptrollers, but his previous position as a professor is consistent with other Obama picks.

"There are lots of instances the administration has looked at academia and that would go in Barr's direction," Hurley said. "Does he have the management capabilities to merge two agencies? Probably not. That would be something he'd have to overcome."

But given his background, Barr is also seen as a candidate to head the new consumer agency, which is expected to be created by the reform bill.

Gruenberg has an even longer history with the banking industry. From 1993 to 2005, he served as senior counsel to then Sen. Paul Sarbanes, D-Md., who at one point chaired the Banking Committee and was actively involved in industry issues. Since 2005, Gruenberg has been FDIC vice chairman. Although he has not been controversial in that role, he is seen as a fierce consumer advocate and a strong opponent of preemption.

"Marty has been an unabashed consumer advocate for a very long time and that goes back very far to when he was in the Senate," Longbrake said.

While the industry has concerns about his possible appointment as comptroller, Gruenberg's contacts on Capitol Hill could help his nomination. "The pro is he is well received on the Hill," said Larry Kaplan, a lawyer at Paul, Hastings, Janofsky & Walker LLP. "The con is he is coming from the FDIC and not the most bank-favored background. I don't think anyone will criticize him as too close to the industry so in some ways he may be the perfect regulator."

Yet, some sources said Gruenberg is more likely to stay at the FDIC to succeed Chairman Sheila Bair, whose term ends in June 2011.

In addition to blending in the OTS and the new preemption rules, the comptroller will be heavily involved in setting new capital and liquidity standards, among other requirements laid out in the reform legislation.

"We are entering a new world and it's very hard to see how that plays out, but it's going to be a very dynamic time the next several years," Ireland said. "It's going to present a lot of opportunities for the next comptroller."

Diane Casey-Landry, senior executive vice president of the American Bankers Association, agreed. "It's going to be a very tough job. "It has a lot of management challenges, particularly with the integration of OTS," she said. "Whoever gets the job has to be a very good manager."

Tom Vartanian, a partner at Fried Frank Harris Shriver & Jacobson, said implementing the regulatory reform bill will dominate most of the new comptroller's time. "The new comptroller will be a part of the reconstruction of the financial landscape so it's going to be an extremely important period of time and an extremely important position," he said. "Given the massive changes going to be made in the regulatory structure having someone deep in regulatory issues will be very important."

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