WASHINGTON — Lawmakers strongly criticized Acting Comptroller of the Currency John Walsh Wednesday, saying his recent positions on capital requirements prove the administration needs to find a permanent successor quickly.
Sen. Jack Reed, D-R.I., said Walsh's stance on capital shows "he is not interested in leading an agency with ensuring the safety and soundness of our financial institutions."
That sentiment was shared by Sen. Jeff Merkley, D-Ore., who said Walsh has "demonstrated once again that he just doesn't get it."
"He persists in arguing for the minimal capital standards and lax regulation that brought down our entire economy in 2008," Merkley said.
Reed, who like Merkley sits on the Banking Committee, said in a press release he and Rep. Sander Levin, D-Mich., have asked the White House "to fundamentally rethink" the Office of the Comptroller of the Currency's "leadership and ensure that American taxpayers are never again on the hook for Wall Street's misdeeds."
Walsh has been acting comptroller for nearly a year. While several names have been floated as potential choices for the permanent comptroller job, the administration has yet to select a nominee.
The lawmakers cited comments Walsh made in a speech Tuesday that current capital levels in the banking industry are "extraordinarily high." The regulator has urged a cautious approach in the pending reforms of the international Basel capital standards.
But Reed said Walsh's stance ignores recent history.
"Mr. Walsh seems to have developed a dangerous case of amnesia — seemingly forgetting that banks failed and didn't have enough capital, forcing taxpayers to bail them out," he said.
"Excessive short-term oriented risk taking by banks, borrowers, and investors was a significant contributor to the financial crisis together with lax regulation that tolerated inadequate capital levels."
But the OCC said Walsh never suggested a reduction in capital.
In his remarks to the Centre for the Study of Innovation, Walsh "supported increased capital requirements," an agency spokesman said. "The speech urged caution about the cumulative effect of many new requirements and about going too far to a point where restrictions inhibit banks from meeting the credit needs of citizens, communities and businesses which are central to a vibrant economy."