WASHINGTON — The incoming Obama administration has asked Comptroller of the Currency John Dugan to leave — but so far he has no intention of complying with the request, sources said.
Mr. Dugan, a Republican, has insisted he wants to stay until the end of his term, which expires in August 2010. "Comptroller Dugan plans to serve his full term," an OCC spokesman said Wednesday.
Attempts to resist the will of an incoming president are usually futile. Ellen Seidman, the director of the Office of Thrift Supervision under President Clinton, at first fought the incoming Bush administration's efforts to oust her, but she eventually resigned. Ms. Seidman said she still believes that legally, the heads of the OCC and OTS should be allowed to serve out their terms, but that remaining in office when a new administration wants a successor in place is bad for the agency.
"It would have been a really difficult situation for not only me, but more importantly my agency, to be in a position where the administration didn't trust the person running it," she said in an interview Wednesday. "That's why I submitted my resignation."
But Mr. Dugan has the support of several past comptrollers, who wrote in a letter to the editor to American Banker in November that the position should not automatically change hands with a new administration.
It "would tend unduly to politicize the office if incumbents were required or expected to tender pro forma resignations in midterm," said the letter, which was signed by five former comptrollers, including John D. Hawke and Robert Clarke.
By statute, a president must notify the Senate in writing if he wishes to remove a comptroller from office.
Despite Mr. Dugan's insistence that he would stay on, rumors were already swirling about potential successors. Two possibilities named were Chuck Muckenfuss, a partner at Gibson, Dunn & Crutcher LLP and a senior deputy comptroller for policy at the OCC from 1978 to 1981, and Greg Baer, deputy general counsel of regulatory and public policy for Bank of America Corp. and a Treasury assistant secretary for financial institutions in the Clinton administration.
Federal Deposit Insurance Corp. Chairman Sheila Bair is expected to retain that post, sources said. Ms. Bair, also a Republican, has significant support from Democratic leaders on Capitol Hill because of her outspoken advocacy for streamlining loan modifications to prevent foreclosures. OTS Director John Reich has already said he plans to resign soon.