WASHINGTON — Although Thomas Curry encountered relatively little pushback at a Senate hearing on Tuesday, his path to becoming the next comptroller of the currency remains uncertain as a key Republican declined to commit to supporting his nomination.
Following the nomination hearing, Sen. Richard Shelby, the lead GOP member of the Banking Committee, said he was still examining Curry's views.
"We're looking at his record," Shelby told reporters.
The situation was more positive for Martin Gruenberg, who was nominated as chairman of the Federal Deposit Insurance Corp., as Shelby reiterated his support for the former Senate banking staffer.
The hearing on Tuesday tackled a wide range of critical issues, including how much money banks must hold as a cushion against losses, the regulatory environment for small institutions, and conflicts between state and federal banking laws.
Curry, who is an independent director on the FDIC's board, faced the toughest questioning from Shelby and Sen. Bob Corker over preemption.
Corker, R-TN, disapprovingly read a quote that Curry gave about the preemption issue in 2000, when he was the state commissioner of banks in Massachusetts.
"You suggest that federal preemption itself sometimes has the unintended consequence of limiting state regulators ability to protect consumer and ensuring a healthy banking and lending industry," Corker said. "So you're going to be in a position obviously of making sure that we have uniform national standards, and you seem in the past to have questioned that."
Curry, who would succeed acting Comptroller John Walsh, responded by saying that last year's financial reform law addressed the concern he was expressing in 2000 about the consumer-protection role of the states.
He also said: "I want to assure you, senator, that I will zealously enforce the National Bank Act, and particularly where it applies to the preemption issue."
Shelby expressed a similar concern, noting that the Treasury Department has criticized the OCC's interpretation of its preemption powers, and indicating that it will be important for the next comptroller not to cave to political pressure.
"Ultimately, I think it's incumbent upon the OCC to maintain its independence as a bank regulatory agency and to remain free from any undue influence from any external source," Curry responded.
The Republicans expressed less skepticism about the nominees when the questioning turned to the issue of how much capital banks must hold in case of losses. Shelby signaled his support for establishing tougher requirements for large banks and foreign banks, which he said have traditionally held less capital than their U.S. counterparts.
Those views got a positive reception from both Gruenberg and Curry, who noted that the Basel III process is designed to force large banks to hold more capital and also seeks to level the playing field internationally.
Gruenberg has been the FDIC's vice chairman for the last six years. For nearly 20 years prior to that, he was a staffer on the Senate Banking Committee, the same panel that will vet his nomination. He would succeed Sheila Bair, who stepped down as the FDIC's chairman this month.
In response to a question about the impact of last year's financial reform overhaul on community banks, Gruenberg said that a provision increasing federal deposit insurance to $250,000 per account has been helpful to small banks.
"On balance I believe they have come through this episode reasonably well," Gruenberg said.
He also noted that a change in the way that deposit insurance premiums are assessed has resulted in an average 30% drop of assessment for banks with less than $10 billion of assets.
Also appearing at the hearing was Roy Woodall, a veteran of the insurance industry who is nominated for a new job as the federal government's top insurance expert. Woodall's nomination has bipartisan support.
Assuming that he is confirmed, Woodall would become a voting member of the Financial Stability Oversight Council, which was established by last year's financial reform law. The council is charged with identifying threats to U.S. financial stability.
