WASHINGTON — The Senate on Thursday confirmed Joseph Otting 54-43 to be the next comptroller of the currency.
The former OneWest executive will take the reins from acting Comptroller Keith Noreika, who has made waves since being appointed in May as a special government employee to lead the agency.
Most Democrats opposed Otting’s confirmation because of his role at OneWest, which earned a reputation as a foreclosure mill during the financial crisis. Because of recent changes in Senate rules, however, Republicans did not need to attract any Democratic votes to approve Otting. Still, two Democrats crossed the aisle to vote in favor of his nomination (others either were not present or abstained).
During a July nomination hearing, Otting said his experience as chief executive of OneWest was an asset rather than baggage. Steven Mnuchin, now the Treasury secretary, led an investor group in 2009 that acquired the assets of the failed IndyMac, which was taken over by the Federal Deposit Insurance Corp. as the housing market collapsed in 2008. Mnuchin started OneWest and hired Otting as CEO.
“We were the first to offer principal forgiveness. We lowered interest rates and we modified payments and moved principal to the back, so people could afford their homes,” Otting said of his experience at OneWest, which became an incubator for the Treasury Department’s mortgage modification program.
However, critics including Sen. Sherrod Brown, D-Ohio, said Otting and Mnuchin got a sweetheart deal and needlessly foreclosed on homeowners.
The crisis “was an opportunity to profit by flipping failing banks bought at rock-bottom prices, and foreclosing on working families, all while raking in taxpayer dollars,” Brown said during the nomination hearing.
Otting is likely to follow a blueprint released in June by the Treasury to reform the financial system.
It is unclear, however, whether Otting will be as supportive of creating a bank charter for technology companies as Noreika, who expanded on an effort started by former Comptroller Thomas Curry to create a “fintech” charter.
But Otting will likely be supportive of Noreika’s decision to remove 2013 guidance on deposit advance products and said during a nomination hearing that “we have pushed” small-dollar loans “out of the banking sector … I think they should be put back in the banking sector.”
During his nomination hearing, Otting was critical of the “complexity” of Dodd-Frank Act capital requirements. He said they make it "incredibly difficult for banks to bounce around between all the categories, risk-based, leverage.”