Man Bites 'Lapdog'

It's one thing to see senators vote against your nomination to a major agency post, but it's quite another when they resort to name-calling to boot.

Such was the case last week for Joseph Smith, who was selected by President Obama to lead the Federal Housing Finance Agency.

Richard Shelby, the No. 1 Senate Banking Committee Republican, not only voted against Smith's nomination, saying he would be a "tool" of the administration, but later issued a press release calling Smith a "lapdog."

Shelby said that with so much taxpayer money already wasted and more on the line, lawmakers could not afford to take the director position lightly.

"Fannie Mae and Freddie Mac have already cost taxpayers $150 billion. Absent a strong regulator, future losses could be even greater. The first confirmed director of the FHFA must be a knowledgeable, effective and independent regulator whose primary focus must be on protecting the American taxpayer," the Alabama lawmaker said in the press release.

In Shelby's view, Smith, the North Carolina Banking commissioner, does not fit the bill.

"In my judgment, Mr. Smith is not the best candidate for this job," Shelby said. "With all due respect to his background, Mr. Smith has no experience running or regulating institutions this massive and complex."

"By his own admission, he believes there is a great deal he has yet to learn," Shelby continued. "This is not a position that lends itself to on-the-job training. The first confirmed director must hit the ground running equipped with the skills and experience needed to be a strong regulator free from influence by the current administration. In other words, we need a watchdog, not a lapdog."

The White House did not respond to the criticism, but one has to wonder if Smith could send out his own press release, calling Shelby a "meanie."


President Obama, trying to improve relations with business interests, met with 20 chief executives last week. But one group was noticeably absent.

The Dec. 15 meeting at the Blair House featured representatives from leading U.S. companies in Silicon Valley, telecommunications, manufacturing and energy — but no one from a U.S. commercial bank attended.

There were, however, two financiers: American Express chief Kenneth Chenault and Robert Wolf, head of U.S. operations for the Swiss banking powerhouse UBS AG.

To be sure, big-bank CEOs have had plenty of face time with the president. Earlier this month Obama held a one-on-one with JPMorgan Chase's Jamie Dimon.

But it is unclear if bankers' absence from last week's meeting was intentional. Regardless, some still saw a big-bank presence.

Writing on the Huffington Post, Robert L. Borosage, president of the Institute for America's Future, noted that at least two companies represented at the meeting, General Electric and UBS, received funds under the financial bailout.

"If Obama is at peace with America's corporate barons," Borosage said, "he isn't doing his job."

In the Interim

The Federal Deposit Insurance Corp. has shuffled key officials to serve in interim roles under Chairman Sheila Bair.

Doreen Eberley, who was the agency's regional director in New York, is now the acting deputy to Bair in Washington. Michael Krimminger, Bair's deputy for policy, is now the FDIC's acting general counsel. Meanwhile, Daniel Frye, who ran the agency's Boston office, has become the acting New York regional director.

The FDIC has been without a permanent general counsel since Michael Bradfield left the agency in August. Since then, numerous FDIC officials have served on an acting basis as the agency's chief lawyer. Most recently, Krimminger is succeeding Rick Osterman, who remained a deputy general counsel.

Wired CFPB

The Treasury Department announced it has hired leadership for the technology team of the Consumer Financial Protection Bureau.

Tim Duncan will lead the CFPB's technology operations and David Forrest will lead the online engagement team.

"In building the new consumer bureau, we have an opportunity to design an agency that uses 21st-century technology to communicate with and on behalf of American families," said Elizabeth Warren, assistant to the president and special adviser to the Treasury secretary. "Tim and David will be instrumental in infusing the CFPB with the tools it will need to empower families and to become an effective cop on the beat patrolling consumer credit markets."

Duncan recently served as the president of Story Street Investment Management, a firm he founded that provides evaluation of alternative investments for clients in hedge funds to Broadway musicals. He served on a Massachusetts statewide commission as an appointee of former Gov. Mitt Romney and founded American Business Leaders for Financial Reform.

Forrest has spent 16 years at The Motley Fool, a multimedia financial services company that promotes investor education. Recently he managed The Motley Fool's international subsidiary in London.


Last week former British Prime Minister Gordon Brown visited "The Daily Show" to promote his new book, "Beyond the Crash," and the conversation quickly turned to how much bankers just don't get it.

"What people are really worried about — same in America — [are] bankers," Brown said. "One banker said to me, 'I'm only beginning to understand the risk I've been taking,' and really, that sums up the problem we've had."

"When did he say that to you?" the host of the show, Jon Stewart, asked.

"One of them said it to me just before his bank collapsed," Brown replied.

Brown said Britain was in a better position to deal with the crisis, because as a condition of banks' taking capital the government took them over.

In reference to the initial lack of conditions for the Troubled Asset Relief Program, Stewart responded, "You know what we made as a condition of that liquidity? We didn't."

He also said that Brown was asking too much in one of the book's chapters, Markets Need Morals.

"When would that happen? Because in essence … a market is a great white shark: it just feeds," Stewart said.

When Brown called on American banks to "get their act together" and provide greater transparency, Stewart dismissed it.

"You are saying we are all Socialists now," Stewart said. "You are calling for revolution."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.