President Trump can still put his stamp on the Office of the Comptroller of the Currency (OCC) without causing another confrontation in the Senate over his nomination. Instead of nominating the current acting comptroller to head the national banking system, the president’s best choice would be the OCC’s senior deputy comptroller for bank supervision policy, a member of its executive committee.
Nominating Grovetta Gardineer, whose name has been floated as a possible candidate, would also be President-elect Joe Biden’s best choice. Just as he made political history by choosing a woman of color for our vice president, Biden can make banking history by choosing Gardineer, who is qualified and experienced for this position.
This would be a major change from the past; each of the 31 comptrollers since the OCC was established has been a white man. This is somewhat ironic since Abraham Lincoln, one of the earliest advocates of justice and equal opportunity, established the OCC with the 1863 National Currency Act, later amended to become the 1864 National Banking Act.
Much has been written about the need for diversity and inclusion in banking C-suites, but this has not been the case regarding their regulators. A recent Brookings study concluded there is a “virtual absence of African American financial regulators,” noting that there has never been a Black chairman of the Federal Deposit Insurance Corporation (FDIC), Securities and Exchange Commission (SEC) or Commodities Futures Trading Commission (CFTC). This also has been the case for both the Federal Reserve and the OCC, both of which impact the lives of African Americans, especially since the OCC regulates our biggest banks and 68 percent of all banking assets.
In terms of geographic diversity, 24 of the 31 (77 percent) comptrollers have come from midwestern and northeastern states, with nearly half coming from just three states — Illinois (six), New York (five) and Ohio (four). Meanwhile, the South, the nation’s fastest growing and largest region with nearly 40 percent of the country’s population, has produced only five comptrollers — two from Texas and one each from the District of Columbia, South Carolina and Virginia. This is even more surprising considering some of our biggest banks, such as Bank of America and Truist, are based in the South, as was Wachovia before its acquisition by Wells Fargo.
Although the banking industry is clearly supportive of diversity and inclusion, bankers most likely would be comfortable with a comptroller who has considerable real-world supervisory experience, instead of a lawyer, academic or Beltway bureaucrat with a Trump- or Biden-friendly contact list.
Community groups — who are probably the most sensitive to the need for diversity and inclusion within the industry and among its regulators — likely would prefer someone with a strong consumer background. This is true now more than ever, with the recent fines on Citigroup, JPMorgan Chase and Goldman Sachs, not to mention Wells Fargo’s compliance history.
The House Financial Services Committee, with its own Subcommittee on Diversity and Inclusion, certainly would welcome a woman of color as our next comptroller. With a focus on consumer compliance, including Community Reinvestment Act (CRA) reform, they likely would want someone with significant experience in this area, especially if they have been tough on banking’s biggest rules violators. This also would be the case with Senate Democrats, who have their own diversity initiative.
The current chair of the Senate Banking Committee, during the previous unanimous approval of Housing and Urban Development Secretary Ben Carson, stated that “HUD will benefit from having a Secretary with a different perspective and a diverse background.” This also should be the case with the OCC.
With these political, geographic, industry, community group and congressional preferences for our next comptroller, Gardineer is the ideal candidate to meet all these criteria. She hails from North Carolina and holds a law degree. In addition to 10 years at the OCC, she spent 20 years with the Office of Thrift Supervision and FDIC. Besides being responsible for bank supervision and examination of policies and procedures, she also oversees the OCC’s policy units for credit, market, operational and compliance risk, as well as units responsible for international banking, capital policy, accounting policy and community affairs.
Importantly, she is well known among community groups and the industry as an expert on critical consumer issues such as CRA and fair lending. Having known and worked with her for over a decade — sometimes in agreement and often in disagreement with her and the OCC — I would be the first to write a letter of recommendation for her as the next Comptroller.
Grovetta Gardineer not only would bring a different perspective and background than the previous 31 comptrollers, she also would make the OCC a diversity role model for our financial regulators. Most importantly, she would provide continuity of leadership to help navigate our national banking system through the coronavirus pandemic and recession, without creating another Senate confirmation confrontation.
Kenneth H. Thomas, Ph.D., is president of Miami-based Community Development Fund Advisors, LLC. He taught finance at the University of Pennsylvania’s Wharton School for more than 40 years, and is the author of “The CRA Handbook.”