(Bloomberg) -- A former Fannie Mae lawyer and business associate of Treasury Secretary Steven Mnuchin will soon ascend to the top of one of Wall Street banks’ main regulators.
Brian Brooks is poised to take the reins at the Office of the Comptroller of the Currency, following OCC chief Joseph Otting’s Thursday announcement that he plans to step down. Brooks, a former Fannie general counsel and ex-vice chairman at Mnuchin’s OneWest Bank, will be thrust into a job that is grappling with the financial carnage of the coronavirus pandemic and a rift with other regulators over a key banking rule.
Unlike Otting, who will leave the OCC after finishing his primary goal of overhauling the Community Reinvestment Act, Brooks has a deep well of Washington experience. Mnuchin installed Brooks in March as Otting’s successor. Like Otting, he is also a former colleague of Mnuchin’s at OneWest, the bank that Mnuchin made a fortune off of after buying it at the depths of the 2008 financial crisis.
Brooks will take over at a challenging time. Besides the struggles of the banking industry amid the Covid-19 crisis, the OCC has broken with other agencies on policy. The most recent example is this week’s re-write of the CRA without the Federal Reserve and Federal Deposit Insurance Corp. signing on. The agencies have also split on a rule governing banks’ leverage.
Because Brooks was named “first deputy” comptroller when appointed, he’s Otting’s automatic successor under the law. The agency has been run by such acting comptrollers for extended periods of time in the past. President Donald Trump would still need to nominate Brooks and have him confirmed by the Senate before he could be given full status as comptroller of the currency.
Otting is leaving amid intense criticism from Democratic lawmakers. Sherrod Brown, the highest ranking Democrat on the Senate Banking Committee, accused Otting of ramming through his CRA revamp, while he “ignored thousands of thoughtful comments from civil rights leaders, community development advocates, and local leaders.” House Financial Services Committee Chairman Maxine Waters ripped Otting for stepping down during the pandemic, and said Congress will not let his changes to the CRA stand.
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