I read with interest, the August 8th column by Kate Davidson of Politico titled “White House struggles to fill Fed small-bank spot”. The basis of the piece is that after Sarah Bloom, a former Maryland banking regulator now at the Treasury Department, and Elizabeth Duke, a longtime Virginia banker, left the Federal Reserve Board, the White House has had difficulty finding candidates to fill the vacated spots. For varying reasons, including the need to divest their interest in the family banks they run, at least some of those who have been considered from the community bank sector have declined.
Another key piece and the driving force of relevance for credit unions, is that lawmakers have been pressing the administration to nominate candidates with community banking experience. I think that presents an opportunity that should be pursued.
In the column, current or past chairmen/CEOs are listed from community banks ranging in assets of $152 million up to $1 billion. If that is the range in which the White House feels comfortable, credit unions are well versed with nearly 1,000 institutions in that demographic (there are roughly 3,000 banks in that range). From there, credit unions skew even more local, with a far greater number of institutions under the $152 million mark. If the Fed needs a “community” financial institution perspective, what better voice for that than credit unions?
The credit union representative, in addition to being a Main Street voice, would also provide a consumer perspective to the Fed’s deliberations. As member cooperatives, credit unions have long been committed to providing financial services that benefit the communities and individuals they serve. It is this consumer-centric approach that would seemingly add the perspective lawmakers are pursuing for the board.
There is also merit in adding a credit union voice to the Federal Reserve Board to work towards an element of proportional balance. Financial institutions of all charter types should have representation and the bank perspective is already present in the person of at least four current Fed governors.
The clock is ticking, however, as there is a push to identify candidates for confirmation before year-end. There appears to be an opportunity here. Let’s work together to identify and encourage qualified candidates so that we can capitalize and get credit unions a seat at the table.