The acting head of a government agency that oversees the US banking sector will be unable to work on issues involving dozens of the country's biggest banks, due to his extensive history as a lawyer representing the financial industry.
Keith Noreika, who was tapped to serve as acting Comptroller of the Currency while Trump's permanent nominee goes through the confirmation process, has recused himself from matters concerning banks including JPMorgan Chase, Goldman Sachs, Citigroup, and TD Bank.
Noreika has worked at elite law firms Covington & Burling LLP and Simpson Thacher & Bartlett LLP, and represented Wachovia in a case that went to the Supreme Court. He either advised or represented other large banks, including Mellon Financial Corporation (now part of the Bank of New York Mellon) and Bank of America.
Due to ethical concerns raised by that work, he must now recuse himself from matters at the Office of the Comptroller of the Currency (OCC) which involve dozens of financial institutions, according to a late May memo made public on June 9 and published by the Wall Street Journal.
The regulator's ethics chief said in the memo that Noreika "will observe a recusal from particular maters involving specific parties in which he knows one of the entities ... or represents a party in the matter." The recusal covers a wide range of activity for the chief bank regulator, including "examinations, enforcement actions, contracts, and litigation."
Noreika is not a normal appointee. He avoided Senate confirmation through an unusual maneuver — he was given a deputy job at the OCC, and took the top job when its Obama-appointed director was removed. Both his path into the job and his past experience have been criticized by Senate Democrats, who see him as too close to the industry he now oversees.
His recusals have different timespans — the Wells Fargo recusal expired last month, the Bank of America recusal will expire in July, and the JPMorgan Chase recusal will expire in March 2018.
The memo details a specific procedure for what Noreika should do if briefings or conversations "segue into a discussion" on the issues he must recuse himself from. In those cases, "Mr. Noreika will step out of the room, or if it would be disruptive to do so, he will advise those present of his recusal and refrain from offering any comments, recommendations, or decisions on the matter."
The White House has already put forward a permanent replacement for Noreika. The nominee, Joseph Otting, ran OneWest, a regional bank in California formed from the remains of IndyMac, a failed lender, following the financial crisis.
The investor group that formed OneWest was led by Steven Mnuchin, Trump's now-treasury secretary. Mnuchin hired Otting as chief executive in 2010. OneWest was bought by CIT Group in 2015.
The nominee to run the OCC on a permanent basis is Joseph Notting. An earlier version of this post misstated his name.
Matthew Zeitlin is a business reporter for BuzzFeed News and is based in New York. Zeitlin reports on Wall Street and big banks.
Contact Matthew Zeitlin at email@example.com.
Got a confidential tip? Submit it here.