Biden Taps Dodd-Frank Bailout Defender for Federal Reserve Post

President Joe Biden has nominated the Obama-era Treasury staffer Michael Barr to serve as the vice chair for supervision at the Federal Reserve; Barr has defended Dodd-Frank’s Wall Street bailout mechanism.

Biden nominated Barr as his replacement pick for Sarah Bloom Raskin, whom he originally tapped for the vice chair position at the nation’s central bank.

Senate Banking Committee Chairman Sherrod Brown (D-OH) has backed the nominee, who also has a good relationship with progressive champion Sen. Elizabeth Warren (D-MA). During his time at the Obama Treasury Department, Barr served as a chief negotiator on the 2010 Dodd-Frank financial reform bill.

“Now more than ever, we need a full Fed Board — including a Vice Chair of Supervision. The Vice Chair of Supervision plays a critical role in protecting our financial system and must prioritize strong financial regulation, and identify and stay ahead of risks to our economy. … Michael Barr understands the importance of this role at this critical time in our economic recovery,” Brown said in a statement.

Brown also called on Republicans to “abandon their old playbook of personal attacks and demagoguery and put Americans and their pocketbooks first.”

However, Republicans see little appetite for stopping their attacks against Biden’s nominees.

Senate Banking Committee Ranking Member Pat Toomey (R-PA) slammed Barr in a statement on Friday for backing the Dodd-Frank bailout mechanism.

“Michael Barr has defended Dodd Frank’s big-bank bailout mechanism, which enshrined into law taxpayer bailouts of banks,” Barr said. “He was also the primary author of the unconstitutional and unaccountable CFPB. For these and other reasons, I have concerns about his nomination, but I look forward to meeting and discussing these and other matters.”

Barr has defended the Dodd-Frank Wall Street bailout mechanism, otherwise known as the Orderly Liquidation Authority (OLA).

Toomey tried to replace the OLA with a more measured financial bankruptcy process.

The Biden Fed nominee also supported the Consumer Financial Protection Bureau (CFPB), which has been criticized as an unaccountable bureaucracy.

Barr has criticized the Trump-era Economic Growth, Regulatory Relief, and Consumer Protection Act, which provided regulatory relief to many small and medium-sized banks suffering from the regulatory impact of Dodd-Frank.

Raskin fell as a nominee for the position after she had called to bankrupt the oil and natural gas industry and after many lawmakers had raised concerns about her using her influence to secure a lucrative financial tool for her company.

Another banking nominee, Saule Omarova, who was tapped to serve as the Comptroller of the Currency, fell after she too had called to bankrupt America’s natural gas industry.

Barr’s nomination may have trouble getting support from Democrats and Republicans at a time when Americans remain concerned about the Biden and the Fed’s inability to curb inflation.

Sen. Joe Manchin (D-WV) said that “our elected leaders and the Federal Reserve continue to respond with half-measures and rhetorical failures searching for where to lay the blame.”