If confirmed to head the Office of the Comptroller of the Currency, Joseph Otting would be one of the last major regulatory appointments by President Donald Trump. | Nick Ut/AP Trump nominee, once probed by bank regulator, now set to head the agency Joseph Otting's background has sparked a fierce backlash against the nomination from Senate Democrats.

The Senate voted to confirm Joseph Otting as comptroller of the currency on Thursday, putting the former banker in charge of a regulator he once battled with over his firm's foreclosure practices.

The vote was 54-43, with two Democrats voting in favor of President Donald Trump's nominee.


Otting was CEO of OneWest Bank, a lender co-founded by Treasury Secretary Steven Mnuchin that drew criticism over its handling of foreclosures after the financial crisis. The bank was scolded by its federal regulator in 2011 for not properly overseeing the loans of thousands of people at risk of losing their homes and was bound by a consent order for four years.

Now, it will be Otting's job to punish such violations by national banks.

His background has sparked a fierce backlash against the nomination from Senate Democrats.

"This Administration is putting the banking industry back in charge of policing itself," Sen. Sherrod Brown (D-Ohio) tweeted during Otting's confirmation vote. "Joseph Otting is yet another bank exec who profited off the financial crisis who is being rewarded by the Trump Administration with a powerful job overseeing our nation’s banking system."

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Still, Sens. Joe Manchin (D-W.Va.) and Heidi Heitkamp (D-N.D.) voted with Republicans on Thursday to confirm Otting.

As head of the Office of the Comptroller of the Currency, Otting would be one of the last major regulatory appointments by Trump, a lineup that's likely to go much lighter on overseeing the nation's financial institutions and to peel back some post-crisis rules.

Otting has not previously served in government. Like some of Trump's other appointees, his industry background is cause for celebration among congressional Republicans, who argue that bureaucrats and academics who have dominated the regulatory ranks have led to less practical policymaking.

"I actually find that refreshing, versus bureaucrats that just ride this escalator learning how to regulate, regulate, regulate more, so I think that’s a good thing, not a bad thing," Sen. Thom Tillis (R-N.C.) said of industry experience during Otting's confirmation hearing.

By taking the reins of an agency deeply involved in supervising national banks, Otting — an alumnus of U.S. Bancorp, Union Bank of California and Bank of America — will be in a strong position to implement the regulatory rollback that Trump has promised will spur lending.

But some of that work has already started this year under acting Comptroller Keith Noreika, who was brought in from a law firm to run the agency — an unusual setup since acting heads are usually drawn from the ranks of existing agency officials.

Noreika used his temporary position to speak boldly about controversial topics, including suggesting that banks should be allowed to own non-financial companies, and vice versa, which would be a radical change to U.S. law.

The chief of staff and chief counsel under former Comptroller Thomas Curry, an appointee of President Barack Obama, departed from the agency under Noreika, giving Otting the chance to fill those two top staff positions with his own people.

Noreika also secured some concrete policy changes, such as making it easier for national banks to make small, short-term loans to customers who regularly receive direct deposits. That move is likely supported by Otting, who in his July confirmation hearing lamented that banks had been pushed out of the small-dollar lending sector.

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Otting also said during the hearing that the various layers of capital requirements imposed on banks are “highly complex” and need to be examined. But he had some praise for the regulatory work done after the crisis.

“The regulatory system we have in place today has resulted in banks understanding their risks much better than they ever have, and we have better capital levels,” he said. “I am a believer in a well-capitalized banking system.”

He mentioned his desire to ease regulations on community banks and emphasized the importance of improving financial access for lower-income and minority people, including to affordable housing.

“A big concern is that a lot of people at the lower echelon ... are not qualifying for banking products and services. You have branches going away,” he said. “There needs to be a real focus of, how do we make banking available for the lower economic and ethnic people across America?”

While Otting will probably continue in the same direction as Noreika on deregulation, with a five-year term ahead of him he will perhaps be more diplomatic, both with people outside the agency and within it.

Noreika sparred openly with Consumer Financial Protection Bureau Director Richard Cordray, another Obama appointee regarded by many Republicans as an overly aggressive regulator. That included issuing a report backing the ultimately successful Republican push in Congress to kill a CFPB rule that restricted financial companies from imposing mandatory arbitration on their customers to resolve disputes without class-action lawsuits.

Cordray announced Wednesday he plans to step down from the CFPB by the end of the month.

Noreika also took a top-down approach in dictating policy to staff, leading to a drop in morale at the OCC, according to sources close to the agency.

“I believe the OCC’s greatest resource is its staff of highly trained, professional bank supervisors and support personnel,” Otting wrote to Brown after his hearing.

Otting will once again work under Mnuchin, but only in the loosest sense. The OCC is an independent agency housed within Treasury, meaning that Otting has complete discretion over supervisory and enforcement matters but defers to the department on management-related issues.

The new comptroller will now be required to divest a range of investments in financial companies. He will divest call options and unvested restricted stock units from CIT Group within 90 days of his confirmation, which will yield an accelerated $10.5 million payout, according to his June 23 ethics agreement.

The former OneWest CEO kept those assets after his bank was bought in 2015 by CIT Group, which then terminated his employment.