WASHINGTON —As widely expected, President Trump has nominated former Federal Reserve governor Kevin Warsh to serve as the next chair of the Federal Reserve, sending the nomination to the Senate as the central bank prepares for a leadership transition later this year.
Warsh, 55, served on the Federal Reserve’s Board of Governors from 2006 to 2011 and was a key liaison to Wall Street during the 2008 financial crisis. If confirmed, he would succeed current Chair Jerome Powell when his term ends in May.
The nomination must be approved by the Senate, where it will first be considered by the Senate Banking Committee. The confirmation process could face complications, however, after Sen. Thom Tillis (R-NC) said he would oppose the nomination until a Justice Department investigation involving Powell is resolved.
A Sometimes Critic
The Wall Street Journal noted Warsh has been critical of some of the Federal Reserve’s policies in recent years, including the central bank’s prolonged low-interest-rate stance following the pandemic, which he has blamed for contributing to higher inflation. More recently, he has indicated support for lower borrowing costs, aligning with Trump’s calls for interest-rate cuts.
If confirmed, Warsh would serve a four-year term as chair while also holding a longer term on the Fed’s Board of Governors.
America’s Credit Unions Offers Congratulations
“America’s Credit Unions congratulates Kevin Warsh on his nomination to lead the Federal Reserve. Mr. Warsh’s previous experience serving on the Fed Board of Governors and economic advisory roles makes him well equipped to drive the central bank’s monetary policy,” America’s Credit Unions President/CEO Scott Simpson said in a statement. “At a time when American families and policymakers are focused on affordability, this announcement reinforces the importance of stability and confidence in our economic system. We look forward to learning more about Mr. Warsh’s priorities as he moves through the confirmation process. America’s Credit Unions has a strong relationship with the Federal Reserve to ensure credit unions and their 145 million members are represented in these important conversations.”
CU Exec to Testify on Capitol Hill
Separately, with many credit union representatives still in town for GAC, Kate McKune, general counsel with Park Community Credit Union in Kentucky, will testify on behalf of America’s Credit Unions before the U.S. House Financial Services Subcommittee on Financial Institutions at a hearing today titled “Fighting Fraud on the Front Lines: Challenges and Opportunities for Financial Institutions.”
McKune will speak on the challenges credit unions and other financial institutions face in combating fraud and on solutions that improve protections for consumers and businesses, America’s Credit Unions said.
The hearing begins at 10 a.m. ET. The CU Daily will have coverage.
CU-Supported Amendment Does Not Get Vote; Barr Pledges to Work With CUs
The House Financial Services Committee, meanwhile, held a markup in the Main Street Capital Access Act (H.R. 6955). As the CU Daily has previously reported the legislation has the support of America’s Credit Unions, but an amendment added from Rep. Brad Sherman (D-CA) that would give credit unions parity with an H.R. 6955 provision providing relief for the formation of new banks did not get a vote.
America’s Credit Unions said discussion of the proposal prompted a commitment from House Financial Services Financial Institutions Subcommittee Chair Andy Barr (R-KY) to continue working with credit unions on legislative priorities affecting the industry.
‘Acknowledge & Agree’
“I acknowledge and agree with the gentleman that credit unions play an important role in the diversity of our financial ecosystem, and I am happy to continue to work with you and your staff to address credit union issues, whether that’s evaluating legislative proposals or potential hearings,” Barr said during a colloquy following Sherman’s introduction of the amendment, according to trade group.
In an earlier letter to the committee, America’s Credit Unions had called the legislation a good first step, but stated, “the bill falls short of what has been a hallmark of regulatory relief and modernization efforts in the Committee over the last couple of decades – parity in relief and modernization efforts for all types of community financial institutions – both community banks and credit unions.”
