“We need to undo the damage caused by the past four years of policy: rebuild a strong Consumer Financial Protection Office and build resilience in the financial system with stronger capital and liquidity regulations, for example,” he said in June 2020.
Whoever is chosen as the currency controller would struggle with how to reduce the number of people who are excluded from the financial system – a circumstance that undermines their ability to get government aid or take out loans, especially if they have no credit scores.
The new regulator would also oversee the national banking system in a time of technological turmoil, with traditional lenders facing competition and business opportunities from budding online lenders and financial applications – innovation that could lead to more efficient and equitable delivery of financial services, but also more consumer abuse.
The application of the Community Reinvestment Act, a 1977 law designed to combat discriminatory credit practices by banks, should be one of the regulators’ first focuses in the Biden administration. A Trump-appointed controller, Joseph Otting, revised the historic anti-redlining law without the support of the other two federal bank regulators: the Federal Reserve and the FDIC. His action was also contested by Democrats and community groups and faced bank skepticism.
The Fed has already started to work on an alternative approach.
Democrats also pushed for a Biden nominee to reverse other Trump-era OCC actions, including rules they believe make it easier for payment lenders to partner with banks to bypass state interest rate limits.
Baradaran teaches at the University of California at Irvine Law School, where she is associate dean for diversity and inclusion. She wrote a book called “The Color of Money: Black Banks and the Racial Wealth Gap,” which focuses on the barriers faced by black-owned financial institutions and the dynamics behind the barriers to building wealth faced by black Americans.
Barr is dean of public policy at the University of Michigan and a senior non-resident fellow at the Center for American Progress. He served as deputy treasury secretary for financial institutions in 2009 and 2010 and served in the Obama White House before that. He also worked at the Treasury under President Bill Clinton.