FOR IMMEDIATE RELEASE
Monday, March 26, 2018
Contact: Nick Jacobs, 202-618-6430 or njacobs@bettermarkets.com
Washington, D.C. – Dennis Kelleher, President and CEO of Better Markets, issued this statement following reports that the President of the San Francisco Fed has been selected to be the next President of the New York Fed:
“After being AWOL and failing to stop Wells Fargo’s decade-long illegal conduct, the President of the San Francisco Fed should not be promoted to be President of the most important regional office in the entire Federal Reserve System, the New York Fed. That would reward failure and send the wrong message to the biggest banks in the country that the Fed really does not take bank supervision seriously or understand its mandate to protect bank customers from illegal and predatory conduct. Given that the New York Fed already has a well-earned reputation for being more of cheerleader than a supervisor of the nation’s biggest banks, this promotion is doubly bad.
“Adding insult to injury, such a promotion also confirms again that the Federal Reserve System is dangerously insular, out-of-touch and unaccountable. The Fed continues to be a black box, keeping the public in the dark about what it does and why. It is shredding what credibility it has left and threatening its own independence. This is just the latest example proving that the Fed must be made more transparent and accountable.
“The San Francisco Fed was and remains the primary regulator for Wells Fargo, the biggest and most important bank under its supervision. It has hundreds of staff assigned to supervising Wells Fargo daily. It is indisputable that the San Francisco Fed failed for years to identify or stop Wells’ illegal and predatory actions creating millions of fake accounts, terminating thousands of employees including whistleblowers, and victimizing untold numbers of customers systemically for more than a decade. The San Francisco Fed either did not know this was happening under its nose or knew but did nothing to stop it. Either way, it was a gross dereliction of duty that should be punished not rewarded.
“That alone should be a disqualification for any promotion, but it is compounded by the fact that there has been no accountability for anyone at the San Francisco Fed or public disclosure of how such an egregious failure of supervision and regulation could happen or last for so long. To reward the President of the San Francisco Fed with a promotion to one of the most important positions in the entire Federal Reserve System confirms yet again that the Fed is dangerously out of touch and needs systemic reform to make it more accountable and transparent. That must start with a full, detailed public disclosure of all the facts and circumstances surrounding the years-long failures at the San Francisco Fed of its supervision of Wells Fargo, including specifically the role of its President. That searching examination must be followed by a full public airing of the secretive and flawed process at the New York Fed that resulted in the recommendation to reward such failure.”
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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies – including many in finance – to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.com.
