Fed’s Michael Barr Announces Leave Ahead of Trump’s Arrival

the The Federal Reserve top banking regulator plans to resign in late February.

Michael Barr, the central bank’s vice chair for governance, is to leave on February 28, the Fed said in a statement. news release Monday (Jan. 6).

The announcement of Barr’s departure comes two weeks before President-elect Donald Trump is scheduled to take office. While the announcement did not mention the new president by name — or speculation that Trump would try to remove Barr — it noted that “the risk of a dispute over the position could be a distraction from our mission.”

Barr, who has been in his position since 2022, announced his plans to resign in a letter to President Joe Biden, saying it was an honor “to work with colleagues to help maintain the stability and strength of the US financial system so that it meets the needs of American families and businesses.”

The Fed said it does not plan to take “any major orders” until Barr’s successor is confirmed. The announcement said Barr’s role includes working with other financial regulators to ensure that “the banking system remains a source of strength, despite the stresses in early 2023.”

Barr and other financial regulators told the House Financial Services Committee last year that they would stop issuing new banking rules until Trump takes office. Those regulators have been sharply criticized by the committee’s Republican leadership.

“We are clear bank regulatorsunder the leadership of the Democrat, is busy fighting the last war,” said former committee chair Rep. Patrick McHenry, RN.C., during a hearing in November. “Always, your agencies are also working to prevent the beneficial role that innovation and technology play in our financial system.”

Trump campaigned on the idea of ​​starting the “most aggressive deregulation” in US history, with supporters of the incoming president lobbying for agencies such as Consumer Financial Protection Bureau (CFPB) and the Federal Deposit Insurance Corporation (FDIC) be anywhere eliminated or scaled back.

As PYMNTS wrote last month, such moves would mark a major shift, especially after a year marked by “a constant drumbeat of regulations and rules” that dealt with everything from late credit card charges until data sharing.

“In the meantime, however, the underlying issues is still there, and the key to it is to assess the risks and rewards involved bank-FinTech partnershipcybersecurity, capital requirements and innovation,” said the report.