* Dugan appointed by Republican President George W. Bush
* Departure comes at end of five-year term
* Successor unclear
WASHINGTON, July 8 Comptroller of the Currency
John Dugan, the regulator who oversees the nation's largest
banks, said he would leave office on Aug. 14, near the end of
Dugan helped steer major policy decisions during the
2007-2009 financial crisis, when the government structured a
$700 billion fund to bail out the banks.
He was not as outspoken as his counterpart, Federal Deposit
Insurance Corp Chairman Sheila Bair, yet played a critical role
in trying to right the housing market, shoring up the capital
of the fragile banking system, and then developing a way to
exit from the extreme government assistance.
Dugan, who like Bair was appointed by Republican President
George W. Bush, at times was at odds with Bair over policy
decisions, particularly ones he viewed as punitive to larger
The Office of the Comptroller of the Currency supervises
the largest U.S. banks, including JPMorgan Chase (JPM.N) and
Bank of America (BAC.N). FDIC insures accounts at all sizes of
banks but is direct supervisor for smaller institutions.
Dugan said in his letter of resignation to President Barack
Obama on Thursday that credit trends are continuing to improve
and it appears likely that taxpayers will earn a substantial
profit from their support to banks.
"In short, while the financial system continues to face
significant challenges, national banks have stabilized,
confidence has improved markedly, and institutions are now in a
much stronger position to help fund economic recovery," he
It is unclear who Obama will appoint to succeed Dugan.
The successor will lead the OCC as it faces major changes
laid out in the financial reform bill that Congress is expected
to pass in the coming weeks.
Under the legislation, the agency would absorb the Office
of Thrift Supervision, a smaller regulator that largely
oversees mortgage lenders. The reputation of the OTS, which
supervised troubled insurer American International Group
(AIG.N) and a slew of failed subprime lenders, was
significantly damaged during the financial crisis.
The next comptroller of the currency would also join the
newly-formed Financial Stability Oversight Council to monitor
risk in the financial system.
(Reporting by Karey Wutkowski; editing by John Wallace)