WASHINGTON/HONG KONG (Reuters) - A member of the U.S. Commodity Futures Trading Commission will become the new head of a bank lobby group that is fighting the derivatives regulator in court over a crucial new rule curtailing Wall Street.
The International Swaps and Derivatives Association said on Wednesday that Scott O‘Malia, a Republican who often voted against new CFTC policy in the wake of the financial crisis, will become the trade group’s next chief executive.
O‘Malia will start his new job as of Aug. 18, ISDA said. The news came only days after O‘Malia said he planned to leave the CFTC as of Aug. 8.
ISDA is one of three banking groups that sued the CFTC in December, hoping to beat back tough trading guidelines for U.S. companies doing business overseas, which they fear could hurt markets and cut profits.
The two sides are set to face each other in a first hearing in a federal court in Washington next week.
The speed of O‘Malia’s move, and ISDA’s high profile, made the appointment striking even by Washington standards, where a ‘revolving door’ between regulators and those they oversee makes moves from one side to the other common.
“This is why Americans are so disgusted with so many high government officials and believe that Washington is in cahoots with Wall Street,” said Dennis Kelleher, who heads Better Markets, a group urging tighter regulation of big banks.
O‘Malia spent more than four years as a member of the CFTC, and was an outspoken critic of the rule-making process mandated by the 2010 Dodd-Frank financial reform law, which he said had been rushed, confused and lacked transparency.
A staffer for Republican Senator Mitch McConnell - now the Senate Minority leader - from 1992 to 2001, O‘Malia focused on energy policy during much of his career.
At the CFTC, he chaired the Technology Advisory Committee, which drives the agency’s efforts to better cope with the vast amount of data it has to handle.
ISDA is a global lobby group for non-listed derivatives, counting the world’s largest investment banks among its members, and has frequently fought regulatory efforts to reform the market after the financial crisis.
Reporting by Michelle Price; Editing by Miral Fahmy and Paul Simao