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Banks

Senate seen waiting for Obama until Fed nominee hearing called: sources

WASHINGTON (Reuters) - The Senate Banking Committee is expected to wait to hold a hearing for the nomination of a community banker to the Federal Reserve until the White House moves to fill the central bank’s other open seat, according to people familiar with the matter.

The facade of the U.S. Federal Reserve building is reflected on wet marble during the early morning hours in Washington, July 31, 2013. REUTERS/Jonathan Ernst

Waiting gives committee Chairman Richard Shelby more time and options to put his stamp on the central bank, as the Fed still has a seventh empty board seat to fill. Another vacancy at the Fed board is the vice chairman for Supervision, a position created by the 2010 financial reform law known as Dodd-Frank that the White House has yet to fill.

The White House in January named Allan Landon, former chief executive of the Bank of Hawaii, as a board nominee. At the time, Landon was viewed as a candidate who could win support from both Republicans and Democrats, given that the bulk of his career was spent as an executive at a small U.S. bank.

But the Senate Banking Committee has yet to call a hearing on his nomination and people familiar with the matter say Shelby, an Alabama Republican, does not plan to schedule one until the White House nominates a person to fill the Fed’s last open seat.

“If you think about it, why would you have just an Allan Landon hearing?” said a person familiar with the matter who did not want to be named. The person suggested that by waiting, Shelby can use the process more to his advantage, given the dynamics of a Republican-run committee and a Democratic president in the White House.

Shelby may be waiting to package several White House nominations together, including top jobs at the Federal Housing Administration, the Treasury Department and other agencies, Politico reported earlier on Thursday, citing lobbyists who follow the Banking Committee.

The Fed currently has five governors on its seven-member board. Landon was unavailable to comment.

The White House is conducting a comprehensive search for experienced and highly qualified individuals, spokeswoman Jennifer Friedman said in an emailed statement.

Shelby’s priority remains putting together a regulatory relief package, which the committee hopes to finalize in the next few months.

There will be no hearing for Landon until the White House “nominates someone to fill the other open seat on the Board of Governors,” according to another person familiar with the matter.

Editing by Bernadette Baum and Ted Botha

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