WASHINGTON (Reuters) - President Barack Obama on Tuesday nominated former community banker Allan Landon to a seat on the U.S. Federal Reserve’s board, responding to calls for a greater voice for Main Street in the central bank’s deliberations.
Landon, a partner at private investment fund Community BanCapital, was chief executive of the Bank of Hawaii (BOH.N) from 2004 until 2010. Previously, he had worked as the bank’s chief financial officer and as CFO at First American in Tennessee.
Several lawmakers on Capitol Hill had urged the White House to name someone with community banking experience to one of the two open seats on the central bank’s board, concerned that Wall Street holds too much sway.
“Those of us fighting against bailouts and the too-big-to-fail megabanks’ special subsidies often get our voices drowned out by Wall Street,” said Senator David Vitter, a Louisiana Republican, adding that he intended to meet with Landon.
Independent Community Bankers of America President Camden Fine said Landon would bring a critical small-bank perspective to the Fed.
If confirmed by the U.S. Senate, Landon, 66, would join a central bank facing pressure from Capitol Hill on a number of fronts, and the addition of a community banker to the board could defuse one main complaint.
He would have a regular vote on monetary policy, although his influence on the policy-setting Federal Open Market Committee could be limited given the group includes some of the nation’s top economists.
Fed governors with community banking backgrounds typically focus more on bank supervision and regulation.
“It’s the collective wisdom of the board and FOMC that’s important, and the addition of any one person is not going to change that,” said Roberto Perli, partner at economic research firm Cornerstone Macro and a former senior staffer at the Fed.
The nomination comes as the Fed prepares for its first interest rate increase since 2006, which is expected around mid-year.
Landon has ties to Washington and Obama’s family.
The president’s grandmother Madelyn Dunham was one of the first female vice presidents at the Bank of Hawaii. At a community service after her death in late 2008, Landon read aloud a letter from the newly elected president.
He also serves on the boards of the Smithsonian Institution and the Corporation for Public Broadcasting.
Bob Jones, chief executive at Evansville, Indiana-based Old National Bancorp, who knows Landon personally, said he would bring a fresh perspective to a central bank dominated by officials with academic or government backgrounds. Landon is a certified public accountant.
Community banks want relief from aspects of the 2010 Dodd-Frank financial oversight law, which the Fed and other regulators are implementing. Fed officials have said certain rules could be adjusted to lessen the burden on smaller banks.
Community BanCapital, based in Portland, Oregon, invests in the debt of community banks. According to the fund’s website, Landon was responsible for “sourcing, evaluating and monitoring investments.”
During Landon's years at the Bank of Hawaii, from 1999 to 2010, the company's stock rose 152.6 percent, while over the same period the S&P 500 .SPX was down 14.4 percent.
Before entering banking, Landon worked at accounting firm Ernst & Young.
Reporting by Emily Stephenson and Howard Schneider in Washington, and Jonathan Spicer in New York; Editing by Chris Reese, Alan Crosby and Steve Orlofsky