The Senate confirmed President Biden’s pick for a key Federal Reserve position on Wednesday with broad bipartisan support, giving the central bank a full board of seven governors for the first time since 2013.
The Senate approved Michael Barr to be a member of the Fed board and the Fed vice chair of supervision, with more than a dozen Republicans joining Democrats in support of the nomination.
Barr was confirmed to finish out the remainder of a term on the Fed board lasting through 2032 and a four-year term as the Fed’s point man on financial regulations in two separate votes Wednesday, each ending 66-28.
“Today’s confirmation of Michael Barr as Vice Chair for Supervision of the Federal Reserve is important progress for my plan to tackle inflation and for sound oversight as we transition to steady and stable growth,” Biden said in a statement.
Barr will join the Fed from the University of Michigan, where he served as a dean of public policy and a law professor. He was also an assistant Treasury secretary during the Obama administration and played a key role in crafting the Dodd-Frank Act, the 2010 financial reform law that created the position of Fed vice chair of supervision.
Biden was expected to nominate Barr in early 2021 to lead the Office of the Comptroller of the Currency, an independent bank regulator with less influence over the economy and broader financial system than the Fed. But progressive Democratic senators quashed Barr’s potential nomination over concerns about his role in the Obama administration’s housing crisis relief efforts.
Barr succeeds former Fed Vice Chair of Supervision Randal Quarles, who was nominated and confirmed to the position in 2017 under former President Trump. Quarles left the Fed in December after his term lapsed in October.
As vice chair of supervision, Barr will be responsible for overseeing the Fed’s regulation of major banks operating in the U.S., including the stress tests conducted under Dodd-Frank for banks deemed “too big to fail.” He will also play a critical role in the Fed’s approach to cryptocurrencies and stablecoins, which the central bank sees as both innovations as serious risks to financial stability.
Barr additionally will join the Federal Open Market Committee (FOMC), the panel of Fed officials responsible for setting interest rates and other monetary policy tools, through his role as a member of the Fed board of governors. The FOMC includes the Fed board, the president of the Federal Reserve Bank of New York, and a rotation of voting and non-voting presidents of other Fed regional reserve banks.
Barr is Biden’s third addition to the Fed’s board of governors following the Senate’s confirmation of Fed Governors Lisa Cook and Philip Jefferson in May.
The Senate also confirmed Fed Chairman Jerome Powell for another four-year term leading the Fed and Vice Chair Lael Brainard as the Fed’s No. 2 on Biden’s appointment earlier this year.
Barr was not Biden’s first pick for the position. The president initially nominated former Fed Governor and deputy Treasury Secretary Sarah Bloom Raskin to serve as vice chair of supervision, but she withdrew her nomination after a blockade led by Senate Republicans and opposition from Sen. Joe Manchin (D-W.V.)
“Professor Barr is well-qualified to serve as the Fed’s Vice Chair for Supervision based on his prior government service and distinguished career focused on financial services and regulation. While I disagree with Professor Barr on a number of policy issues, he has pledged to fight the record high inflation that’s hurting American families,” said Sen. Pat Toomey (R-Pa.), ranking Republican on the Senate Banking Committee, in a Wednesday statement.