White House to announce nominee for Fed board, source says

The White House will soon announce a nominee to the Federal Reserve Board, a person familiar with the matter said on Friday, in a move that would begin the process of filling one of the Fed's two empty seats in Washington.

The person said the White House will announce a nominee next week or the following week, adding that the nominee will likely have a community banking background.

The move comes as the new U.S. Congress convenes next week, with Republicans in control of both chambers after wresting the Senate from Democrats in November. The Fed is expected to come under heavier political pressure this year, from both Republicans and Democrats, as it pulls back from its unprecedented economic stimulus and begins raising interest rates.

The U.S. central bank has five Fed governors in place on the seven-member board. Board members are appointed by the president, subject to Senate confirmation.

Not one of the five governors has experience in the community banking industry, which has led to speculation that the White House would name someone from the sector as a nominee.

Reuters reported in April that Diana Preston, a lawyer who left a post at the American Bankers Association; Rebeca Romero Rainey, who runs a small bank in New Mexico; and Ann Marie Mehlum, who headed an Oregon-based bank before joining a federal small-business agency, were among the Fed board candidates the White House was considering.

Former Treasury official Michael Barr's name also surfaced as a possible Fed board candidate.

But the White House did not move on any of those names and attention on the two empty Fed seats faded in the second half of last year. It resurfaced as Congress was wrapping up in December.

A decision by the U.S. Senate last month to set aside a terrorism insurance bill until 2015 killed a provision requiring that one seat on the Fed board be dedicated to a person with community banking experience. But the provision is likely to come up again because it has strong support in both the House of Representatives and the Senate.

Many U.S. lawmakers worry that big Wall Street firms hold undue sway at the U.S. central bank and see adding a community banker as a way to temper that.

A Federal Reserve spokeswoman declined to comment on the matter. A White House official who did not want to be named said the president did not have any immediate personnel announcements to make. 

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White House, Federal Reserve Board, Washington, U.S. Congress, American Bankers Association

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