On Thursday, after now-former Ways and Means Chairman Charles Rangel (D-NY) indicated he would step aside temporarily, Rep. Pete Stark (D-CA), who was next in line behind Rangel, indicated that he would not pursue the Chairmanship. House Democrats installed Rep. Sander Levin (D-MI) as acting chairman of the powerful tax writing panel for the remainder of the year, or until Rangel is sufficiently cleared by the Ethics Committee. If Democrats retain their majority in the House, however, the Chairmanship of the Committee would reopen and sources indicate Massachusetts Rep. Richard Neal, Washington Rep. Jim McDermott, and Georgia Rep. John Lewis may challenge Levin for the top spot.
On Thursday, Citigroup CEO Vikram Pandit testified before the Congressional Oversight Panel discussing the bank’s $45 billion federal bailout. During his testimony Pandit expressed support for several initiatives in the financial services regulatory reform bills currently making their way through Congress including the creation of a systemic risk regulator, resolution authority, and a consumer protection agency. Pandit said Citi has reduced its leverage from a ratio of 18 to 1 to 12 to 1 and has trimmed its balance sheet by $500 billion.
On Wednesday, House Financial Services Chairman Barney Frank called the latest reports of the Dodd-Corker proposal to create a consumer watchdog within the Federal Reserve ” a bad joke,” and indicated he would not support such a bill if it came back to the House. Frank went on to criticize Republicans for being critical of the Federal Reserve while simultaneously advocating that the new consumer protection division be placed within the same agency.
On Tuesday, Don Kohn announced he will step down as vice-chairman and member of the Federal Reserve board in June, giving President Obama the opportunity to fill three vacancies on the seven-member Federal Reserve board of governors. Speculation is that Dan Tarullo, a Fed governor and the only Obama appointee currently on the board, will be elevated to Kohl’s vice-chairman slot. The three appointments will shape the Fed’s make-up and influence the Fed’s work on major issues in the near future including interest rates, consumer-protection rules, and new regulations affecting the nation’s largest financial institutions. Sources indicate that current White House Economic Advisors including Christina Romer, Janet Yellen, and Austan Goolsbee are among the potential candidates.