H.R. 4753 establishes procedures to ensure that the Federal Reserve fulfills its obligations mandated by Section 1108 of the Dodd-Frank Act, which established the position of Vice Chairman for Supervision at the Board of Governors.
Under Section 1108, the Vice Chairman for Supervision “shall develop policy recommendations for the Board regarding supervision and regulation of depository institution holding companies and other financial firms supervised by the Board, and shall oversee the supervision and regulation of such firms.”
Section 1108 further states that “The Vice Chairman for Supervision shall appear before the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives and at semi-annual hearings regarding the efforts, activities, objectives, and plans of the Board with respect to the conduct of supervision and regulation of depository institution holding companies and other financial firms supervised by the Board.’’ The provision, however, is silent in the event of a vacancy of the Vice Chairman for Supervision.
The previous Administration failed to appoint a Vice Chairman for Supervision. Former Governor Daniel Tarullo served as the de facto Vice Chairman for Supervision, but did so without oversight and without checks and balances.
H.R. 4753 corrects this statutory oversight by requiring that, if the Vice Chairman for Supervision position is vacant, then the Federal Reserve Board Chair or the Chair’s designee must fulfill the statutory requirement for semi-annual testimony.