Senate panel advances UM's Barr to be nation's top banking regulator

Melissa Nann Burke
The Detroit News

Washington — With bipartisan support, the Senate Banking Committee on Wednesday advanced the nomination of the University of Michigan's Michael Barr to serve as the nation's top banking regulator.

The 17-7 vote included three Republican senators in support: Sens. Pat Toomey of Pennsylvania, Cynthia Lummis of Wyoming and Jerry Moran of Kansas. Barr's nomination now goes to the full Senate for consideration. 

Dean of Public Policy Michael Barr smiles during a conversation on foreign policy at Rackham Auditorium.

Barr previously held a posts in the Treasury Department under Presidents Barack Obama and Bill Clinton, and is now dean of UM's Gerald R. Ford School of Public Policy.

If confirmed by the full U.S. Senate, Barr would join another Michigan academic on the Federal Reserve board — Michigan State University economist Lisa Cook, who was confirmed last month and is the first Black woman ever on the panel.

Barr's term on the Federal Reserve's Board of Governors would run through 2032, and his term as the Fed's vice chairman of supervision would run four years.

Barr would arrive at the Fed at a challenging time for the central bank as it reckons with historic levels of inflation near a 40-year high, with the 12-month rate down slightly to 8.3% in April from 8.5% in March. At his hearing last month, Barr said he'd work to reduce high inflation.

“I strongly believe that inflation is far too high today, and I’m committed to bringing it down to the Federal Reserve’s target of 2%," Barr told senators.

Ohio Sen. Sherrod Brown, the Democratic chairman of the banking panel, called Barr an "exceptional" nominee.

"We need to get him on the job immediately," Brown said.

Toomey also said Barr was well-qualified given his prior government service and "distinguished" career in financial services and regulation, adding that he has "strongly" committed to promote transparency and accountability.

"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, and he's also publicly acknowledged that the Fed does not have the authority to nor should it, to allocate credit or use its regulatory powers to accelerate the transition to a low carbon economy," Toomey said Wednesday.

Sen. Bob Menendez, a New Jersey Democrat, said he would vote for Barr because he committed to pursue a process that would create the opportunity for a Hispanic American to be considered for the board, which has never had a Hispanic member in its 108-year history.

"There's no guarantees that that person would be appointed but to create a process which the Federal Reserve itself should adopt as a whole in order to break this century-plus period of time in which no one no one from our community — despite a $2.3 trillion domestic marketplace — ultimately has a say in," Menendez said. 

Barr was an assistant Treasury secretary for financial institutions in 2009 and 2010 during the Obama administration and helped form the 2010 Dodd-Frank regulations in response to the 2008 financial crisis.

Barr also served on the National Economic Council in the Obama White House and previously worked in the Clinton administration as Treasury Secretary Robert E. Rubin's special assistant and as deputy assistant secretary of the Treasury, and as special adviser to Clinton and for the U.S. Department of State, according to his bio.

Barr was a Rhodes Scholar and a law clerk for former Justice David Souter on the U.S. Supreme Court after earning bachelor's and law degrees from Yale.

Biden’s first pick for the Fed post, Sarah Bloom Raskin, withdrew her nomination after continued opposition from Republicans and Democratic Sen. Joe Manchin of West Virginia. 

Barr would follow one of his predecessors as Ford School dean, Edward Gramlich, who served on the Fed's Board of Governors from 1997 to 2005.

The Associated Press and Detroit News Staff Writer Breana Noble contributed.