Fed's Daniel Tarullo, who has guided regulation of banks, will resign

Federal Reserve board member Daniel Tarullo, a key official guiding bank regulation efforts, will resign this spring, the Fed said Friday. 

Tarullo’s decision will clear the way for President Trump to select someone for the bank supervision position. Trump is likely to choose someone more in line with his desires to roll back the regulations put in place by the Dodd-Frank Act, which overhauled bank supervision in the wake of the 2008 financial crisis.

Read more: Here's what's at stake as Trump moves to unravel Dodd-Frank »

Tarullo said in a short resignation letter to Trump that he planned to resign “on or around April 5, 2017.”

There already are two vacancies on the Fed board because Congress refused to confirm two of former President Obama’s nominees. Tarullo’s departure will mean that Trump will have the chance to fill three Fed vacancies in his first months in office. 

Read more: Trump hammered the Federal Reserve as a candidate. As president, he could quickly reshape it »

The Dodd-Frank Act created a position of vice chairman for bank supervision. But the Obama administration never filled the post, reflecting in part the sharp disagreements between Democrats and Republicans in Congress over how the financial system should be regulated. Instead, Tarullo has in effect served as the Fed’s point person on bank regulation since 2009.

Last week, Trump launched his long-promised attack on the Dodd-Frank Act, ordering an administration review of the financial oversight law after meeting with business executives at the White House, and pledging further action to free banks from restrictions.

Trump had been expected to fill the vice chairman for supervision position, which probably would have complicated Tarullo’s role. Tarullo’s term as a Fed board member does not expire until Jan. 31, 2022.

“Dan led the Fed’s work to craft a new framework for ensuring the safety and soundness of our financial system following the financial crisis and made invaluable contributions across the entire range of the Fed’s responsibilities,” Fed Chair Janet Yellen said in a statement.

Trump also was highly critical of Yellen during the presidential campaign, accusing her of keeping interest rates low to benefit Democrats. It is expected he will appoint someone else as chairman of the Fed when Yellen’s four-year term ends in February 2018. Yellen has said she has no intention of leaving before her term ends.

Tarullo, 64, had been a law professor at Georgetown University Law Center before joining the Fed board in 2009. 

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UPDATES:

Noon: This article was updated with a comment from Fed Chair Janet Yellen and background information. 

This article was originally published at 11:05 a.m.

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