Taylor Expected to Keep Low Profile as Head of FDIC

A year ago, William Taylor was told he was getting a big and controversial job--the chairmanship of the Federal Deposit Insurance Corp. He would succeed the media-savvy L. William Seidman as Washington’s point man in the banking crisis.

But then a funny thing happened: The 70-year-old Seidman didn’t retire. And the Bush Administration--anxious to see Seidman leave but wary of publicly ousting an independent regulator popular with both Congress and the press--didn’t push him.

So until Tuesday, when President Bush announced Taylor’s nomination to succeed Seidman--who finally announced last week that he will retire in October--the 52-year-old Taylor had been left hanging in his old job as chief banking regulator at the Federal Reserve Board.

The wait was so long that Fed officials close to Taylor began to believe that Taylor was being used by the Bush Administration as a sacrificial lamb. Some Fed officials suspected that the Administration had floated his name early on in order to put subtle pressure on Seidman to leave and then conveniently forget about Taylor.

White House officials have denied such conspiracy theories, but when Seidman announced his decision to retire a week ago, President Bush said he planned to “start over and take a hard look” at potential candidates.

In the last days before Taylor’s appointment was announced Tuesday, there was speculation that Taylor’s role in the Fed’s investigation of the spreading scandal over the Bank of Credit & Commerce International might lead the Administration to pick someone new.

The Fed has come under increasing fire in recent weeks on Capitol Hill for its failure for years to uncover BCCI’s secret ownership of commercial banks in the United States. And as the Fed’s chief banking regulator, Taylor is an easy target of such criticism. Taylor, who could not be reached for comment Tuesday, has previously insisted that the Fed did not learn of BCCI’s secret holdings in American banks until this year.

Despite the BCCI scandal, those who know him say that Taylor, head of the Fed’s Division of Banking Supervision since 1985, is in fact an aggressive watchdog who has generally helped the Fed avoid many of the problems with lax financial regulation that has plagued other agencies.

But Taylor will almost certainly maintain a much lower profile than did Seidman. Unlike Seidman, Taylor probably will not be responsible for overseeing the savings and loan cleanup effort, and so will have one less political controversy to deal with. In addition to his role at the FDIC, Seidman was chairman of the Resolution Trust Corp., the agency in charge of the S&L; salvage effort. But the two jobs will likely be divided soon, and a search for a new chief executive for the RTC is under way.

If he does not have the RTC to worry about, Taylor will be free to concentrate on the mounting problems facing the commercial banking industry and the worsening state of the federal deposit insurance system. Seidman has warned that the banking crisis and the resulting wave of bank failures across the nation threaten to leave the federal deposit insurance fund insolvent by the end of this year. The Bush Administration is pushing a banking reform package in Congress designed to provide a $70-billion bailout of the deposit fund, which until now has been financed by insurance premiums paid by commercial banks.

A graduate of Cornell College in Iowa, Taylor began his career in 1961 as a bank examiner at the Federal Reserve Bank of Chicago. He has been in and out of the central bank ever since, with jobs in the private sector, in both the banking and real estate industries, in between stints at the Fed.

Taylor isn’t likely to seek the media spotlight as he addresses the banking crisis. Seidman’s easy access to Congress and the media, along with his plain and forthright speaking style, won over critics. But Taylor, those who know him say, is much more reserved and less given to hogging the spotlight. In fact, he may hope to turn the FDIC back into the dull and obscure agency that it was before the banking crisis--and Bill Seidman--hit Washington.

Bio: William Taylor

President Bush on Tuesday nominated Taylor to a 16-month term as chairman of the five-member FDIC board.

Age: 52

Education: Received bachelor’s degree from Cornell College in 1961.

Resume: Began his career in 1961 at the Federal Reserve Bank of Chicago, where he served as a bank examiner until 1968. From 1968 to 1972, he was vice president of the Upper Avenue Bank in Chicago. For next four years he served as manager of the Chicago office of the James W. Rouse & Co. real estate development firm. Rejoined the Fed in 1976, and the next year was appointed associate director. Since 1985, Taylor has been director of the Division of Banking Supervision and Regulation. President Bush on Tuesday nominated Taylor to a 16-month term as chairman of the FDIC board.

Business philosophy: He is highly regarded in Washington and has a close working relationship with the Treasury Department. Has been a strong proponent of high capital standards for banks and supports allowing banks to underwrite securities.

Quote: “I’m very honored and it’s a delight,” Taylor said of the nomination, declining further comment until his confirmation hearings.