Californian Nominated for Bank Post

James E. Gilleran, California’s superintendent of banks, was nominated Thursday by President Bush to serve as comptroller of the currency, chief regulator of the 3,900 federally chartered banks.

If confirmed, he would succeed Robert Clarke, who resigned earlier this year after the Senate Finance Committee rejected him for a second five-year term. Clarke’s nomination was turned aside on a straight party-line vote, with Democrats charging that he had not been tough enough in overseeing banks in shaky financial condition.

Gilleran also is likely to be subjected to intense scrutiny by the committee’s Democratic majority, which is suspicious of the Bush Administration’s claims that the worst of the crisis is over in the banking and thrift industries.

The Democrats may decide to withhold action on the nomination until after the fall presidential election, hoping that the Democratic candidate will win and enable the party to pick one of its own to supervise the banks.

The comptroller oversees the nation’s biggest banks, many of which are burdened with huge portfolios of troubled real estate loans.

Gilleran, 59, has been the state’s bank superintendent since 1989. He is a certified public accountant and has been a partner in charge of the banking industry group at Peat Marwick, a major accounting firm. He also was managing partner with Peat Marwick in San Francisco, and served from 1987 to 1989 as president of the Commonwealth Group, an investment banking firm.

Gilleran has a good reputation in banking circles. He has handled the disposition of nine insolvent banks in California, including the shutdown in January of Independence Bank in Encino. It was secretly controlled by the Bank of Credit & Commerce International, a secretive foreign institution convicted of money laundering and involvement in a massive banking fraud. Gilleran ordered the shutdown of the Encino bank after an audit disclosed widespread problems with commercial real estate loans.