I just got a press release from the Office of the Comptroller of the Currency that its general counsel Julie Williams, an institution at the regulator for 19 years, is retiring. This is potentially a very big deal, because the OCC just underwent a leadership change from bank friendly John Walsh to a more measured Tom Curry, and the question was whether Curry would consolidate his leadership and move the regulator in a different direction. It looks like that’s what could be happening. Here’s what I wrote, back in May.
Williams is the Chief Counsel for the Office of the Comptroller of the Currency, and that’s her testifying in December, 2011 to the Senate Banking Committee on the OCC’s approach to foreclosures. Her most recent feat of evil is the foreclosure review process (which one whistleblower has called a sham), where she hired consultants to review foreclosures who had previously been credit risk managers on the predatory loans that are now in foreclosure. Some of these firms even “scrub files” on behalf of the banks themselves. Of course, the corrupt shadow regulator the Promontory Group is in the mix, since Promontory has loads of former OCC-employees on its payroll (and was in fact founded by former OCC Chief Gene Ludwig).
According to Senator Jeff Merkley, the OCC tried to keep these consultants secret and then failed after public pressure forced them to divulge the consultants involved in the reviews. Williams, of course, probably lied about it to the Senate. In other words, Julie Williams is basically the Lex Luther of the bank regulatory community, overseeing the preemption of state and local lending laws that allowed the housing bubble to blow out, and now running and defending the “foreclosure review” process that the OCC is using to cover up servicer fraud from the banks. The OCC, remember, is responsible for the safety and soundness of national banks, which means that the failure of most (though not all) of the big ones, including Countrywide (until late 2006), Bank of America, and Citigroup, can be laid at the feet of the OCC.
The OCC has a new head, Thomas Curry, who was just confirmed by the Senate. I’m told that he’s a respectable regulator with integrity, but that he’s a bit cautious. I suspect that if he’s going to succeed in reigning in a bank regulator that is renowned for a track record of catastrophic failure, Williams will have to either be fired or marginalized.
In order to regulate banks like JP Morgan effectively, you need regulators who are willing to do so. As long as Julie Williams is with the OCC, we can be sure that she’ll do everything in her power to make sure the will won’t be there for a serious approach to dealing with the problems in our banking system.
I don’t have an inside source at the OCC telling me if this is some grand shift in strategy for the regulator that is probably more at fault for the financial crisis than any other (with the possible exception of the Federal Reserve), and certainly for horrific policies like preemption of state and local consumer protection laws. Maybe Williams just wants to or hast to retire for some reason, and the OCC will continue on its merry way. But I’ll take it.