If the Dodd-Frank Act is a bust, the single biggest reason will be lack of manpower.
Implementing a 2,300-page law is an enormous responsibility and yet no less than a dozen essential jobs are either unfilled or being done by someone with "acting" before their title.
There are rumors the Obama administration is working on a "package" and will present a slate of nominees for financial services jobs soon. Let's hope so. But what's taking so long? And why wait for a grand gesture? The administration should nominate anyone, selected and vetted, who has agreed to serve.
Perhaps the most bungled appointment involves the new Consumer Financial Protection Bureau. By now it's a well-told tale, but still so telling of everything that's wrong with this administration's nominating process.
The administration supported the agency's creation as key to reforming the consumer finance business, and yet when Dodd-Frank passed in July 2010, the president was not ready to name a leader. Instead of taking some political heat and nominating Elizabeth Warren as the agency's first director, last September Obama gave her two other titles and put her in charge. All of the responsibility and some of the authority, or something like that.
Now, with just a few months before the bureau needs a Senate-confirmed leader so it can actually start writing rules, the administration still has no one to nominate.
There is even talk that the administration is considering moving one of the few people it has put in a financial regulatory job — Sarah Bloom Raskin, a new governor of the Federal Reserve Board — to the consumer bureau as its first director.
With so many openings, filling one job by moving someone from another doesn't make a lot of sense. And the administration is arguably in a tighter spot than it was last year when it chickened out and didn't appoint Warren. Her fans are more convinced than ever that she is the best choice, and her foes are just as sure she will be an overbearing disaster. (Personally I think she deserves the job. Warren has worked hard to get the agency off the ground and gone out of her way to assure bankers she has no intention of crushing them with needless regulation.)
Speaking of the Fed, wasn't the easiest appointment stemming from Dodd-Frank the new vice chairman post for supervision? Everyone assumed the job would go to Fed Governor Dan Tarullo, the former Georgetown law professor appointed by Obama in 2009. But it's been nine months since he signed Dodd-Frank and Obama hasn't nominated Tarullo. Most people figure he won't. He should.
As chair of the Fed's bank supervision committee, Tarullo is best positioned to do the work, and while his style rubs some the wrong way there is no denying he has become well versed and thought-provoking on banking policy.
To be fair, the nominations mess isn't all Obama's fault. Sen. Richard Shelby, the ranking Republican on the Senate Banking Committee, has blocked two great nominations.
Peter Diamond won a Nobel prize for economics last October just after Shelby declared him unqualified to serve on the Fed. Obama has renominated Diamond and even if he does get confirmed the seven-member Fed will still be short one member.
The other thwarted nomination was Joe Smith's to lead the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac as well as the Home Loan banks. In a year when housing finance reform is front and center, it would make sense to have a true leader at the FHFA. Smith did get past Senate Banking in December, but Shelby objected and the full Senate did not vote on the nomination before adjourning last year. Smith opted to skip Act 2 of the nomination circus and went back to running North Carolina's banking department. The FHFA job has been filled since August 2009 by an acting director, Ed DeMarco.
The post of comptroller of the currency has been filled on an acting basis since last August by John Walsh. If in eight months Obama couldn't find a comptroller he likes, he ought to simply give Walsh the job on a permanent basis.
Walsh had been the agency's chief of staff and before that the executive director of the Group of 30. He's well respected and has handled the "acting comptroller" job quite well.
The Office of the Comptroller of the Currency needs a real leader as it goes through the sensitive work of taking over the Office of Thrift Supervision.
The OCC and OTS are part of the Treasury Department, and it too is missing some key people. It has an acting undersecretary for domestic finance in Jeffrey Goldstein, who got a recess appointment over a year ago. The assistant secretary for financial institutions job has been vacant since Michael Barr left in January.
Dodd-Frank handed Treasury Secretary Tim Geithner vast responsibilities as chairman of the new Financial Stability Oversight Council. The council has 15 members and the president still must nominate someone to represent the insurance industry. The reform law also created the Office of Financial Research to help spot the next crisis, and mandated its leader be appointed to serve a six-year term. A director has yet to be nominated.
Obama must replace two other officials who left recently: David Stevens as federal housing administrator and Neil Barofsky as the special inspector general for Tarp.
But perhaps the most important job Obama needs to fill isn't even open yet — chairman of the Federal Deposit Insurance Corp.
Sheila Bair is leaving when her term expires this summer and it's likely vice chairman Marty Gruenberg will take over in an acting capacity.
The FDIC is implementing vital pieces of Dodd-Frank. Some of its work will be done jointly with the Fed, including the living-will rules that will govern how large companies are unwound in a failure.
In Dodd-Frank, Congress debated consolidating regulatory power into one agency, and decided against it.
But if Obama does not put strong leaders at the Comptroller's Office and the FDIC, then there may very well be a de facto consolidation, with the Fed calling the shots.
President Obama needs to focus on financial services, find the right people to fill these jobs and get the nominations to Capitol Hill. Sen. Shelby needs to stand aside and let the president assemble his team.
Barb Rehm is American Banker's editor at large. She welcomes feedback to her weekly column at
