WASHINGTON — Joseph Otting, a former lieutenant of Treasury Secretary Steven Mnuchin’s at OneWest Bank FSB, has been tapped to lead a U.S. regulator that oversees more than 1,000 lenders — including Wall Street giants.
President Donald Trump plans to nominate Otting to run the Office of the Comptroller of the Currency, the White House said in a statement Monday evening.
If confirmed by the Senate, he will play a central role in trying to ease financial rules that the administration blames for stunting economic growth. The appointment would mark a reversal in roles for Otting, as the OCC regulated OneWest when he was the bank’s chief executive officer.
The selection continues Trump’s predilection for filling government jobs with former finance executives, even though he routinely criticized the industry on the campaign trail. Otting’s confirmation would give Mnuchin a key ally in changing the regulatory tone in Washington by dialing back aggressive scrutiny of banks.
OneWest, based in Pasadena, Calif., was the reincarnation of failed mortgage lender IndyMac Bancorp. Mnuchin and a group of investors that included hedge fund titans George Soros and John Paulson bought the company in 2009 through a government auction.
OneWest named Otting CEO in October 2010, with then-chairman Mnuchin praising his knowledge of the Southern California market. After CIT Group Inc. acquired OneWest in 2014, Otting served as co-president for a few months before being replaced.
Otting will probably face a similar hammering from senate Democrats over OneWest’s business practices to what Mnuchin endured during his conformation process. The bank, created after IndyMac’s collapse during the 2008 financial crisis, seized properties from tens of thousands of homeowners, foreclosures that some Democrats have called unfair and improper. As CEO, Otting arguably had more involvement in the company’s day-to-day operations than Mnuchin did as chairman.
In 2011, OneWest was involved in an enforcement action in which the government ordered mortgage services to review whether their foreclosure practices were appropriate. It took four years — most of Otting’s tenure — for the company to satisfy the concerns of the OCC and other banking regulators.
If he takes over the OCC, Otting will run an independent agency within the Treasury Department that supervises the banking units of major financial firms, including JPMorgan Chase & Co., Citigroup Inc. and Bank of America Corp.
Otting would be the first comptroller in decades without an advanced degree, with the agency’s most recent heads all holding law degrees.
His biographical information often lists him as a graduate of the “School of Credit and Financial Management at Dartmouth College,” which is a continuing-education program for financial executives that operated on the campus of the New Hampshire university, but isn’t actually affiliated with the Ivy League school. Records from the school, which is currently run for two weeks each year by the National Association of Credit Management, confirm he graduated in 1992 when he was a mid-level manager at Union Bank in Beverly Hills, California.
