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Barr to Step Down As Fed Vice Chair for Supervision

January 7, 2025

The Federal Reserve announced on Jan. 6 that Michael Barr will step down from his position as Federal Reserve Board Vice Chair for Supervision, effective Feb. 28, 2025, or earlier if a successor is confirmed.

• Appointed by Biden in 2022, Barr was expected to serve as Vice Chair until July 2026.
• Of note and according to the Fed’s statement, Barr will continue to serve as a member of the Board of Governors (his term ends early 2032).

Why it matters: As one of the nation’s most influential financial regulators, including a key architect of the very controversial bank capital proposal, Barr has long been in the GOP’s crosshairs.

• Trump and Senate Republicans have been investigating ways in which to demote Barr, which would be unprecedented and not without major legal hurdles.
• In the Fed’s release, Barr stated:

“The risk of a dispute over the position could be a distraction from our mission. In the current environment, I've determined that I would be more effective in serving the American people from my role as governor."

What does this mean: Without Barr driving the Fed’s regulatory agenda, the future of key rulemaking, including proposed bank capital, liquidity, and long-term debt requirements, has become increasingly uncertain.

What they’re saying: Despite opposition to Barr’s policy activities over the past few years, Fed Chair Jay Powell’s post seems secure.

• According to the Washington Post, Treausry Secretary nominee Scott Bessent “emphasized his belief that Fed Chair Jerome H. Powell should serve out his full term.”

What’s next: Potential Fed Vice Chair replacements could include current Fed governors Michelle Bowman and Christopher Waller, both of whom were appointed during Trump’s first term.

CREFC will closely cover this important transition given its significant implications for regulatory policy.

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