It’s been a good couple weeks for executive agency retirements. First we witnessed the end of the reign of Cass Sunstein from OIRA, which centralized regulatory power inside the White House rather than at the agency level, and who liked to distribute industry talking points and gut regulations in service to those industries.

Believe it or not, we may have gotten a better retirement yesterday. Julie Williams, the longtime friend to the banks at the Office of the Comptroller of the Currency (which I call the Office of Bank Advocacy), is retiring after 19 years. Williams, the chief counsel at OCC, led the way on pre-empting state consumer protection laws during the housing bubble, and oversaw the implementation of the sham foreclosure review process, which has been extended once again due to low takeup (homeowners victimized by foreclosures are simply not stupid enough to think that OCC will help them, and haven’t been submitting their cases for review).

This could be the sign of a shift at OCC, as the leadership has just changed, from Bush-era bank pal John Walsh to Thomas Curry. If Williams was in fact forced out, you could actually see a new era of leadership there.

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.

Unfortunately we have to play Kremlinology on executive agency changes like this. But it could be fairly significant. OCC recently participated in the CFPB’s enforcement action against Capital One, which got customers a full refund on add-on credit card fees, and additional fines on the bank. So that’s a good sign as well.

It’s too early to tell, but a new era at OCC would certainly be welcome.

David Dayen

David Dayen