Federal Reserve Appointment of Wall Street Lawyer Draws Criticism from Better Markets

WASHINGTON, D.C.— Dennis Kelleher, President, CEO and Co-founder of Better Markets, has issued a strong statement criticizing the Federal Reserve Board’s appointment of Randall D. Guynn, a lifelong Wall Street lawyer-lobbyist, as the next Director of the Division of Supervision and Regulation. Kelleher argues the appointment undermines the Fed’s ability to effectively regulate large banks and protect the American public.

Concerns Over Potential Conflicts of Interest

Kelleher contends that Guynn’s decades-long career representing the financial industry creates an inherent conflict of interest. “This isn’t just putting the fox in charge of the henhouse; this is like appointing a lifelong arsonist as a fire chief,” he stated. He emphasized that Wall Street “cannot control itself” and requires independent regulation, a sentiment echoed by former Morgan Stanley CEO John Mack.

A Career Dedicated to the Financial Industry

Guynn’s professional life has been almost exclusively dedicated to representing the interests of the financial industry. Kelleher highlighted that for over 30 years, Guynn led the Financial Institutions Group at a top Wall Street law firm, coordinating efforts to influence policymakers and regulators in favor of the banking sector. This included representing numerous banks that opposed stricter regulations even after the 2008 financial crisis.

Shared Worldviews and Inevitable Bias

Kelleher expressed concern that Guynn’s long-standing representation of financial firms has inevitably shaped his worldview. He suggested that Guynn likely shares common beliefs within the industry, such as the idea that regulation is inherently harmful and that regulators lack expertise. He cited Upton Sinclair’s observation that it’s difficult to change someone’s understanding when their livelihood depends on maintaining a particular perspective.

Potential for Deregulation and Increased Risk

Better Markets fears that Guynn’s leadership will accelerate the Fed’s trend toward policies that favor large banks, potentially harming smaller institutions and increasing the risk of another financial crisis. Kelleher drew parallels to the early 2000s, when the Fed’s belief in self-regulation contributed to the 2008 crash.

Past Advocacy and Back-Door Approvals

Kelleher pointed to Guynn’s past advocacy work, including his role in securing a back-door merger approval for a financial institution while working as a lawyer-lobbyist. He argued that this history demonstrates a pattern of prioritizing the interests of his clients over the public good.

Better Markets’ Mission

Better Markets is a non-profit organization established after the 2008 financial crisis to advocate for a financial system that serves the public interest. The organization works to promote policies that protect Americans’ jobs, savings, and retirements. They collaborate with allies, including those within the financial industry, to build a stronger and safer financial system.