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Community banker for Fed board?

By Allison Ross · Bankrate.com
Thursday, May 8, 2014
Posted: 5 pm ET

Federal Reserve Chair Janet Yellen says she favors adding a community banker to the Fed board. Photo courtesy of the Federal Reserve Board.

Federal Reserve Chair Janet Yellen says she favors adding a community banker to the Fed board. Photo courtesy of the Federal Reserve Board

Federal Reserve Chair Janet Yellen has told the White House that she's in favor of adding a community banker to the Fed board, she told a Senate committee Thursday.

Yellen was responding to questions from the Senate Budget Committee when Sen. Angus King, I-Maine, broached the idea of having a community banker on the board.

"I'm in favor of that," she responded. She noted that recently retired governors Elizabeth Duke and Sarah Bloom Raskin were "very familiar with community banking."

The Fed board is currently in flux, with three of President Barack Obama's nominees for the board (one of whom, Jerome Powell, is being nominated to a new term) still awaiting full confirmation. In addition, there is another open seat, and another seat will open when Fed Governor Jeremy Stein leaves later this month.

Yellen has sought in recent weeks to assuage concerns of community bankers by saying the central bank will try not to over-regulate these smaller banks.

"Community banks were not the source of the financial crisis. My colleagues and I do not want to see them caught up in unnecessary regulatory burden," she said during testimony. She expressed a desire to differentiate between regulations for big banks and smaller ones, saying that some of the regulations being put in place to address the systemic risks of the big banks may not apply to smaller institutions.

"I pledge I will continue to work with my colleagues to do all that we can to reduce the regulatory burdens on banks," she said.

If you're eager to read on about all things Fed, check out Bankrate's Federal Reserve landing page.

What do you think of the makeup of the Fed board right now?

Follow me on twitter: @allisonsross.

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