No One Wants to Be General Counsel of the Federal Reserve

It’s been nearly two months since the Federal Reserve said its long-running general counsel Scott Alvarez will retire this year and no replacement has been named.

The process of naming a new general counsel is complicated by widespread expectations that current Federal Reserve chair Janet Yellen will not be reappointed by President Donald Trump after her term expires in 2018, according to people familiar with the situation.

“No one wants to take the job of being ‘Janet Yellen’s lawyer’ only to be shown the door when Trump appoints a Trump-y chair,” said a Federal Reserve official who spoke on the condition of anonymity.

Alvarez’s retirement will bring an end to his 36-year career at the central bank. He has been general counsel for the last 12 years, guiding the Fed through the financial crisis and the implementation of the regulations stemming from the Dodd-Frank financial reform law.

Although Alvarez’s tenure as general counsel spanned three different Fed chairs, it is widely expected inside the central bank that the next Fed chair could seek to reshuffle the senior staff as part of an effort to shift policy away from the post-crisis regulatory stance of Yellen and her predecessor Ben Bernanke.

“If you look at the administration’s executive orders on financial regulation, it’s clear that they intend to go in a new direction–and that will likely mean a lot of changes in places like the legal division,” according to a person familiar with the matter. As a result, the person said, the next general counsel may wind up serving a very short term.

“A lot of people want the job–just not yet. The top people are gunning to be the replacement for Alvarev’s replacement,” another person at the central bank said.

Big changes are afoot at the Fed. In addition to the coming retirement of Alvarez, Fed governor Dan Tarullo has announced he will retire as soon as next month. Tarullo has served as the de facto head of financial regulation at the Fed despite never being formally appointed as the Vice Chair for Supervision, a new position created by the Dodd Frank Act but never filled by the Obama administration. The Trump administration has not yet named a Vice Chair for Supervision or a successor for Tarullo.