POSITION: Department of the Treasury's Assistant Secretary for Financial Institutions
LOCATION: Washington, D.C.
EDUCATION: Yale University, B.A., J.D.; Oxford University
Michael Barr, who served as deputy assistant at the Treasury Department under the Clinton administration, is back. In May, President Obama appointed Barr to oversee financial institutions and help Treasury Secretary Timothy Geithner tackle the industry's regulatory overhaul.
Since his appointment, Barr has become a familiar face on Capitol Hill and Wall Street alike. Not only is he developing and coordinating the administration's policies on legislative and regulatory issues affecting financial institutions, Barr has also been presenting these policies to lawmakers. For one thing, he's pushing Congress on the administration's proposals to consolidate the consumer financial protection functions into a single agency. Perhaps more controversial for financial services firms is his effort to sell the idea of harmonized broker/dealer and investment advisor regulation.
Dubbed the Investor Protection Act of 2009, the proposed legislation would give the SEC broad authority to harmonize rules for brokers and investment advisors across the board. Not only that, the proposal would give the SEC power to prohibit “sales practices, conflicts of interest, and compensation schemes for financial intermediaries (including brokers, dealers, and investment advisers) that it deems contrary to the public interest and the interests of investors.”
But Barr will have to do plenty of persuading. Skeptics abound. The National Association of Personal Financial Advisors (NAPFA), for instance, says that just because the SEC is given the authority to enforce a fiduciary standard throughout the industry, doesn't mean it will. And the Consumer Federation of America's Travis Plunkett told the House Financial Services Committee last month that there's a chance that the fiduciary standard could be “watered down” by the SEC.
“The devil is in the detail with the word ‘harmonization,’” says David Tittsworth, executive director of the Investment Adviser Association. ”It's really a huge debate, it's easy to say you're going to do it. What gets complicated is when you try to implement it.” “Michael Barr is the point person in the administration as far as these issues go. He's got to help figure it out.”