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Bostic says Fed vacancies are major challenge, 'very important' to fill spots

Atlanta Federal Reserve President Raphael Bostic said Feb. 22 the vacant spots on the Fed's Board of Governors make it "much more difficult" for the central bank to complete its wide array of tasks.

The board has only three of its seven seats filled, which has not happened since the central bank's structure started in 1936. The Fed last year tweaked its quorum requirements for the board as it anticipated logistical issues would occur when former Chair Janet Yellen left.

Bostic said the level of work at the Washington, D.C.-based board is the same but "gets distributed more heavily across everybody."

"It's very important that we get these vacancies filled so that we can more effectively go about what we're doing," said Bostic, a former Fed staffer.

Bostic, as a regional Fed president, is not a member of the Fed's Board of Governors, whose members are presidential appointees. President Donald Trump has nominated a fourth member to the board — economist Marvin Goodfriend — but his prospects of getting confirmed in the Senate became uncertain after a GOP senator said he would not vote for him. The Fed's vice chairman role is among the vacancies, though the Trump administration has floated several names it is considering.

The board's members, along with five regional Fed presidents, get to vote on monetary policy on the Federal Open Market Committee, though Bostic said the voices of the board will be "skewed" toward the regional presidents until the vacancies are filled.

The issue, he added, represents yet another degree of change for Fed officials at a time when the top leadership changed over to the new chairman, Jerome Powell.

"To have that and to lose another governor means that the level of changes that we're going to have to work through is actually greater," he said, adding the central bank's experienced staff should help reduce any issues.

Bostic was also asked about the state of the Consumer Financial Protection Bureau, whose acting director, Mick Mulvaney, has said its former leader was too forceful in "bringing the full weight of the federal government down on the necks of the people we serve." Since the change in leadership, the agency has begun a review of a payday lending rule that the CFPB developed under the Obama administration, and Mulvaney has proposed further changes.

Every administration, Bostic said, has different philosophies on how agencies should operate, and he acknowledged some critics think the CFPB was too aggressive in prior years. But he said the creation of the agency has helped publicize a debate that regulators had internally about consumer interest issues.

"That principle, I think, is quite important," he said. "And I hope we don't lose that as we move forward in seeing how the CFPB evolves."