John D. Hawke, Jr.

John D. Hawke, Jr, (born June 29, 1933) served as the United States Under Secretary of the Treasury for Domestic Finance from 1995 to 1998, and was United States Comptroller of the Currency from 1998 to 2004.

John D. Hawke, Jr., was born in New York City on June 26, 1933. He was graduated from Yale University in 1954 with a B.A. in English. From 1955 to 1957 he served on active duty with the U.S. Air Force. After graduating in 1960 from Columbia University School of Law, Hawke was a law clerk for Judge E. Barrett Prettyman on the United States Court of Appeals for the District of Columbia Circuit. From 1961 to 1962 he served as counsel to the Select Subcommittee on Education in the U.S. House of Representatives. Hawke joined the Washington, D.C., law firm of Arnold & Porter as an associate in 1962 and later became a senior partner. In 1975 he left the firm to serve as general counsel to the Board of Governors of the Federal Reserve System, returning in 1978. From 1987 to 1995 he served as chairman of the firm.

From 1970 to 1987 Hawke taught courses on federal regulation of banking at the Georgetown University Law Center. He has also taught courses on bank acquisitions and financial regulation and serves as the chairman of the Board of Advisors of the Morin Center for Banking Law Studies. In 1987 Hawke served as a member of a committee of inquiry appointed by the Chicago Mercantile Exchange to study the role of futures markets in connection with the stock market crash in October of that year.

He was a founding member of the Shadow Financial Regulatory Committee and served on the committee until joining the Treasury Department in April 1995. Hawke served for 3½ years as Under Secretary of the Treasury for Domestic Finance. In that capacity he oversaw the development of policy and legislation in the areas of financial institutions, debt management, and capital markets. After serving as Comptroller of the Currency, 1998–2004, Hawke returned to private practice with the well-connected Washington, D.C. law firm of Arnold & Porter.

Hawke resides in Washington, D.C. He was married in 1962 to the late Marie R. Hawke and has four adult children.

Hawke was sworn in as the 28th Comptroller of the Currency on December 8, 1998. After serving for 10 months under a recess appointment, he was sworn in for a full five-year term as Comptroller on October 13, 1999.

During his term as Comptroller, Hawke has stressed the importance of the safety and soundness of national banks through such supervisory initiatives as Project Canary (an "early warning" system) and the "Supervision in the Future", which makes extensive use of technology.

He has introduced management and budget reforms in the internal operations of the Office of the Comptroller of the Currency as well as programs designed to increase workplace diversity.

Decision to Bar States from Monitoring and Regulating Banks

Also innovative was the Office's use, in 2003, of the 1863 National Bank Act to prevent the attorneys general of all 50 states from investigating and prosecuting predatory lending practices by banks and mortgage companies. Even in the face of a federal lawsuit filed by all 50 Attorneys General, the Office claimed the right to prevent the enforcement of any banking law in any state as applied to any national bank. This may have allowed the later financial collapse of the world's economies to occur.

A recent Business Week article highlights Hawke's role in shielding the banking industry from state regulation during his tenure as Comptroller of the Currency. Reports that Hawke expressed skepticism when two attorneys general, Iowa's Tom Miller and North Carolina's Roy Cooper, representing a committee of state officials, warned him about the potential impact of worrisome new forms of predatory lending.

The state government officials wanted more power to limit exceeding high interest rates and oppressive mortgage terms. Hawke, described by Business Week as "a veteran banking industry," refused to budge and vowed to pursue federal policies of "pre-emption" that hindered or even prevented states from reining in the lenders. "The AGs left the tense hour-long meeting realizing that Washington had become a foe in the nascent fight against reckless real estate finance. The OCC 'took 50 sheriffs off the job during the time the mortgage lending industry was becoming the Wild West', Cooper says." The doctrine of pre-emption that Hawke cited asserts that federal authority trumps state government authority when their regulatory rules come into conflict.

Business Week quotes Kathleen E. Keest, a former Iowa assistant attorney general who now works for the nonprofit Center for Responsible Lending, that pre-emption "was a significant contributor to the subprime meltdown ... It pushed aside state laws and state law enforcement that would have sent the message that there were still standards in place, and it was a big part of the message to the industry that it could regulate itself without rules." Business Week quotes Hawke's response as, "That bull----." Hawke apparently acknowledges the disagreement with Generals Miller and Cooper, but denies that pre-emption contributed to the subprime crisis. The report notes that the Comptroller of the Currency's office brought 495 enforcement actions against national banks during the 2000–2006 period, but only 13 were consumer related.

Supervisory Structure

The disparity between the supervisory fees that state and national banks pay has been a priority during Hawke's tenure, and he has emphasized relief from regulatory burden for national banks. His community bank initiative stresses streamlined supervision and increased outreach.

Hawke has written extensively on matters relating to the regulation of financial institutions and is the author of Commentaries on Banking Regulation, published in 1985.