Gary Gensler

Gensler served in the United States Department of the Treasury as Assistant Secretary for Financial Institutions from 1997 to 1999, then as Undersecretary for Domestic Finance from 1999 to 2001. As Assistant Secretary, Gensler served as a senior advisor to the Secretary of the Treasury in developing and implementing the federal government's policies for debt management and the sale of U.S. government securities.[13] In 1999 and 2000, under then-Treasury Secretary Lawrence Summers, Gensler fought for passage of the Commodity Futures Modernization Act, which exempted over-the-counter derivatives from regulation.[20]

As Undersecretary of the Treasury for Domestic Finance, Gensler advised and assisted Treasury Secretaries Robert Rubin and Lawrence Summers on aspects of domestic finance, including formulating policy and legislation in the areas of financial institutions, public debt management, capital markets, government financial management services, federal lending, fiscal affairs, government sponsored enterprises, and community development.[13]

While serving at the Treasury Department, Gensler was awarded the agency's highest honor, the Alexander Hamilton Award, for his service.[9]

In 2001, Gensler joined the staff of U.S. Senator Paul Sarbanes, chairman of the Senate Banking Committee, as a senior advisor and helped write the Sarbanes-Oxley law, which tightened accounting standards in the wake of the Enron and WorldCom scandals.[12]

Then-President-elect Barack Obama nominated Gensler to serve as the 11th chairman of the CFTC on December 18, 2008.[16] After some initial opposition to Gensler's nomination amongst the progressive members of the Democratic caucus,[12] Gensler was approved by the U.S. Senate in an 88–6 confirmation vote.[21] Gensler was sworn in on May 26, 2009, pledging to work to "urgently close the gaps in our laws to bring much-needed transparency and regulation to the over-the-counter derivatives market to lower risks, strengthen market integrity and protect investors."[22]

Gensler was described as "one of the leading reformers after the financial crisis."[6]

During Gensler's tenure at the CFTC, he worked closely with the Obama Administration, United States Congress and other regulators to transform the $400 trillion financial derivatives markets that were at the center of the 2008 financial crisis.[23] Upon becoming chairman, Gensler began leading the Obama Administration's effort "to start policing the Wild West of finance: the murky market for over-the-counter derivatives."[12] When the Treasury Department released draft legislation to bring regulatory oversight to the swaps market, Gensler sent a letter to Congress arguing that the proposal did not go far enough.[24]

By the spring of 2010, the momentum in Congress was toward Gensler's vision for derivatives oversight,[11] and Congress passed comprehensive reform as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act in July 2010.

After the passage of the Dodd-Frank Act, Gensler led the CFTC's effort to write the rules required to regulate the swaps markets.[25] He oversaw the agency as it wrote 68 new rules, orders and guidances[26] and as its reach extended from a $35 trillion futures market to a $400 trillion swaps market.[6] Under Gensler, the bipartisan commission reached unanimous votes to approve more than 70 percent of the agency's rulemakings.[6] By the time Gensler left the CFTC in January 2014, the agency was near completion of the rule-writing process to implement the Dodd-Frank Act.[27]

Gensler led a revitalization of the enforcement division of the agency, most notably in its prosecution of an enforcement case regarding manipulation of Libor, the London interbank offered rate.[28]

Early in his tenure, Gensler listened to tape recordings of two Barclays employees as they discussed plans to report false interest rates in an effort to manipulate Libor.[28] Libor is the average interest rate estimated by leading banks in London that the average leading bank would be charged if borrowing from other banks.[29] It is used as a reference rate for many financial products, including adjustable rate mortgages, student loans, and car payments.[4]

"A driving force behind the latest crackdown tied to LIBOR,"[4] Gensler worked with enforcement division director David Meister and his team to lead the investigative effort and brought charges against five financial institutions for the manipulation of Libor and other benchmark interest rates, resulting in more than $1.7 billion in penalties.[9] Barclays alone paid $450 million in fines as a result of the Libor investigation.[4] Gensler has called Libor "unsustainable" and argued that it should be replaced as a benchmark rate.[30]

For his work to reform the financial regulatory system, The Institute for the Fiduciary Standard awarded Gensler with the 2014 Tamar Frankel Fiduciary Prize.[31]

In 2017, Gensler was selected by the Maryland Senate President and House Speaker to serve as Chairman of the Maryland Financial Consumer Protection Commission, which assessed the impact of potential changes to federal financial industry laws, regulations, budgets, and policies on the state.[32] Under Gensler's leadership, the Commission recommended changes to State law to enhance consumer financial protections, including enhancing standards of care, clarifying State law to set standards for student loan servicers, and protecting Maryland buyers of manufactured homes. In 2018, student loan legislation recommended by the Commission established a student loan ombudsman, added the federal Military Lending Act and the federal Servicemembers Civil Relief Act to state law, increased civil monetary penalties for violations, and codified some modifications on debt collection laws.[33] In 2019, the state enacted additional Commission-recommended legislation to create a Student Borrower Bill of Rights to protect students from predatory practices.[34]