The White House is set to nominate Kristin Johnson, a current commissioner at the Commodity Futures Trading Commission (CFTC), to fill a top role at the US Treasury Department overseeing banks. Johnson is expected to become the Assistant Secretary of the Treasury for Financial Institutions, with the announcement expected to be made public soon. If confirmed, she will lead financial policies on credit unions, insurance, and consumer protection, working closely with the Treasury Secretary and coordinating with federal regulators and banking agencies. The position has been vacant since Graham Steele’s departure in January 2024, sparking concerns about a conflict of interest in decision-making.
Congressman Don Meuser expressed his disapproval of Johnson’s potential switch in a post on May 10, citing concerns about conflicting loyalties and interests which could compromise the impartiality of the CFTC as an independent agency. However, financial experts and observers remain optimistic about Johnson’s confirmation, with endorsements from influential figures such as Maxine Waters, the Congressional Black Caucus, and the top Democrat on the House Financial Services Committee. Waters highlighted Johnson’s achievements, including her work on maintaining the integrity of financial markets, advocating for rigorous standards, and leading the CFTC’s efforts on artificial intelligence (AI). She believes Johnson’s status as a person of color will ensure diversity in the leadership of the US Treasury Department.
Johnson’s tenure as a CFTC commissioner has been marked by her proactive stance, including proposing measures to improve oversight of crypto businesses and praising the Binance settlement as a template for how crypto businesses should operate in the US. In a recent speech, Johnson addressed the misuse of artificial intelligence (AI) in financial markets, particularly in decentralized finance (DeFi), and proposed heightened penalties to tackle AI’s role in such markets. She expressed concerns about the integration of AI into DeFi’s blockchain-based ecosystems and the challenges it poses for supervision, compliance, risk management, and enforcement. Johnson suggested the creation of an “AI Fraud Enforcement Task Force” involving various departments within the CFTC’s enforcement division and other regulators like the Federal Reserve and the Securities and Exchange Commission.
The news of Johnson’s nomination for the Treasury job follows her ongoing efforts to promote the regulation of AI and address its misuse in financial markets, particularly in the context of DeFi. Her proposals have garnered attention and acclaim, showcasing her leadership in this evolving field. Despite concerns raised by Congressman Meuser about potential conflicts of interest, Johnson’s confirmation is expected to proceed smoothly, given her endorsements from key figures in Congress and her track record of advocating for the integrity of financial markets and the adoption of rigorous standards.
Johnson’s transition from the CFTC to the US Treasury Department is seen as a positive step towards ensuring diversity in leadership and addressing pressing issues such as the regulation of AI in financial markets. Her proactive approach and notable achievements as a commissioner have positioned her as a capable candidate to lead financial policies on credit unions, insurance, and consumer protection within the Treasury Department. With endorsements from influential figures and a track record of pushing for regulatory improvements, Johnson’s confirmation is likely to proceed smoothly, despite concerns about potential conflicts of interest raised by some observers.
