From Freddie to Citi, McQuade can't avoid 'onerous' oversight
Unfortunately, McQuade's new position as CEO of commercial banking operations at Citigroup (C) probably won't give him much relief from regulators' prying eyes. After all, the Treasury Department now owns 36 percent of Citi's common stock and the government's fingerprints are all over yesterday's management shakeup at the company.
When McQuade was at Freddie Mac, he was heir apparent to Chairman and CEO Richard Syron, but the two men reportedly clashed. Publicly, McQuade, brought on in 2004 to help clean up after a 2003 accounting scandal, said he didn't relish the prospect of running a company always under constant government scrutiny.
In May 2007, shortly after declining an offer from Freddie's board to take over as CEO, McQuade told The American Banker, a financial industry trade paper, that "there is a significant amount of frustration that a CEO does feel with the government in these roles . . . It's an element of the job that doesn't exist in most jobs in the country [and] I'd say it was one of the less appealing aspects of the job."
As the Wall Street Journal reported, McQuade told colleagues he didn't want to be a "piñata" for opponents of government-sponsored enterprises, or GSEs, like Freddie Mac and Fannie Mae (FNM).
Certainly, McQuade isn't going to be CEO at Citi -- Vikram Pandit still has that job for now. But Citibank N.A., the division he'll be running, includes the company's retail branch network, credit cards and consumer lending. Various government agencies, including the Federal Deposit Insurance Corp., the Federal Reserve and the Comptroller of the Currency, are sure to be keenly interested in its financial health.
A tour through the copious news coverage McQuade has received throughout his career at Manufacturers Hanover, FleetBoston Financial, Bank of America, Freddie Mac and Merrill Lynch reveals a few other noteworthy quotes. For example, while speaking to financial industry publication Mortgage Line in November 2005, McQuade said he was "not terribly worried about so-called exotic mortgages that many borrowers have embraced as an affordable solution in higher-priced housing markets. [They are] "better underwritten than the typical 15- or 30-year fixed loan."
To be fair, that's not a direct quote. However, this is: "At the end of the day, I don't think they'll turn out to be the kind of problem the press expects them to be."
Of course, that turned out not to be true.