Tarullo has been the member of the Board Governors of the central bank since January 2009 and has been overseeing the regulation of the financial sector. The appointments will allow the new president to reshape the most powerful central bank in the world in his mold.
Daniel Tarullo, who helped enforce banking rules in the wake of the global financial crisis, will leave the central bank April 5, almost five years before his term expires.
He served as chairman of the Fed's committee on bank supervision, putting him in charge of enforcement and the stress tests that examine if lenders are prepared to weather the next economic storm.
Other potential candidates include John Allison, a member of the Cato Institute's board who was CEO of regional bank BB&T (BBT) from 1989 through 2008; Paul Atkins, a former Republican member of the Securities and Exchange Commission; and Tom Hoenig, vice chairman at the Federal Deposit Insurance Corp. and a top proponent of reinstating a statute that would effectively break up the largest banks.
The governor plans to leave around April 5, and his departure intensifies the speculation around whom President Trump might choose as the Fed's vice chairman for bank supervision. With his departure, the seven-person board will have three vacancies to fill.
"Dan led the Fed's work to craft a new framework for ensuring the safety and soundness of our financial system following the financial crisis and made invaluable contributions across the entire range of the Fed's responsibilities", Chairwoman Janet Yellen said.
Tarullo, 64, is leaving well short of the 2022 end of his term. But the Obama administration never filled the post, reflecting in part the sharp disagreements between Democrats and Republicans in Congress over how the financial system should be regulated. Trump has promised to dismantle 2010's regulatory reform package, known as the Dodd-Frank Act, signing an executive order last week calling for a review of the rules that govern the financial industry.