UPDATE 1-Fed's Duke resigns, leaving one board seat open
WASHINGTON, July 11 (Reuters) - Federal Reserve Governor Elizabeth Duke, who had taken a lead role on housing issues at the U.S. central bank, resigned on Thursday nearly 18 months after her term expired, the Fed said.
Her resignation is effective Aug. 31. Duke, 60, was appointed to the Fed's Washington-based board in August 2008 by former President George W. Bush. The Fed said she made no announcement about her future plans.
Duke's term had expired in January 2012, at which time she said she planned to remain at the Fed for the "foreseeable future." She never said, however, that she would stick around until someone else was nominated for her seat.
Fed governors, who are permanent voting members of the bank's powerful policy-setting committee, can remain in office after their terms have expired, unless they are replaced by the president.
It is not unusual to have one or more unfilled seats on the seven-member Fed Board. Appointments require confirmation by the Senate, which can take considerable time if a lawmaker decides to slow the process.
President Barack Obama has yet to nominate someone to replace Duke. A White House spokeswoman said the president was grateful to Duke for her years of valued service at the Fed.
Her departure leaves a Board in which every member, including Fed Chairman Ben Bernanke, was either appointed or re-appointed by Obama.
Duke, who never voted against the chairman during her time on the Board, was not a loud voice in the monetary policy debate and her departure is not likely to impact Fed action as officials weigh scaling back bond purchases later this year.
Bernanke thanked Duke for her service.
"She brought fresh ideas grounded in her deep knowledge of the banking industry and the real-world dynamic between borrowers and lenders. I wish her the best in her future endeavors," he said in a statement.
Duke was a community banker in Virginia before joining the Fed, where she became an internal advocate for more forceful action to spur a stronger housing recovery, warning that failure to do so could hurt the national economy.
She helped craft a controversial Fed white paper that made recommendations on how policymakers in Washington could help heal the damaged housing market. That raised eyebrows among lawmakers when it was published in January 2012, who thought the Fed was going beyond its remit.
Duke, together with Governor Sarah Raskin, oversaw the paper when it was pulled together in 2011. At the time, the U.S. economy appeared at risk of tipping back into recession and there was a great deal of concern about why the housing sector was not healing faster.
As a former community banker, Duke had a keen understanding of the harm that could be done to a bank saddled with foreclosed properties, and she also spoke out forcefully on the wider costs to communities blighted by a large number of abandoned homes.
She argued that mortgage finance giants Fannie Mae and Freddie Mac, the government-sponsored enterprises at the heart of the U.S. housing market, should do more to help.
"Policymakers should at least consider policies that take into account the role the GSEs could play in hastening the healing of the housing market rather than focusing entirely on minimizing losses to the GSEs," Duke said in January 2012.
Fannie Mae and Freddie Mac had been rescued by the government in 2008 as they faced insolvency due to mounting loan losses, and had been propped up with taxpayer funds.