UPDATE 1-Under scrutiny, NY Fed sets short list for Dudley successor

(Recasts with reported details on candidates, comments from NY Fed)

NEW YORK, March 16 (Reuters) - The Federal Reserve Bank of New York is considering a "handful" of candidates for what is seen as the second most influential job at the U.S. central bank, its directors said on Friday, as political pressure mounts to choose someone who breaks with past precedent.

William Dudley, a key architect of the Fed's crisis response and a core policymaker, plans to step down as New York Fed president by mid-year, hastening an unprecedented leadership transition at the central bank.

Because it is the most powerful Fed job not chosen by the White House, Democrats and activists see Dudley's departure as a chance to diversify the upper ranks of an institution long dominated by white men with ties to Wall Street.

The New York Fed directors leading the search described in a statement a months-long process of meeting with a range of community and business groups, and narrowing their list of candidates from 30 to about 15 before meeting them in late January.

After "a small number" opted out, "we further narrowed the list to a handful of final candidates, who we are pleased to say are eminently qualified," said the directors, Sara Horowitz and Glenn Hutchins. They did not say when a choice would be made.

On March 1, Reuters reported the January interviews had taken place and named six candidates said to be on a short list, most of them with Wall Street ties, including two women and two black men.

The New York Fed's president has a permanent vote on interest-rate policy; serves as vice chair of the policy-making committee; oversees market operations including $4.4 trillion in assets; and supervises Wall Street.

Because of this, some see Dudley's previous experience at Goldman Sachs and running the New York Fed's market operations as a benefit. Others see it as a sign of the Fed's overly cozy ties with bankers.

In separate recent letters to the directors, 32 U.S. House and Senate Democrats raised concerns over "group think" and urged them to consider candidates with a diversity of professional, racial and gender backgrounds. On Monday, community and labor activists marched outside the New York Fed calling for independence from Wall Street.

The New York Fed said it was seeking a nominee who understands "the plumbing of the banking system," the institution's international role, and "the new economy and labor markets." It added that a diverse pool of candidates was initially interested in the job. (Reporting by Jonathan Spicer; Editing by Jonathan Oatis and Tom Brown)