The White House said Tuesday that Obama will nominate Allan R. Landon, the former chief executive of the Bank of Hawaii, to fill one of two vacancies on the seven-member board. The nomination requires Senate confirmation.
The decision comes after a lobbying campaign by community bankers who argued that the Fed, which regulates banks, should have at least one community banker on its board.
The White House said that Landon had compiled a strong record in leading the Bank of Hawaii, one of the largest in the state, through the 2008 financial crisis. Landon served as chairman and chief executive officer of the bank from 2004 to 2010.
Camden R. Fine, president of the Independent Community Bankers, an industry lobbying group, praised the selection.
"Having someone with community bank experience, such as Landon, on the board will ensure that community bank interests are more fully understood as the board considers the impact of its policies on smaller banks and the communities and rural areas they serve," Fine said in a statement.
In addition to Fine's statement, the White House released other comments praising Landon for the job he did as a bank executive and former chairman of the board of regents at the University of Hawaii.
Landon was nominated to fill the remaining term of Sarah Bloom Raskin, who stepped down in March after being picked by Obama to become deputy Treasury secretary. The White House indicated Landon would be nominated to fill the final year of Raskin's term, which ends Jan. 31, 2016, and a full 14-year term after that.
The White House gave no indication when it will put forward a nominee to fill the unexpired term of Jeremy Stein, who left in May to return to his post as an economics professor at Harvard University. That term ends in January 2018.
In a separate announcement Tuesday, the Fed said that staff economist Thomas Laubauch had been chosen as the new director of the central bank's monetary affairs division, the top staff job at the Fed. He will succeed William English.
Laubach, a Fed economist since 1997, holds a doctorate from Princeton University where former Fed Chairman Ben Bernanke, a former professor at Princeton, served as adviser on his doctoral dissertation.
In a statement, Fed Chair Janet Yellen praised Laubach as a "trusted adviser." The head of the monetary affairs division plays a key role in providing guidance to Fed officials on interest-rate policy.
The seven members of the Fed board in Washington and the presidents of the Fed's 12 regional banks serve on the Federal Open Market Committee, the Fed panel that meets eight times a year to set interest rate policies. The Fed board is also a leading bank regulator through its role overseeing bank holding companies.
At its last meeting in December, the FOMC said it planned to be "patient" in deciding when to raise a key short-term interest rate, which has remained at a record low near zero for the past six years. Most private economists believe the first rate hike will not occur until the middle of this year.