The Federal Reserve’s top regulatory official, Michael Barr, announced Monday that he will step down in the coming weeks, clearing the way for President-elect Donald Trump to reshape federal banking regulation.

Barr, who has served as the Fed’s vice chair for supervision since 2022, said he would resign from that role by Feb. 28 or earlier if his successor is confirmed. He said he will continue to serve as a member of the Federal Reserve Board.

His resignation will avert what could have been a major legal fight if Trump had sought to fire or demote him. Barr had been discussing his options with outside legal counsel.

Barr’s term as vice chair for supervision had been set to run until 2026. But some Republicans and Trump allies had floated a legally controversial plan to try to remove or demote him so Trump could more easily enact his plans for financial regulation.

“The risk of a dispute over the position could be a distraction from our mission,” Barr said in a statement. “In the current environment, I’ve determined that I would be more effective in serving the American people from my role as governor.”

During his tenure, he oversaw the supervision and regulation of banks during the string of regional bank failures in the spring of 2023. He also frequently sparred with banking industry officials and congressional Republicans over his regulatory agenda, which included a push to increase capital requirements on the nation’s largest banks.

That regulatory agenda is now on pause, the Fed said. The central bank said in a statement that it “does not intend to take up any major rulemaking until a vice chair for supervision success is confirmed.”

“It has been an honor and a privilege to serve as the Federal Reserve Board’s vice chair for supervision, and to work with colleagues to help maintain the stability and strength of the U.S. financial system so that it can meet the needs of American families and businesses,” Barr wrote in his resignation letter to President Joe Biden. “I look forward to continuing to serve the American people as governor.”