By Susan Heavey and Alexandra Alper
WASHINGTON (Reuters) - Former Minnesota governor Tim Pawlenty quit his position in the campaign of Republican presidential candidate Mitt Romney on Thursday to become a leading Washington lobbyist for Wall Street banks. He said he continued to support Romney.
Pawlenty will be the head of the Financial Services Roundtable, a U.S. lobbying group that represents JP Morgan Chase & Co and Wells Fargo & Co, among other financial companies.
After giving up his own bid for the Republican presidential nomination last year, Pawlenty backed Romney and has been a national co-chairman of that campaign. Pawlenty was passed over to become Romney's vice presidential running mate in favor of Wisconsin Congressman Paul Ryan.
Pawlenty's departure comes as Romney is struggling to stabilize his White House bid after a secretly recorded video showed him disparaging a large part of the U.S. electorate.
While Pawlenty made regular appearances in the media to promote Romney, he was not a major figure in the former Massachusetts governor's campaign ahead of the November 6 election.
Pawlenty takes over as president and chief executive officer of the industry group on November 1 and will replace outgoing CEO Steve Bartlett, whose departure was announced earlier this year.
"Recognizing the bipartisan nature of the Roundtable, I have resigned from my position as the Romney national co-chair and continue, of course, to support Mitt," Pawlenty told reporters.
He said that the career move meant he would not play a role in a Romney administration if the Republican contender beats Democratic President Barack Obama.
Romney said Pawlenty will be missed on the campaign.
"While I regret he cannot continue as co-chair of my campaign, his new position advancing the integrity of our financial system is vital to the future of our country. I congratulate him on his new position and wish him every success in carrying out his new mission," Romney said in a statement.
As a top lobbyist, Pawlenty will play a major role in the industry's efforts to make the new Dodd-Frank rules, which Congress passed in 2010 in response to the 2007-2009 financial crisis, more favorable for Wall Street as regulators implement the law.
The measure - a response to the crisis fueled by risky financial swaps trading at some firms that required multibillion-dollar tax-payer bailouts - has yet to be fully enacted. Banks are still under fire from reform groups for their roles in the crisis.
"There is progress that has been made in terms of restoring the reputation and credibility of the financial services industry in this country, but more work needs to be done," Pawlenty told reporters.
While Pawlenty is generally regarded as a pro-business conservative, he has made comments critical of Wall Street.
"I went to Wall Street and told them to get their snouts out of the trough because they are some of the worst offenders when it comes to bailouts and carve-outs and special deals," Pawlenty said in June, 2011 at a Faith and Freedom Coalition Conference in Washington DC.
On Thursday, Pawlenty offered few specifics about the reforms he would seek as head of the group, but said the implementation of Dodd-Frank created some "challenges around vagueness and duplication of effort and oversight" that required refinement and clarification.
He also stressed that despite his role in the Romney campaign, he was well suited to reaching out to Democrats. "I understand the importance of taking a bipartisan approach to these issues ... and I have got a history and a record of doing that."
The Financial Services Roundtable represents 100 integrated financial services companies and accounts for $92.7 trillion in managed assets, $1.2 trillion in revenue, and 2.3 million jobs, according to the group.
The group spent $4.5 million on lobbying in the first two quarters of 2012.
(Additional reporting by Steve Holland; Editing by Vicki Allen and Claudia Parsons)