Washington ? The White House turned to an experienced former investment banker Friday to run the federal government’s $700 billion bank rescue effort, selecting the head of mortgage giant Fannie Mae as an assistant treasury secretary.

Herbert Allison Jr., Fannie Mae’s president and CEO, will replace Neel Kashkari, a holdover from the Bush administration.

Allison, who must be confirmed by the Senate, would bear the title of assistant treasury secretary for financial stability and counselor to Treasury Secretary Timothy Geithner.

He would be in charge of the Troubled Asset Relief Program, the fund that has injected billions of dollars into banks in hopes of unclogging credit. He would inherit a program that has been sharply criticized in Congress and which banks have come to view warily because of the restrictions attached to receipt of its funds.

President Barack Obama’s administration has been slowly filling Treasury positions, hindered by candidates who have either withdrawn from consideration or been caught up in the vetting process.

Fannie Mae, seized by federal regulators in September, is closely overseen by federal regulators, making the chief executive’s job tough to fill in the private sector. The company, therefore, appears likely to turn to an insider as Allison’s replacement.

The Wall Street Journal reported on Friday that Fannie Mae was expected to name Michael J. Williams, the company’s chief operating officer and a longtime executive as Allison’s replacement. Fannie Mae declined to comment.

Allison’s selection presents the administration with yet another challenge. If Allison is confirmed, both Fannie Mae and Freddie Mac would be without chief executives. David Moffett, formerly Freddie Mac’s CEO, resigned in March.

In Allison, the White House selected a former Merrill Lynch investment banker who became chairman of the retirement fund manager TIAA-CREF. Allison served as finance chief for John McCain’s 2000 campaign for the Republican presidential nomination. But politically, Allison has shown himself to be bipartisan in his allegiances, contributing to both Democrats and Republicans, according to Federal Election Commission records.

Since taking over in September at Fannie Mae, where he took no salary, Allison, the son of an FBI agent, developed a reputation for open-mindedness with consumer advocates, even those who have had a contentious relationship with the giant company.

“Mr. Allison is well-positioned to lead the TARP,” said Scott Talbott, chief lobbyist for the Financial Services Roundtable, an industry group. “He has a wealth of experience with buying, selling, protecting, and managing assets to protect the taxpayer investment and strengthen the economy.”