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In late 2015, Fed Chairwoman Janet Yellen started Neel Kashkari’s interview for president of the Federal Reserve Bank of Minneapolis by saying he would have a really strong team if he took the job. She then mentioned one person in particular.

“Let me tell you about Jim Lyon,” Kashkari remembers her saying.

Jim Lyon since 2000 has been first vice president and chief operating officer of the Minneapolis Fed, the inside man who kept a complex 1,000-person operation running smoothly for three presidents who were prominent figures in economics.

“This bank has a history of punching above its weight, picking important issues and really making a ­contribution,” Kashkari said. “Jim’s work on the operational side has been really important in making that happen.”

Over a 41-year career, Lyon led the region’s bank supervision, developed technology and reshaped duties of all 12 regional Feds. And in 2010, the Fed’s leaders in Washington selected Lyon to oversee implementation of the Dodd-Frank Act, the biggest change in banking laws since the Great Depression.

“We needed somebody who was smart, levelheaded, effective and had a broad knowledge not only of the Federal Reserve system but the law,” ­Donald Kohn, the Fed’s vice chairman at the time, recalled last week. “I remember thinking there’s no one better suited to come in and make it move.”

For Lyon, that meant a grueling two- and-a-half years working four days a week in Washington and the fifth at the Minneapolis Fed’s headquarters on Hennepin Avenue. But it also was the ­climax of a career that began in 1976 with a summer internship in the bank’s legal department and will end later this month with his retirement, just after turning 65.

“I thought the idea of working for a summer for the Fed would be a really cool thing,” Lyon said. “I had no sense that would result in a really enjoyable and memorable career.”

Few people these days spend an entire career at one employer. The Fed, by the nature and prominence of its work, tends to retain employees longer than most, executives at the institution say. But even to them, Lyon stands out not just for his longevity but his ability to balance daily work with the need to adapt to regulatory and technological change.

“It’s easy to manage day-to-day operations,” said MayKao Hang, who chairs the Minneapolis Fed’s board of directors. “It’s hard to anticipate and formulate and invent the future for 40 years.”

Lyon turned out to be the last and longest-serving first vice president for Gary Stern, who was president of the Minneapolis Fed from 1985 to 2009.

“Jim is an exceedingly capable guy who is also easy to work with, and he was well respected throughout the Federal Reserve System and in Washington,” Stern said. “All of which made it easy for me for many years.”

No profit target

Lyon said he realized shortly after he was given a full-time position in 1977 on the bank’s legal staff that it was a “really great fit for my personal values and aspirations.” The breadth of its policy, regulatory and service responsibilities to banks from Montana to the Upper Peninsula of Michigan appealed to him. And so did its insulation from political and, to a lesser degree, financial pressure.

“The Fed is focused on advancing the public interest, not its own interest,” he said. “It’s important for the bank to be efficient, but I don’t have a profit target I’m trying to meet.”

In 1981, he became ­special assistant to the bank’s president, Gerald Corrigan. Two years later, he joined its supervision department just as agriculture land values started collapsing around the ­Midwest, leading to the first bank failures in the region since the 1930s.

“We had no institutional memory of how you deal with one of these things,” Lyon said. “Within a year or two, we were doing them every Friday.”

When he started, the bank supervision department had a single Radio Shack portable computer, used to run a spreadsheet on debt amortization. But Lyon quickly realized that PCs would revolutionize banking. He bought an instruction book on databases and a home computer to start building some expertise in technology. By the end of the decade, he was making decisions on technology projects for supervision units at all the regional Feds.

“How I positioned myself was not as a programmer or technologist but as someone who understood the intersection of the technology and business needs,” he said. “That process of being open to change, whether it’s technology or business, that adaptability, is really important.”

The most difficult change for Lyon came about a decade ago when, a few years into his job as first vice president, he oversaw the closing of its check-processing department, a 24-hour-a-day operation that worked for the banks in the Minneapolis Fed’s region. The downsizing eliminated the work of about 300 ­people, some of whom were also career employees.

“I went to a lot of farewell parties. It wasn’t fun for anybody,” Lyon said.

Shepherding Dodd-Frank

In August 2010, when Lyon got the call to direct the implementation of Dodd-Frank, he initially said no. Narayana Kocherlakota had arrived a short time earlier, the first new president at the Minneapolis bank since the 1980s. And Lyon didn’t think the logistics of stepping out of the first vice president job, even with the promise that he could return to it, would work for anyone.

“It was a very challenging situation,” Kocherlakota said. “But if there was anyone who could do it, it was Jim. I also knew our team could make it work.”

In Washington, Lyon tackled a list of 256 projects that the Fed on its own or with other agencies needed to undertake to comply with the new financial law. Most had deadlines and all were scrutinized by Congress, which regularly called then-Chairman Ben Bernanke to hearings for updates. Over two years, about 500 Fed employees reported in to Lyon’s team.

Lyon said he’s now glad he did it. “At reasonably frequent points in my career, there’s been an interesting, new, different challenge,” he said. “Taking on things that look a little big and overwhelming can be really rewarding. This turned out to be that.”

Fit of a lifetime

The Minneapolis Fed is already preparing for work after Lyon. Its board of directors last fall appointed Ron Feldman, the bank’s policy chief, to succeed him. The board last year directed Kashkari and Lyon to develop a strategic plan for the bank, the smallest in the Fed system, as the economy evolves and need for its services change.

“We want to be thought leader for the Federal Reserve System,” Kashkari said. “We’re not going to compete on scale. We’re going to compete on brainpower.”

The bank spent 2016 examining the risks posed by the nation’s largest banks. It recently launched a new initiative around income inequality.

On a trip to Fed headquarters a few years ago, Lyon passed some time in the library he used for weekly staff meetings during the Dodd-Frank work. With no one else was in the room, he found himself drawn to the shelves and found one with books written by his grandfather, Leverett Lyon, an economist in 1920s and 1930s.

“I was probably in that room for meetings 100, 150 times, but I never really paid attention to the books,” he said. “It was one of those moments, where it’s like, whoa. This was a connection to my past but it also felt in a sense like this was where I belonged.”

Evan Ramstad • 612-673-4241