FDIC Chair McWilliams to Resign in Early February

Jan 5, 2022Federal Regulation, News

In a surprising move that comes after weeks of partisan infighting at the agency, Federal Deposit Insurance Corporation (FDIC) Chairwoman Jelena McWilliams announced on December 31 that she would be resigning as Chairwoman effective February 4, 2022.

In her resignation letter to President Biden, McWilliams said that “the agency has focused on its fundamental mission to maintain and instill confidence in our banking system while at the same time promoting innovation, strengthening financial inclusion, improving transparency, and supporting community banks and minority depository institutions, including through the creation of the Mission Driven Bank Fund.”

A rift with the FDIC’s board threatened McWilliams’ leadership when Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra and former FDIC Chair Martin Gruenberg announced that the board launched a review of bank merger policy without her support. With McWilliams’ departure, Gruenberg will become acting chair until a permanent successor is nominated and confirmed—marking his third stint leading the FDIC.

For progressives, the move was necessary to undo deregulation from the Trump Administration, but Republicans accused Chopra and Gruenberg of trying to initiate a coup at the FDIC. Others warned that the tension could bring joint policymaking among bank regulators to a halt.

Senator Pat Toomey (R-Pa.), ranking member of the Senate Banking Committee, expressed concern about the FDIC potentially supporting the board’s actions with McWilliams’ departure and urged Biden to “fill the two vacant board seats and Interim Director Gruenberg’s seat with qualified individuals who will respect the FDIC’s tradition of operating free from partisan political interference.”

Additionally, Patrick McHenry (R-N.C.), top Republican on the House Financial Services Committee, noted that McWilliams’ resignation in the current climate “raises serious concerns about the continued independence of the FDIC. Mr. Gruenberg, who was last confirmed nearly a decade ago and has long outstayed his tenure at the FDIC, is not a suitable replacement.”

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