Senate Banking Committee Holds Nomination Hearing for Gruenberg to Lead FDIC

Dec 5, 2022Federal Regulation, News

The U.S. Senate Committee on Banking, Housing, and Urban Affairs held a nomination hearing last week for Martin Gruenberg to be chairman of the Federal Deposit Insurance Corp. (FDIC). Gruenberg has served as acting chair of the agency since the beginning of this year, but served as permanent chair from 2012 to 2018, and has been on its board since 2005. The hearing also considered the nominations of Travis Hill and Jonathan McKernan to be FDIC Board Members and Dr. Kimberly Ann McClain to be Assistant Secretary of the Department of Housing and Urban Development.

“The FDIC is a great agency of our government, whose mission of maintaining public confidence and stability in our financial system is critical to our country’s well-being,” Gruenberg said in his opening statement. “The opportunity to serve on the FDIC Board and to provide leadership as Chairman has been the greatest honor of my life. I can think of no opportunity that would have greater meaning to me than the chance to continue to serve.”

Many Republican lawmakers have criticized Gruenberg’s role at the FDIC for being a power grab and overextending the agency’s authority. They cited his involvement with Operation Choke Point, an initiative from the Obama administration that recommended banks end relations with ‘risky’ businesses.

In December 2021, Gruenberg and Rohit Chopra, Director of the Consumer Financial Protection Bureau (CFPB) published a review of bank merger policies without approval of the FDIC’s then chair Jelena McWilliams. Referencing that somewhat controversial action, Senator Thom Tillis (R-N.C.) said, “you can’t unring that bell, so I have great concerns about how the FDIC will operate in the future.”

Senator Pat Toomey (R-Pa.), the Banking Committee’s ranking member, said that the FDIC was urging banks to cut ties with crypto-related companies. “Based on Mr. Gruenberg’s nine months as Acting Chair⎯as well as the events that led to his time in that role⎯I’m concerned that he will continue to politicize the agency.”

Alternatively, Gruenberg garnered support from Senate Banking Committee Chairman Sherrod Brown (D-Ohio), who said that he has “the experience and dedication we need at the FDIC,” and that if confirmed, he “will continue working to protect our financial system so that when Americans place their money in FDIC-insured banks, they know their money will be protected.”

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