FDIC Chairman Jelena McWilliams today ruled a motion from CFPB Director Rohit Chopra out of order during an FDIC board meeting, stating that “it doesn’t comply with the previously stated information received from the general counsel about the legitimacy of that action.”
Chopra sought to amend the FDIC board minutes to reflect a notational vote by the board on a request for information related to oversight of bank mergers and acquisitions that he said was approved by himself, FDIC Director Martin Gruenberg and Acting Comptroller of the Currency Michael Hsu in votes over email. However, McWilliams said that “the legal division has previously determined, and the general counsel communicated to all board members, that these actions did not constitute a valid circulation of an additional vote. Therefore, the document cannot be added to the minutes.”
In a statement posted after the meeting on the CFPB website, Chopra provided more details about the push to approve a bank M&A RFI. He challenged the view that only the FDIC chairman can raise a matter for discussion at meetings of the board and called for “immediate” resolution of the conflict. Without specifying what next steps he might take, Chopra added that “[a]bsent a return to legal reality and constructive engagement, board members will need to take further steps to exercise independence from management and to ensure sound governance of the Federal Deposit Insurance Corporation.”
Hsu issued a separate statement confirming his vote alongside Chopra and Gruenberg for issuing the RFI and agreeing that a majority of FDIC board members should be able to “influence the agency’s agenda and actions.” “However, I am concerned that legal or procedural quicksand may ultimately limit our ability to act on this issue in a timely manner,” he added.
In a letter Monday to the four FDIC directors, ABA and the state bankers associations emphasized the importance of FDIC independence and transparency to the confidence of banks and consumers in deposit insurance and FDIC supervision. The letter went on to stress that “collegiality and a shared responsibility for maintaining market stability historically have overcome the forces that push and pull at non-independent agencies, allowing for gradual change. And when change comes, it is vital from a governance and regulatory expectations standpoint that federal banking agencies not create ambiguity about what constitutes an official action.”