GOP Senators Sound Alarm on Maneuvers by FDIC Board Members

A group of twelve GOP Senate Banking Committee members wrote to President Biden yesterday raising concerns about the recent conflict between FDIC board members, which stemmed from the desire of at least two of the FDIC board’s four members to release a request for information about the agency’s bank merger procedures. CFPB Director Rohit Chopra sought to have the FDIC board vote on the RFI during a board meeting this week, but FDIC Chairman Jelena McWilliams ruled the motion out of order, stating that “it doesn’t comply with the previously stated information received from the general counsel about the legitimacy of that action.”

The lawmakers expressed serious concern over these attempts to circumvent the authority of a sitting FDIC chairman. “Director Chopra and Director Gruenberg’s statement and actions make clear that they violated FDIC procedures with the apparent goal of usurping the powers of the chairman and inhibiting her ability to carry out her official duties and responsibilities,” they wrote. “In addition to violating the FDIC bylaws and processes, their actions upended an 88-year tradition of the FDIC board working on a collegial basis with its chairman as well as working independent from partisan political influence.”

They also called on the president to “nominate promptly a candidate to replace Director Gruenberg, as well as a candidate to fill the vacant Vice Chairman position on the FDIC board.” Gruenberg has been on the board since 2005, first as vice chairman and then as chairman, but his most recent six-year term expired three years ago.

The American Bankers Association  continues to emphasize the importance of an independent FDIC and an orderly, transparent policymaking process, and noted in a letter earlier this week that “it is vital from a governance and regulatory expectations standpoint that federal banking agencies not create ambiguity about what constitutes an official action.”