Trump nominee withdraws after battle with Democratic bank regulators

The Republican chairman of the Federal Deposit Insurance Corporation, who was appointed by former President Donald J. Trump, said Friday that she was cutting her term after a clash with Democratic banking regulators.

Jelena McWilliams, who started a five-year term as chair of the board in June 2018, will resign with effect from February 4, she wrote in a letter to President Biden. She also resigns as director of FDIC’s board. Ms. McWilliams is the only Republican currently on the board with five members, and her resignation will add a new vacancy.

“Throughout my tenure, the agency has focused on its core mission of maintaining and instilling confidence in our banking system,”[ads1]; she wrote. “Today, banks continue to maintain robust capital and liquidity levels to support lending and protect against potential losses.”

Her resignation came after Rohit Chopra, a member of the FDIC board and the new director of the Consumer Financial Protection Bureau, earlier this month complained that McWilliams had refused to acknowledge attempts by Democratic regulators to review bank merger rules. Ms. McWilliams called the conflict a “hostile takeover” of other board members in an essay in The Wall Street Journal.

Ms. McWilliams has largely adhered to Republican ideological lines during his tenure. This made her something of a barrier to President Biden’s agenda, which involves changing the federal government’s stance on major issues such as climate change and income inequality.

The Democrats on the board of the FDIC, which is mainly known for supporting consumer deposits, but which has a hand in supervising all the country’s banks, claimed that McWilliams blocked the attempts of the majority to set policy.

The partisan struggle on top of the sleepy bank regulator, which by some experts is believed to be part of an attempt by the Democrats to oust Ms. McWilliams, went public in early December. Mr. Chopra and two other Democrats on the board – Martin J. Gruenberg, a longtime member, and Michael J. Hsu, the acting controller of the currency – voted by e-mail to ask for public comment on the issue of bank mergers. A statement on the request was not posted on the FDIC’s website, but on the Consumer Agency’s website chaired by Mr. Chopra. The FDIC soon issued a statement saying it had not approved such a request for comment.

One week later, after a meeting on December 14, Mr. Chopra said in a statement: “This approach to governance is unsafe and unhealthy.” By refusing to recognize the vote of other board members, he wrote, McWilliams had made “an attack on the rule of law.” She fired back the next day, accusing other board members of trying to “get out of control” of the head of an independent agency. Banking industry groups called for calm and openness.

Pat Toomey, a Republican who sits on the Senate Banking Committee, issued a statement on Friday criticizing Democratic board members for ending the two-part partnership that has lasted the FDIC’s 88-year history.

“The recent, ruthless efforts of Director Chopra and Interim Director Gruenberg to take over the FDIC board leave a dark mark on both the FDIC and their own personal records,” Mr. Toomey wrote. “I am deeply concerned to see the administration support this extremist destruction of institutional norms and unique action to undermine the independence and integrity of our financial regulators.”

The CFPB did not immediately respond to a phone call and email requesting comment.

Source link

Back to top button