By Terri Jo Neff |
Jelena McWilliams, the Trump-appointed chairwoman of the Federal Deposit Insurance Corp. (FDIC) and only Republican on the board of directors, is resigning her position after accusing three Democratic directors of engaging in “a hostile takeover” of the agency responsible for maintaining stability and public confidence in the nation’s financial system.
News of McWilliams’s unexpected resignation effective February 4 was buried in a press release issued on New Year’s Eve. She took the helm of the FDIC in June 2018 after being confirmed by Congress to serve a five-year term as chair of what is supposed to be an independent agency that examines and supervises more than 5,200 banks and financial institutions for safety, soundness, and consumer protection. It also manages receiverships and insures deposits.
McWilliams’ announcement came just two weeks after she submitted an op-ed to the Wall Street Journal warning of the politization of America’s banking system.
The former executive vice president for Fifth Third Bank wrote of how for nearly 90 years day-to-day FDIC operations were delegated to its chairman, who controlled the board agenda and “worked collaboratively with other board members” regardless of political difference.
But that collegiality ended in late October, according to McWilliams, when the three Democratic-appointed members teamed in an effort to begin a FDIC review of the standards used for bank mergers without McWilliams’ assent.
Those other members are Michael Hsu, acting Comptroller of the Currency; Michael Hsu. Rohit Chopra, director of the Consumer Financial Protection Bureau; and Martin Gruenberg, former FDIC chairman who is serving on a temporary basis because the Biden Administration has not moved to fill two vacant board positions.
The FDIC may not have more than three directors of the same political affiliation. President Joe Biden, by keeping one of the five seats open throughout his first year in office, has been able to impede McWilliams’ inherent powers as chair.
McWilliams, who previously served as chief counsel on the U.S. Senate Banking, Housing and Urban Affairs Committee, initiated a program at the FDIC called Trust through Transparency in an effort to make the FDIC more accessible, understandable, and responsive. As part of that initiative, she visited in person with stakeholders in 30 states prior to COVID-19 then continued the visits on a virtual basis, including a meeting with the Arizona Bankers Association.
The Republicans on the U.S. House Committee on Financial Services tweeted Monday about concerns with McWilliams’ resignation.
“The attempted power grab by CFPB Director Chopra and Interim Chair Gruenberg raises serious concerns about @FDICgov‘s independence. Dems’ support for this unprecedented action exposes their ongoing effort to politicize our regulators for their own gain.”
McWilliams also continues to have the public support of industry groups due to her efforts to ensure all stakeholders were heard. One such supporter is Richard Hunt, the CEO of the Consumer Bankers Association.
“A total class act who always sought balance—much to my chagrin at times,” Hunt said after learning of McWilliams’ resignation. “The FDIC cannot operate where the minority is not represented.”