Fri. Jan 21st, 2022

A top US bank regulator appointed by former President Donald Trump announced on Friday that she was resigning from her post, paving the way for the Biden administration to shape financial oversight more directly.

Jelena McWilliams, who has served as chair of the Federal Deposit Insurance Corporation since June 2018, said she would leave the organization on February 4, more than a year earlier than when her term would expire.

The decision comes after a rift between the top leadership at the FDIC, which secures deposits with the country’s borrowers, and the Consumer Financial Protection Bureau, which serves as the US consumer watchdog, over a review of bank mergers.

The situation pits McWilliams against FDIC councilor Martin Gruenberg and Rohit Chopra, director of the CFPB, both Democrats. Gruenberg and Chopra, as part of a Democratic majority, voted to launch a review of rules related to the bank merger approval process, which McWilliams opposed.

McWilliams detailed struggled in an opinion piece for The Wall Street Journal earlier in December, calling the situation “unprecedented.”

“This conflict is not about bank mergers. If it were, board members would have been willing to work with me and the FDIC staff rather than attempt a hostile takeover of the FDIC’s internal processes, staff and board agenda, ”she wrote. “This episode is an attempt to take control of an independent agency’s chairman with a change in administration.”

In her resignation letter to President Joe Biden, McWilliams said it was a “tremendous honor” to serve at the helm of the FDIC and underlined the robustness of the financial system by one of the worst economic contractions in history last year.

“The unexpected shock of Covid-19 tested the resilience of our financial system beginning in March 2020, and the FDIC has taken rapid steps to maintain stability and provide flexibility to banks and consumers,” she wrote. “The core of our financial system not only withstood the storm, but was a tangible source of power for the U.S. economy.”

Prior to her time at the FDIC, McWilliams served as Chief Advocate for the Senate Committee on Banking, Housing and Urban Affairs and previously served as an attorney on the Federal Reserve Board of Governors.

With her departure, Biden still has an open regulatory position to fill. The top supervisor at the US Federal Reserve remains vacant after the expiration of Randal Quarles’ term in October.

The former Fed governor, who left the institution altogether in December, was appointed to that post by Trump in 2017.

Quarles has come under fire from the Democratic Party’s progressive wing for easing some of the rules and regulations restricting banks in the wake of the global financial crisis.

Candidates for both the FDIC position and the Vice-Chair of the Fed’s oversight role are expected to take a more rigorous stance on financial oversight.

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