- The Federal Deposit Insurance Corp. (FDIC) board of directors met Tuesday for the first time since a contentious and partisan debate broke out between members over a potential revision to bank merger policy.
- FDIC Chair Jelena McWilliams struck down a request Tuesday by Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra to include, in the FDIC’s official minutes, a request for information and results of a vote on bank merger policy.
- Chopra and former FDIC Chair Martin Gruenberg, both Democrats and members of the FDIC board, published a joint review of bank merger policies last week. McWilliams swiftly denounced the move.
Tuesday marked the first public FDIC board meeting for Chopra, and the CFPB chief got off to a rocky start with McWilliams.
Chopra, Gruenberg and Acting Comptroller of the Currency Michael Hsu voted this month — via email, according to the New York Times — to request public commentary on bank merger policy.
During the meeting, Chopra lodged a request to "include the results of the notational vote and the ... request for information on the Bank Merger Act" in the FDIC’s minutes.
McWilliams ruled the motion out of order, arguing "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 and therefore the document cannot be added to the minutes."
Although Gruenberg was quick to second Chopra's motion, McWilliams smothered the board members’ attempt to circumvent the chair’s authority to set the agenda.
The discussion temporarily fizzled out and the meeting came to an end, but in the hours that followed, fiery statements on the issue emerged.
The CFPB website published a statement by Chopra on Tuesday afternoon, asserting that a supermajority of board members has the right to set the agenda within the FDIC.
"In my board member orientation, I was informed that it was the view of the Board’s General Counsel that board members may not raise matters for discussion in board meetings, and only the Chairperson has this right," Chopra said. "Although the Corporation’s bylaws specifically authorize two board members to call for special meetings, the General Counsel has taken the perplexing view that those board members cannot guarantee that any topics will actually be discussed."
Chopra, in the statement, said he received a last-minute revision to the request for information "with a series of strings attached," which he deemed unacceptable.
The CFPB chief noted an executive order President Joe Biden signed in July, calling on bank regulators to review the Bank Merger Act. Federal agencies have not denied a bank merger application in over 15 years, according to the White House website.
Chopra and Gruenberg's request for public comment last week prompted backlash among banking trade associations and Republican regulators.
Consumer Bankers Association CEO Richard Hunt, in an article published by The Hill, argued it’s inappropriate for members of the FDIC board to conduct official business "in the dark, and without consultation from their fellow Board members."
The American Bankers Association and 51 state bankers associations sent a letter to the FDIC board, requesting the agency stop sending uncertain, harmful signals to banks.
Sen. Pat Toomey, R-PA went so far as to call the joint statement by Chopra and Gruenberg a "failed, publicity-seeking attempted coup."
Sen. Thom Tillis, R-NC, on Thursday tweeted, "The attempt by Rohit Chopra and his enablers to overthrow FDIC Director Jelena McWilliams is a direct threat to the independence of the FDIC, undoing 88 years of institutional norms."