- Federal Deposit Insurance Corp. (FDIC) Chair Jelena McWilliams will step down Feb. 4 after serving 3½ years as head of the banking regulator, she wrote Friday in a letter to President Joe Biden.
- McWilliams, a holdover from the Trump administration, has headed the bank regulator since June 2018. Her term was set to expire in 2023.
- Her resignation comes after she was involved in a contentious and partisan debate between FDIC board members Martin Gruenberg and Rohit Chopra, the director of the Consumer Financial Protection Bureau (CFPB), regarding a proposed review of bank mergers. McWilliams said the FDIC had never approved the request for comment.
The resignation of McWilliams, the only Republican member of the FDIC board, will allow the Biden administration to appoint a new head of the agency, one whose policy views more closely align with the remaining Democratic board members.
Gruenberg will become acting chair following McWilliams’ resignation, according to Politico.
In a statement Friday, McWilliams said the COVID-19 pandemic tested the resilience of the U.S. financial system, and she praised the FDIC’s "swift actions to maintain stability and provide flexibility for banks and consumers."
"The core of our financial system not only weathered the storm, but was a tangible source of strength for the American economy," she said. "The committed staff of the FDIC deserve great credit for these results, and they have my profound gratitude. I am humbled by their dedication to the FDIC’s mission and honored to have served with them."
McWilliams' resignation comes after a power struggle emerged when Democratic FDIC board members Chopra and Gruenberg published a review of bank merger policies Dec. 9 without her approval.
Chopra and Gruenberg said the FDIC board had voted to "launch a review of the agency’s Bank Merger Act policies" and begin a 60-day public comment period.
The move prompted the FDIC to issue a response that same day, slamming the joint statement by Chopra and Gruenberg as an invalid affront to a "proud 88-year history of Board members working together in a collegial manner."
During an FDIC board meeting the next week, McWilliams struck down a request by Chopra to include in the FDIC’s official minutes a request for information and results of a vote on bank merger policy.
In an opinion piece published Dec. 15 by The Wall Street Journal, McWilliams called the actions by the Democratic board members a "hostile takeover."
"This episode is an attempt to wrest control from an independent agency’s chairman with a change in the administration," McWilliams wrote. "More than that, it’s an example of the erosion of America’s democracy."
In a statement Friday, American Bankers Association President and CEO Rob Nichols said McWilliams’ service as FDIC chair "exemplified competence, professionalism and dedication."
"[S]he has worked hard to build consensus around sound banking policies. Her efforts during the ongoing pandemic have allowed banks of all sizes to serve as a source of strength for the economy, while maintaining their commitment to safety and soundness. We appreciate her willingness to listen to all stakeholders in addressing policy issues, and particularly appreciate her strong support for initiatives to reduce the number of unbanked Americans and promote financial inclusion," he said. "We thank Chairman McWilliams for her service at the FDIC and wish her well in her next endeavors."