Senator Scott, Banking Republicans Call on President Biden to Rebuke FDIC Coup Attempt
WASHINGTON – U.S. Senator Tim Scott (R-S.C.) and fellow Senate Banking Committee Republicans are calling on President Joe Biden to rebuke Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra and Federal Deposit Insurance Corporation (FDIC) Director Marty Gruenberg for their illegitimate attempt to violate the FDIC’s 88-year tradition of working independent from partisan political influence. In a letter, the senators also urged President Biden to immediately replace Director Gruenberg—whose term expired three years ago and is serving in a temporary capacity—and nominate an individual to fill the vacant Republican seat on the FDIC board.
“As a public servant who spent nearly four decades serving in the U.S. Senate, we believe you understand and hold deep respect for historical precedent, institutional norms, and courteous treatment of your colleagues—even in the face of political disagreement,” the senators wrote. “America’s independent financial regulators are respected the world over for their professionalism and integrity, and we fear the actions of Director Chopra and Director Gruenberg, if left unchecked have the potential to weaken faith in our financial institutions and markets.”
On December 9, CFPB Director Chopra and FDIC Director Gruenberg published a joint statement to the CFPB’s website claiming the FDIC approved a request for information (RFI) on bank mergers. Shortly thereafter, the FDICclarified that no such document had been approved by the FDIC and that there was no valid vote by the FDIC board.
“Director Chopra and Director Gruenberg’s statement and actions make clear that they violated FDIC procedures with the apparent goal of usurping the powers of the chairman and inhibiting her ability to carry out her official duties and responsibilities,” the senators continued. “In addition to violating the FDIC bylaws and processes, their actions upended an 88-year tradition of the FDIC board working on a collegial basis with its chairman as well as working independent from partisan political influence.”
As the senators point out, Director Gruenberg is going on nearly two decades as an FDIC board member, but is currently serving in a temporary role because his term expired three years ago. Despite the fact that his position requires Senate confirmation, he has continued to serve on the FDIC board long after the expiration of his term in order to undermine its Senate-confirmed leader.
“We urge you to nominate promptly a candidate to replace Director Gruenberg, as well as a candidate to fill the vacant Vice-Chairman position on the FDIC board. These candidates should be well-qualified, mainstream individuals who will respect the institutional norms and practices that Director Chopra and Director Gruenberg have willfully chosen to ignore.”
To read the senators’ full letter to President Biden, click here.
- On Monday, Senator Scott separately urged Director Chopra and Director Gruenberg to cease and desist their efforts to supersede Chairman McWilliams’ powers and responsibilities as the Senate-confirmed leader of the FDIC.
- In his letter, Senator Scott emphasized that Director Chopra and Director Gruenberg’s unprecedented and illegitimate actions to politicize the independent and historically apolitical practice of federal bank regulation are in direct conflict with their job as Board members to uphold the FDIC’s mission of maintaining “stability and public confidence in the nation’s financial system.”
- To read Senator Scott’s full letter to CFPB Director Chopra and FDIC Director Gruenberg, click here.