The Republican chairman of the Federal Deposit Insurance Corporation, who was appointed by former President Donald J. Trump, said on Friday she was cutting her term short after a clash with Democratic banking regulators.
Jelena McWilliams, who began a five-year term as president in June 2018, will resign effective February 4, she wrote in a letter to President Biden. She is also stepping down as a director of the FDIC board of directors. Ms McWilliams is the only Republican currently on the board, and her departure will add a second vacant position.
â€œThroughout my tenure, the agency has focused on its core mission of maintaining and building confidence in our banking system,â€ she wrote. â€œToday, banks continue to maintain strong capital and liquidity levels to support lending and protect against potential losses. “
Her exit came after Rohit Chopra, a member of the FDIC board and new director of the Consumer Financial Protection Bureau, complained earlier this month that Ms McWilliams had refused to acknowledge attempts by Democratic regulators to review the rules on bank mergers. Ms McWilliams called the conflict “Hostile takeover” by other board members in a Wall Street Journal essay.
Ms. McWilliams mainly adhered to Republican ideological lines during her tenure. That made her an obstacle to President Biden’s agenda to change the federal government’s stance on big issues like climate change and income inequality.
Democrats on the board of the FDIC, which is known primarily for supporting consumer deposits but oversees all banks across the country, claimed Ms McWilliams was blocking majority attempts to set policy.
The partisan struggle atop the sleeping banking regulator, seen by some experts as part of a Democrats’ effort to topple Ms McWilliams, spread to the public in early December. Mr Chopra and two other Democrats on the board – Martin J. Gruenberg, a long-time member, and Michael J. Hsu, interim controller of the currency – voted by email to seek public comment on the issue of bank mergers. A declaration on demand was not published on the FDIC website but on that of the consumer office led by Mr. Chopra. The FDIC soon released a statement saying it had not approved such a request for comment.
A week later, after a meeting on December 14, Mr Chopra said in a declaration, â€œThis approach to governance is dangerous and unhealthy. By refusing to recognize the votes of other board members, he wrote, Ms. McWilliams had “attacked the rule of law.” She retaliated the next day, accusing other board members of trying to “wrest control” from the head of an independent agency. Banking sector groups called for calm and transparency.
Pat Toomey, a Republican who sits on the Senate Banking Committee, released a statement Friday criticizing Democratic board members for ending bipartisan cooperation that has spanned the 88-year history of the FDIC.
“The recent and irresponsible efforts of Director Chopra and Acting Director Gruenberg to take over the FDIC board of directors leaves a dark mark both on the FDIC and on their own personal records,” Mr. Toomey wrote. “I am deeply disturbed to see the administration support this extremist destruction of institutional standards and this unprecedented action to undermine the independence and integrity of our financial regulators.”
The CFPB did not immediately respond to a phone message and email requesting comment.