Jelena McWilliams will resign as chair of the Federal Deposit Insurance Corp. (FDIC) on Feb. 4, following a public clash with Democratic members of the board.
McWilliams, a Republican who immigrated to the United States from the portion of the former Yugoslavia that is now Serbia, was appointed to her position by former President Donald Trump in June 2018. Her term as chair was not set to expire until 2023, and her term as a board member ran until 2024.
In her resignation letter to President Joe Biden, posted Dec. 31 to the FDIC’s website, McWilliams did not mention the disagreement with her counterparts.
“When I immigrated to this country 30 years ago, I did so with a firm belief in the American system of government,” McWilliams wrote. “During my tenure at the Federal Reserve Board of Governors, the United States Senate, and the FDIC, I have developed a deep appreciation for these venerable institutions and their traditions. It has been a tremendous honor to serve this nation, and I did not take a single day for granted. Throughout my public service, I have been constantly reminded how blessed we are to live in the United States of America.”
The FDIC’s five-member board already has three Democrats among its ranks: Rohit Chopra, chair of the Consumer Financial Protection Bureau (CFPB); Michael Hsu, acting Comptroller of the Currency; and Martin Gruenberg, who served as chair of the FDIC from 2012-18 until he was replaced by McWilliams. The position of FDIC vice chairman is currently vacant. A fully seated board cannot have more than three members of one party, according to the agency’s bylaws.
Gruenberg will serve as acting chair when McWilliams steps down, a position he also held in 2005-06 and 2011-12.
In December, Chopra, Hsu, and Gruenberg voted via email to request public comment on the issue of bank mergers. Chopra on Dec. 9 posted the request on the CFPB’s website, prompting the FDIC to respond in a press release the request was not approved by the agency.
At a Dec. 14 meeting of the FDIC, Chopra requested the emailed vote by the three Democratic board members on the bank merger request for information be officially entered into the record. McWilliams refused.
Hsu wrote in a statement he supported the request for information. “I believe the views of the majority of the FDIC board members should influence the agency’s agenda and actions,” he said. “As a director on the FDIC board, I will continue to consider each issue on its merits.”
In a Dec. 15 op-ed in the Wall Street Journal, entitled “A Hostile Takeover of the FDIC,” McWilliams accused her fellow commissioners of attempting to oust her because her political views do not align with those of Biden.
“This episode is an attempt to wrest control from an independent agency’s chairman with a change in the administration. More than that, it’s an example of the erosion of America’s democracy,” she wrote. “Many government institutions are built on norms and practices that encourage parties to work together. This foundation depends on agency leaders who recognize that the long-term benefits of cooperation outweigh the short-term incentive to blow up institutions in pursuit of immediate partisan gains. Since the FDIC’s founding in 1933, all 72 board members have respected that foundation. Until now.”
McWilliams ended her resignation letter by saying the U.S. financial system not only “weathered the storm” brought on by the Covid-19 pandemic but was “a tangible source of strength for the American economy.”
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