A leading U.S. banking regulator appointed by former President Donald Trump announced on Friday that he was resigning from his position, paving the way for the Biden administration to shape financial supervision more directly.
Jelena McWilliams, who has been chair of the Federal Deposit Insurance Corporation since June 2018, said she would leave the organization on February 4, more than a year earlier than when her term expired.
The decision came after a rift between the top management of the FDIC, which secures deposits with state lenders, and the Bureau of Financial Protection for Consumers, which serves as a consumer oversight in the United States, over the audit of bank mergers.
The situation faced McWilliams against FDIC board member Martin Gruenberg and Rohit Chopra, CFPB director, both Democrats. Gruenberg and Chopra voted as part of the Democratic majority to launch a revision of the rules related to the process of approving bank mergers, which McWilliams opposed.
McWilliams detailed conflict in an article for The Wall Street Journal earlier in December, calling the situation “unprecedented”.
“This conflict is not about merging banks. If so, the board members would be willing to work with me and the FDIC staff rather than try to hostilely take over the FDIC’s internal processes, staff and board agenda, ”she wrote. “This episode is an attempt to take control of the president of an independent agency by changing the administration.”
In her resignation letter to President Joe Biden, McWilliams said it was a “huge honor” to serve at the helm of the FDIC and stressed the robustness of the financial system through one of the worst economic contractions in history last year.
“The unexpected shock of Covid-19 has tested the resilience of our financial system since March 2020, and the FDIC has taken swift action to maintain stability and provide flexibility to banks and consumers,” she wrote. “The core of our financial system has not only weathered the storm, but has been a tangible source of strength for the US economy.”
Prior to her work at the FDIC, McWilliams served as a senior adviser on the Senate Committee on Banking, Housing and Urban Affairs, and previously served as a lawyer on the Federal Reserve’s board of directors.
With her departure, Biden has another open regulatory position to fill. The top supervisory position at the US Federal Reserve remains vacant after Randall Quarles’ term expires in October.
Former Fed Governor, who left institution in December, was appointed to that position by Trump in 2017.
Quarles has faced criticism from the progressive wing of the Democratic Party for easing some rules and regulations restricting banks after the global financial crisis.
Candidates for both the FDIC position and the vice president for the supervisory role in the Fed are expected to take a tougher stance on financial oversight issues.