An interesting battle is brewing between the Consumer Financial Protection Bureau and the Federal Deposit Insurance Corp. that spewed out into the public last week, indicating that the regulators might not be on the same page and is being labeled as a “remarkable breakdown in trust.”
Like many regulators, the FDIC is run by a five-person commission. While three of the five members are Democrats, including Rohit Chopra, the Director of the CFPB, the regulator is chaired by Jelena McWilliams, a Republican who was appointed by former President Trump in 2018. The three Democrats decided last Thursday to ask for public feedback about the ways in which the FDIC analyzes bank mergers, which it must approve. The next day, though, the FDIC came out and rebuked the move, saying that the board had not voted or approved the release and that it was not seeking comment or information.
“The FDIC has a proud 88-year history of Board members working together in a collegial manner,” it said in its statement. “This history has spanned many Presidential administrations, and countless philosophical differences on substantive issues among Board members over the years. Notwithstanding the actions taken today, the FDIC expects this time-honored tradition of collegiality and comity to continue.”
Sen. Pat Toomey [R-Penn.], the Ranking Member of the Senate Banking Committee, condemned the move by Chopra and his fellow Democrats, calling it a “coup” within the FDIC.
“This failed, publicity-seeking attempted coup is exactly the kind of lawless overreach that Senate Republicans warned about with Rohit Chopra,” Sen. Toomey said, in his statement. “His reckless behavior today undermines the independence and integrity of the FDIC. It represents a radical politicization of a long-respected financial regulator.”
The move by the Democrats is seen as a “shot across the bow” to attempt to remove McWilliams from her post as chair of the FDIC, according to at least one published report.
A critic of Chopra’s used the move as a means of reviving the debate to replace the Director of the CFPB with a multi-member commission, like what is in place at the FDIC, the Federal Trade Commission, and the Federal Communications Commission.
“Director Chopra is not only weaponizing the CFPB to attack U.S. industries, but he is now trying to control an entirely different regulatory agency,” said Rep. Blaine Luetkemeyer [R-Mo.], in a statement. “Perhaps Mr. Chopra mistook the word ‘director’ for ‘dictator.’ “