Trump-appointed head of FDIC quits amid clash with Democratic board members

Decision will allow Biden to name her replacement

Jelena McWilliams has resigned (AFP via Getty Images)

Jelena McWilliams, the Trump-appointed chair of the Federal Deposit Insurance Corp., submitted her resignation last week after a clash with Democrats on the FDIC’s board of directors that she referred to as a “hostile takeover” of the agency.

Ms McWilliams resigned on Friday, making no mention of the dispute in a resignation letter. But her decision comes after she penned an op-ed in The Wall Street Journal complaining that Democrats led by Rohit Chopra, head of the Consumer Financial Protection Bureau (CFPB), were taking action without her approval as board chair.

Democrats, she wrote, have “attempted to circumvent the chairman to pursue their own agenda” while pursuing a push to allow public comment on the agency’s deliberations over changing the process by which it approves or rejects proposed bank mergers. The board members took the vote without Ms McWilliams’ approval, setting up a battle as an agency spokesperson would go on to call their action illegal.

In a resignation letter obtained by Politico, the FDIC chair wrote that it “has been a tremendous honor to serve this nation, and I did not take a single day for granted”. Her resignation takes effect early next month.

Her decision will open up the position to a nominee selected by President Joe Biden, and will thereby heavily swing the balance of power on the board, which already had a Democratic majority. Ms McWilliams was originally confirmed by the Senate in 2018 after being appointed to lead the banking oversight and insurance agency by former President Donald Trump in late 2017.

Sen Pat Toomey, a Republican on the Senate Banking Committee who is himself set to retire next year rather than face reelection, condemned the move by Democrats on the board in a statement.

“President Biden should move swiftly to fill the two vacant board seats and Interim Director Gruenberg’s seat with qualified individuals who will respect the FDIC’s tradition of operating free from partisan political interference,” he added.

Many of Mr Biden’s nominees to various Senate-confirmed positions are being held up by GOP senators Ted Cruz, Marco Rubio and Josh Hawley, though negotiations in the chamber led to dozens of nominees being confirmed before lawmakers headed home for the Christmas holiday last month.