When Jelena McWilliams is confirmed by the Senate to be the next chair of the board for the federal deposit insurance agency – likely next month, after the Senate returns from its spring state work period – the leadership of the five federal financial institution regulators will have all been appointed by the sitting president.
But there is more work to do, particularly in filling the number of open seats on boards at the credit union regulator, the central bank, and the federal deposit insurer.
McWilliams, nominated late last year (and approved by the Senate Banking Committee in January) to be chairman of the board for the Federal Deposit Insurance Corp. (FDIC), will be the fifth, and last, of the financial institution regulators appointed by President Donald Trump since he took office in January 2017.
The process of empaneling the chief regulators – at the National Credit Union Administration (NCUA), the Office of the Comptroller of the Currency (OCC), the Consumer Financial Protection Bureau (CFPB) and the Board of Governors of the Federal Reserve System (Federal Reserve) – began soon after Trump was sworn in and continues until McWilliams’ confirmation.
(The announced retirement Tuesday of FDIC chief of staff and chief operating officer Barbara A. Ryan – effective at the end of next month – is a likely indicator that McWilliams’ confirmation is imminent. Ryan has worked closely with current FDIC Chairman Martin J. Gruenberg – whose term as chairman expired in November – over his term as both chairman and vice chairman of the board.)
J. Mark McWatters, named acting chairman (and, in June 2017, permanent leader) of the NCUA Board in January, was the first of Trump’s appointments (no Senate confirmation is required). McWatters was already serving on the board at the time of his appointment (as vice chairman) and has been a board member since 2014. Since then, McWatters has been rumored to be a candidate to serve as director of the CFPB (although no intent to nominate, or outright nomination, has been announced by the White House). McWatters’ term on the NCUA Board runs to 2019.
The McWatters appointment was followed by selection in May of last year by the president of Keith Noreika, a Washington attorney, to lead the OCC in an acting capacity. By last fall, however, Trump nominated Joseph Otting, a former banker and business associate of Treasury Secretary Steven Mnuchin, to be Comptroller. Otting was confirmed by the Senate in November and sworn in late that month.
Before Otting could be sworn in, however, Trump appointed Mick Mulvaney, director of the Office of Management and Budget (OMB), to be CFPB director (also in late November). Trump made the appointment to fill the vacancy created with the departure of Richard Cordray, who resigned.
That appointment led to a continuing legal challenge from CFPB Deputy Director Leandra English, appointed by Cordray to that position before he resigned. English contends the law that created the CFPB – the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank) – states that the deputy director takes over in the absence of the director.
However, the Trump administration, in backing Mulvaney’s appointment, notes that the Federal Vacancies Reform Act of 1998 (FVRA) gives the president the power to appoint replacements for federal leadership vacancies.
An appeal of action brought by English against the administration will be heard by a federal court April 12.
Fourth to be appointed by the president was Jerome H. “Jay” Powell as Federal Reserve Board chairman. Nominated in November, he was confirmed for the position by the Senate in late January.
McWilliams will be the fifth, and last, to take a leadership seat.
But there is more work to be done at the regulatory agencies.
At the credit union regulator, one of the three board seats is unfilled – and the second is filled now by Board Member Rick Metsger, whose term officially ended in August of last year. He may remain in the seat until a new member is confirmed by the Senate. No nomination for either board seat has been made by the administration.
At the Federal Reserve, four board seats are now open – and only one nomination has been made by the president to fill a seat. Marvin Goodfriend, nominated late last year, was approved narrowly by the Senate Banking Committee in February on a party line vote of 13-12. No date has been announced by the Senate for consideration of his confirmation.
At the FDIC, one “internal director” seat is now open on the board (the Comptroller of the Currency and the CFPB director also have seats on the five-person board). The White House has not yet made a nomination for the seat. Gruenberg’s term on the FDIC Board ends in November.
In the meantime, the term of Vice Chairman Thomas Hoenig ends March 31; that seat will be taken by McWilliams once she is confirmed by the Senate.