Pair of Fed nominations leaves three seats in regulatory leadership yet to be resolved

No nominees to date for two seats at FDIC, one at NCUA

Forty percent of the seats to be filled for federal financial institution regulatory leadership were addressed last week when the White House announced the president’s intention to nominate two to the Federal Reserve Board – but there’s still much farther to go to fill the remaining positions.

On Jan. 16, the White House said President Donald Trump intends to nominate Judy Shelton, a former executive director of the European Bank for Reconstruction and Development, and Christopher Waller, an economist and executive vice president and director of research at the Federal Reserve Bank of St. Louis, to two open seats on the Federal Reserve Board.

Shelton, who when named in fall 2016 as a member of then-President Elect Trump’s transition team at Treasury described herself as a “self-employed economist,” would fill the remainder of a 14-year term expiring Jan. 31, 2024, if confirmed. Waller would fill the remainder of a 14-year term expiring Jan. 31, 2030.

But three seats on federal regulatory leadership boards remain to be filled, with the White House offering no indication of when that might be. Two of the seats are on the board of the Federal Deposit Insurance Corp. (FDIC), and the third is on the board of the National Credit Union Administration (NCUA).

At the FDIC, one of the seats to be filled is now held by a holdover. The term of Board Member (and former chairman and vice chairman) Martin Gruenberg officially ended more than a year ago in December 2018. However, Gruenberg has said he intends to continue to serve in the position until his successor is confirmed by the Senate. To date, the president has offered no nomination to the seat.

The second seat open on the FDIC Board is for vice chairman, which has been vacant for nearly two years (since April 2018) following the end of the term of then-Vice Chairman Thomas Hoenig. Trump has yet to signal he is ready to name anyone for that seat.

Filling the FDIC Board membership is additionally complicated by the Federal Deposit Insurance Act’s (FDIA) mandate that not more than three of the five members of the FDIC’s board of directors may be members of the same political party.

Gruenberg is a Democrat and Board Chairman Jelena McWilliams is a Republican. The pair now even out the political distribution on the appointive side of the board. Meanwhile, the two statutory members of the board – Consumer Financial Protection Bureau (CFPB) Director Kathleen Kraninger and Comptroller of the Currency Joseph Otting – occupy at least one additional Republican slot on the board (Kraninger formerly worked as a Republican Senate staffer).

The political affiliation of Otting is unclear: He has never run for elected office and, until being named comptroller, had never held an appointed government position at either the federal or state level. Appointed by Trump (and confirmed in November 2017), Otting is also a former business partner of Treasury Secretary Stephen Mnuchin (who is a Republican).

Depending on Otting’s political affiliation, the next vice chairman could end up being a Republican; in the past, the vice chairman was typically from the political party other than that of the chairman.

Finally, at the NCUA, Board Member (and former chairman) J. Mark McWatters is serving as a holdover since his term officially ended in August 2019. Although he has not indicated publicly, McWatters apparently is willing to serve until a successor is confirmed, unless he decides to leave earlier.